US confectionery Hershey today (26 July) lifted its forecasts for annual sales and profits.
The company said it expects its adjusted earnings per share and net sales to rise by 6-10% in 2011.
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The new estimates compared to the earlier forecast Hershey made in February when it said adjusted EPS would be “around the top” of its long-term target of a 6-8% annual increase.
Hershey also then predicted that its 2011 net sales would rise by a level around the top end of its long-term target of 3-5% growth.
The revised forecasts came after Hershey reported an 11.6% jump in adjusted net income to US$295.3m for the first six months of 2011.
On a reported basis, Hershey’s half-year net income climbed 49.5% to $290.1m. However, last year’s first-half numbers were hit to a greater extent by costs from the company’s Project Next Century restructuring programme in the US and by an impairment charge from its Godrej Hershey venture in India.
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By GlobalDataConsolidated net sales in the first half, meanwhile, rose 9.4% to $2.89bn.
In the second quarter of the year, Hershey’s adjusted net income increased 10.2% to $129m. Reported net income, excluding the one-off items, almost tripled from $46.7m to $130.2m. Consolidated net sales climbed 7.5% to $1.32bn.
President and CEO John Bilbrey, announcing his first set of Hershey results as the company’s chief executive, said he was “pleased” with the company’s second-quarter numbers. The increase in net sales, Bilbrey said, was “somewhat greater than our initial expectations”.
He claimed that during the first of the year the US candy, mint and gum category and Hershey’s business outperformed the “historical” rate of growth in the sector of 3-4%.
“Hershey US CMG retail takeaway for the 28 weeks ended 9 July, which along with the comparable period in 2010 encompasses each year’s entire Easter season results, in channels that account for over 80 percent of our retail business, was up 8.1%,” he said.
However, Bilbrey said moves to increase prices on some products would see the category move back to the historical growth rate during the rest of 2011.
Shares in Hershey were down 1.04% at $58.32 at 09:00 ET.
Click here for the full release from Hershey and click here for coverage of the company’s conference call with analysts.
