Hershey has posted 1.5% growth in net sales and 39% growth in net income for the second quarter.
The chocolate company, which earlier in the year revealed details of a three-year programme to grow its profit margin and streamline its operating model, expects to deliver full-year sales growth of around 1% in 2017.
For its second quarter, net sales were $1.66 billion compared with $1.64 billion for the second quarter of 2016, while net income was up from $146.0 million to $203.5 million.
Hershey president and chief executive officer Michele Buck said: “Second-quarter results were solid and we’re making progress against our strategic initiatives in a rapidly changing marketplace. I am pleased with our innovation performance and second-quarter US retail takeaway of 4%, driven by our core brands at Easter where we gained 1.6 market share points in this important season.
“Non-seasonal candy, mint and gum (CMG) category growth was impacted by retail trips that continue to be choppy and pressure total sales within the box. We plan to increase investments and leverage Hershey’s competitive advantages to strengthen and expand our CMG and snacks businesses while delivering strong gross margin expansion and operating profit growth.”
Hershey’s North America net sales were $1.48 billion in the second quarter of 2017, an increase of 2.2% versus the same period last year. Volume improvements contributed 1.7% of that overall growth. The late timing of Easter and the integration of the acquired BarkThins chocolate business also had a beneficial impact.
Second-quarter sales for Hershey’s international segments declined 3.6% to $186 million. Volume declined 2.1% and net price realization was a 1.4% headwind. This was in spite of net sales growth in Mexico, Brazil and India – and partially driven by as-expected sales decline in China due to ‘continued softness in the chocolate category’.
The international segment still recorded net income of $8.4 million, compared to a loss of $3.5 million in the second quarter of 2016.
Combined income in Latin America, India and export markets improved versus the prior year and performance in China benefited from initiatives related to the Margin for Growth programme.
© FoodBev Media Ltd 2017