Hershey Announces Third-Quarter Results; Updates Outlook For 2017
HERSHEY, Pa., Oct. 26, 2017 (GLOBE NEWSWIRE) -- The Hershey Company (NYSE:HSY) today announced sales and earnings for the third quarter ended October 1, 2017. Consolidated net sales were $2,033.1 million compared with $2,003.5 million for the third quarter of 2016. Reported net income for the third quarter of 2017 was $273.3 million or $1.28 per share-diluted, compared with $227.4 million or $1.06 per share-diluted for the comparable period of 2016.
“Snacking continues to outpace the market in a rapidly changing environment,” said Michele Buck, President and Chief Executive Officer, The Hershey Company. “We’re executing against the right strategies and investing in the brands and channels that will continue to drive our business forward. Hershey’s solid third-quarter results were in-line with our expectations and we are on track to deliver on the goals we established earlier this year, including, core brand growth, the launch of successful innovation and progress against our multi-year productivity and cost savings initiatives. The implementation of our confectionery and snacks consumer-driven demand model continues. The investments we’re making in our power chocolate brands - Reese’s, Hershey’s, Kit Kat and Kisses - are resonating with consumers in the marketplace as evidenced by the third-quarter combined U.S. retail takeaway on these brands of about 5%. While early, our new warehouse-based snacks initiative is off to a good start with Hershey’sand Reese’s Popped Snack Mix and Chocolate Dipped Pretzels progressing as planned. Halloween seasonal sales are tracking as expected with solid programming, merchandising and promotions being executed in the marketplace.”
The Hershey Company’s board of directors approved a new $100 million stock repurchase authorization. Hershey’s solid balance sheet and strong cash flow generation gives the company continued flexibility against its cash priorities, including, returning cash to shareholders in the form of buy backs and dividends while also being able to participate in opportunistic merger and acquisition activity.
As described in the Note below, for the third quarter of 2017, these results, prepared in accordance with U.S. generally accepted accounting principles (GAAP), included items impacting comparability of $7.8 million, or $0.05 per share-diluted. Reported gross margin of 46.2% represented an increase of 370 basis points versus the third quarter of 2016, while reported operating profit of $439.0 million in the third quarter of 2017 resulted in operating margin of 21.6%. For the third quarter of 2016, items impacting comparability totaled $72.4 million, or $0.23 per share-diluted. As described in the Note, adjusted net income, which excludes these items, was $283.6 million, or $1.33 per share-diluted, for the third quarter of 2017, compared with $277.3 million, or $1.29 per share-diluted, for the same period of 2016.