Michele Buck, The Hershey Company President and Chief Ececutive Officer.
Hershey announced a 5.0% increase in consolidated net sales and a 5.0% increase in fixed currency organic net sales. In its financial performance for the second quarter of 2023, the company also updated its profit outlook for the entire year to reflect additional acquisition costs, and raised its adjusted profit outlook for the entire year.
Hershey’s North American candy division reported revenue of $657.1 million in the second quarter of 2023, an increase of 6.2% compared to the same period last year. The division’s profit margin for the quarter was 33.0%, an increase of 60 basis points. Revenue growth is driven by sales growth and interest rate expansion, which is sufficient to offset higher brand and capability investments.
The net sales of the candy business in the second quarter of 2023 were $1.9931 billion, an increase of 4.4% compared to the same period last year. Fixed currency net sales organic growth of 4.8%, as high single digit price realization is sufficient to offset the expected decrease in sales related to inventory timing and price elasticity.
During the 12 week period ending July 16, 2023, the company’s US candy, mint, and chewing gum (CMG) retail takeout in the Multi Channel Plus Convenience Store channel (MULO+C) increased by 9.6%, with growth across sub markets and trade categories. Hershey stated that its CMG share has decreased by approximately 80 basis points due to unfavorable category combinations and increased competitive innovation.
Michele Buck, President and CEO of Hershey, said, “Our category continues to perform well because global consumer demand for delicious snacks remains strong” “We achieved another quarter of strong net sales growth, Gross margin expansion and double-digit profit growth, enabling us to improve the adjusted earnings outlook for the whole year and increase dividends by 15%. New production capacity and increased brand investment will enable us to maintain this momentum in the second half of the year. We will continue to maintain this momentum, because we provide consumers with more seasonal celebration snacks they love, and expand the cross segment and market Distribution. ”
The net sales of Hershey International in the second quarter of 2023 increased by 8.5% compared to the same period last year, reaching $224.8 million. The organic net sales calculated at a fixed exchange rate increased by 6.2%, and the growth in prices and sales remained balanced.
The international department reported a profit of $41.1 million in the second quarter of 2023, an increase of $10.4 million compared to the same period last year, driven by sales growth and profit margin expansion. This resulted in a segment profit margin of 18.3%, an increase of 350 basis points compared to the same period last year.
Second-Quarter 2023 Financial Results Summary
- Consolidated net sales of $2490.3 million, an increase of 5.0%.
- Organic, constant currency net sales increased 5.0%.
- Reported net income of $407.0 million, or $1.98 per share-diluted, an increase of 29.4%.
- Adjusted earnings per share-diluted of $2.01, an increase of 11.7%.
Post time: Aug-01-2023
