Hershey sales decline but earnings beat Wall Street expectations

Hershey sales decline but earnings beat Wall Street expectations

Hershey's revenue in the fourth quarter continued the trends it had seen in the previous months but improved margins meant the US chocolate maker was able to beat Wall Street earnings expectations.

The company said today (28 January) fourth-quarter net earnings totalled $213.4m, or $0.98 per share, compared to $202.5m or $0.91 per share. Adjusted earnings per share totalled $1.08 versus consensus expectations of $1.05 a share. 

The group attributed improved earnings to "solid" gross margin expansion in the US in the fourth quarter. Operating earnings in the three months totalled $343m versus $343.5m in the year ago period. 

On a full-year basis, operating profit dipped to $1.03bn from $1.39bn but net earnings increased to $909.7m versus $895.9m. 

The profit growth was achieved despite declining revenue. Sales in the fourth quarter dropped 5% to $1.9bn while full-year sales declined 0.5% $7.38bn. The company repeatedly downgraded its sales forecasts throughout the year as a slowdown in North America and China weighed.

Looking to 2016, Hershey said it expects sales to rise by "around 2%", supported by new products. The group said its "long-term" sales target was for growth of 3-5%.