HERSHEY, Pa. – The Hershey Company (NYSE:) reported a strong start to the year, with first-quarter earnings and revenue beating Wall Street expectations, sending its shares up 1.95%.
The confectionery and snack food maker posted adjusted earnings per share (EPS) of $3.07, beating analysts’ estimates by $0.31, on revenue of $3.25 billion, beating consensus by $140 million.
The company’s strong results in the first quarter ended March 31, 2024 represented an 8.9% increase in net sales and a notable 36.5% increase in reported net income compared to the same period last year. Organic net sales also grew 8.6% on a constant currency basis, driven primarily by price realizations, with volumes increasing 3.4%.
President and CEO Michelle Buck attributed the strong results to strategic investments in innovation, marketing and store operations that increased consumer engagement and market share across all segments. She also noted the successful operation of the new ERP system as an important milestone towards achieving the goals of flexibility and efficiency.
Despite recent market volatility, Hershey reiterated its full-year guidance for 2024, expecting net sales growth of 2% to 3% and approximately zero growth in both reported and adjusted earnings per share. This forecast is consistent with the company’s previous guidance and assumes stable performance in a challenging economic environment.
The company’s first-quarter performance was further highlighted by a reported 520 basis point increase in gross margin to 51.5%, reflecting the impact of price realizations and rising market value of derivatives. However, adjusted gross margin fell 170 basis points to 44.9% as higher commodity costs more than offset benefits from pricing and productivity improvements.
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Buck remains committed to delivering long-term growth and sustainable value creation, saying, “We are confident in our start to and continued execution of our business strategies and financial commitments for the year.”
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