Higher prices, cost-cutting boost Hershey profit
HERSHEY, PA. — Higher prices and cost-cutting efforts helped offset higher ingredient costs and contribute to a 24% increase in income for The Hershey Co. during the first quarter.
For the quarter ended April 1, the company had income of $198,651,000, equal to 91c per share on the common stock, which compared with income of $160,115,000, or 72c per share, during the same quarter of the previous year. Sales for the quarter were $1,732,064,000, up 11% from $1,564,223,000.
“We are off to a good start to the year despite the challenging economic environment,” said John P. Bilbrey, president and chief executive officer. “As we enter the second quarter we are well-positioned to deliver on our financial objectives. Advertising, new products, merchandising and programming, and focused in-store retail execution will continue throughout the year. This will keep us on track with our projections and help mitigate declines due to price elasticity. As stated earlier, in 2012 we expect advertising to increase low double digits, on a percentage basis versus the prior year, supporting new product launches and core brands in both the U.S. and international markets.
“We’re confident of our plans and expect organic volume to be up slightly for the full year. Including estimated net sales of the Brookside Foods Ltd. acquisition, about $90 million at current exchange rates, we expect full-year net sales growth of about 7% to 9%, including the impact of foreign currency exchange rates. This is greater than our previous estimate of a 6.5% to 8.5% increase.”