Hershey today (25 July) lifted its forecasts for earnings per share after what the US confectioner described as a “strong” second quarter.
The Reese’s maker booked a 17.6% increase in quarterly net income to US$159.5m for the three months to 30 June. Earnings per share-diluted was $0.70 a share, compared to a $0.59 a year ago.
Its new forecast for reported earnings per share-diluted is $3.60-3.65, compared to its guidance in April of $3.52-3.58. On an adjusted basis, which excludes costs from restructuring and from pension costs, diluted EPS is expected to increase 14%.
The company also said it now sees adjusted gross margins expanding by more than it had forecast after second-quarter sales grew more than it estimated and amid falling commodity prices.
Consolidated net sales were up 6.7% at $1.51bn, ahead of forecast. Volumes boosted sales by 6.6 points, helped by new products and growth from core brands in the US and internationally. The results included a one point gain from increased distribution from the Brookside business it acquired last year.
The sales result prompted Hershey to provide a refreshed sales forecast. In April, it predicted a 5-7% increase in sales; it now sees sales rising by “about” 7%. The company plans to launch more products in the US, as well as Mais candy in Brazil and two more Hershey’s-branded lines in China.