Hershey’s net sales grew by 1.5% in the third quarter, prompting the maker of Kisses and Reece’s peanut butter cups to raise its growth forecast to 1.25%.
As well as sales of $2.03 billion – up from $2 billion in the same quarter last year – the chocolate maker saw net income grow by 20.2% to reach $273.3 million.
Hershey chief executive officer Michele Buck said: “Snacking continues to outpace the market in a rapidly changing environment. 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.”
It comes after a strong second quarter in which Hershey raised its outlook for the year to 1%, and announced that the company would ‘step up’ its investments in key brands. FoodBev reported this month that Hershey may move for Nestlé’s unwanted US confectionery unit, valued at between $2 billion and $2.5 billion.
The Pennsylvania-based company has approved a $100 million stock repurchase. It claimed that a solid balance sheet and strong cash flow generation gave it continued flexibility against its cash priorities, including returning cash to shareholders in the form of buybacks and dividends while being able to participate in ‘opportunistic merger and acquisition activity’.
“The implementation of our confectionery and snacks consumer-driven demand model continues,” Buck added. “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 US retail takeaway on these brands of about 5%.
“While early, our new warehouse-based snacks initiative is off to a good start with Hershey’s and 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.”
Since the announcement that Irene Rosenfeld would leave Mondelēz International, Buck
is part of a select club of female CEOs at global food and drink companies. PepsiCo’s Indra Nooyi and Campbell’s Denise Morrison are the only two female CEOs at any of the world’s 50 largest food and drink companies, with Hershey falling just outside that top 50.
Less than 5% of S&P 500 companies have a female chief executive, and women only make up one-fifth of all S&P 500 board members, underlining the industry’s problem in securing meaningful progress on gender equality in the boardroom.
© FoodBev Media Ltd 2018