Hershey raised its full-year adjusted profit forecast, bolstered by price increases for the Reese's peanut-butter cups maker's chocolates and candy.
Big names in the packaged food industry, including Kellogg, Coca-Cola and Hershey, have hiked product prices multiple times over the past year to counter a jump in costs of everything from ingredients to transportation caused by supply chain snags that were compounded by the Russia-Ukraine war.
Hershey has benefited from the price increases, boosting the chocolatier's bottom-line and margins, but it also saw a 2.7% decline in volumes.
The Pennsylvania-based company now expects full-year adjusted profit per share to rise 11% to 12%, compared with its prior forecast of about 11% growth.
Excluding items, it earned $2.01 per share for the quarter, above estimates of $1.91 per share.
Quarterly Performance
Net income attributable to the company for the quarter ended 2 July rose to $407 million (€365.5 million), or $1.98 per share, from $315.6 million (€283.5 million), or $1.53 per share, a year earlier.
Shares of the 129-year-old company rose 1% before the bell.
Net sales rose to $2.49 billion (€2.2 billion) in the second quarter from $2.37 billion (€2.1 billion) a year earlier, falling short of analyst expectations of $2.50 billion (€2.3 billion), according to Refinitiv data.
Hershey reaffirmed its previous forecast of approximately 8% net sales growth in 2023.
Michele Buck, The Hershey Company president and chief executive officer said, "Our categories continue to perform well as consumer demand for great tasting snacks remains resilient across the globe."
"New capacity and increased brand investment should enable us to sustain this momentum in the second half as we provide consumers with even more of their favourite snacks for seasonal celebrations and expand distribution across segments and markets."
Additional reporting by ESM
