US confectionery manufacturer Hershey today (21 October) announced an 11% increase in net income for its third quarter and increased its forecast for the full year.
For the quarter ended 3 October, net income reached US$180.2m compared with $162m in the same quarter of 2009.
Hershey reiterated its previous full-year sales target of an increase of 7% but said it expects adjusted gross margin and adjusted EBIT margin to expand for the full year, which led to an improved adjusted earnings per share-diluted outlook.
The company has raised its full-year adjusted earnings per share-diluted outlook, expecting it to be in the $2.52 to $2.56 range, an increase of mid-to-high-teens on a percentage basis versus 2009 – and greater than its previously estimated range of $2.47 to $2.52.
Hershey’s net sales for the third quarter grew 4.2% to $1.5bn, driven by US volume growth, new products and growth in its emerging markets. EBIT reached $299.6m, up on the $279.6m reported in the same quarter of the previous year.
“As we look to 2011, we’ll continue to focus on our core brands and leverage Hershey’s scale at retail. Advertising expense is expected to increase in 2011, however, the year-over-year percentage increase will be lower than in the previous two years. As a result, our current expectation for 2011 is for net sales growth to be within our 3-5% long-term target,” said president and CEO David West.
“While we anticipate higher input costs in 2011, productivity and cost savings initiatives are in place to help mitigate the impact. Therefore, we expect 2011 growth in adjusted earnings per share-diluted to be in the 6-8% range, consistent with our current long-term target.”