The largest confectioner in the US, Hershey Foods Corp, yesterday [Thursday] reported a 10.3% increase in earnings to US$87m, or 63 cents a share, during its January-March Q1 period.
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The company revealed that the earnings increase was due to a slight increase in sales, up to US$988.5m from US$988m a year ago, reflecting the acquisition of a Brazilian chocolate company and improved sales of core brands such as Hershey’s Kisses and Reese’s peanut butter cups.
To some extent however these sales were offset by the elimination of some unprofitable product lines and package sizes, and by increased competition from other chocolate manufacturers.
Richard H. Lenny, chairman, president and CEO commented: “We’re off to a good start in 2002, as our business strategy continues to yield positive results […] “sales growth was modest, [but] we achieved solid increases in our more profitable scale brands and ‘instant consumables.”
Lenny said he stood by the company’s full-year expectations, of sales growth of 3-4% and growth in diluted earnings per share of 9-11%. In 2001, Hershey earned US$2.74 a share.
“We know we have to pick up sales in the second half,” Lenny told analysts at a conference call yesterday morning, but H2 sales are almost more significant as the period contains two large holidays, Halloween and Christmas.
