USA: Hershey announces record Q1 sales, earnings
US confectionery maker The Hershey Company has announced record sales and earnings for the first quarter ended 3 April 2005.
Net sales for the first quarter were $1.126bn, compared with $1.013bn for the first quarter of 2004. Net income was $118m compared with $107m in the first quarter of 2004.
Hershey's first quarter performance was driven by strong organic sales growth, complemented by the sales contributions from two acquisitions made in the fourth quarter of 2004, it said. Organic growth of 8% resulted from the strength of new products such as Hershey's Take 5, the Hershey premium cookie line, Ice Breakers Liquid Ice, and Ice Breakers Sours, as well as several Limited Editions of Hershey's leading brands. The acquisitions, Mauna Loa and Grupo Lorena, delivered incremental growth of 3%.
The core business achieved margin enhancement in line with the Company's expectations, and as predicted, the acquisitions tempered this margin growth as they continue to be integrated into Hershey's business system.
"The company's momentum continued into the first quarter of 2005," said chairman, president, and CEO Richard H. Lenny. "Strong sales growth combined with solid cost control to deliver record profitability. Consistent with our strategy, new product innovation across both confectionery and snacks more than offset anticipated shortfalls from a shorter seasonal period. In addition, effective trade promotion spending and superior retail execution were instrumental in expanding Hershey's marketplace leadership by one full point."
"Looking to the remainder of 2005, we'll continue to bring news and innovation to the category across multiple consumer benefits," he said. "By leveraging Hershey's iconic brands and capitalizing on our value chain capabilities, we'll strengthen our confectionery leadership while gaining critical mass in relevant snack categories. As such, for the full year, we expect organic sales to be above our ongoing 3-4% expectations."
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