Hershey income up 72% in quarter

by Bakingbusiness Staff
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HERSHEY, PA. — Price increases and increased advertising helped drive a 72% gain in net income at The Hershey Co. during the second quarter.

For the quarter ended July 5, the company had income of $71,298,000, equal to 32c per share on the common stock, which compared with $41,467,000, or 19c per share, during the same quarter of the previous year. The company had sales of $1,171,183,000 during the quarter, up 6% from $1,105,437,000 during the same quarter of the previous year.

"Despite the challenging economic environment, we have maintained strong momentum," said David J. West, president and chief executive officer. "As we enter the third quarter, we are well-positioned to deliver on our financial objectives. Brand-building initiatives are having the desired effect and have helped to mitigate volume declines due to price elasticity. We expect consumers to see markedly higher promoted price points in the upcoming Halloween and holiday seasons, which represent approximately one-third of our U.S. revenues in the second half of the year. Additionally, in the fourth quarter we begin to lap the August 2008 every day price increase. We intend to make necessary consumer investments to ensure the category continues to perform well in the second half of the year and are closely monitoring consumer and competitor response to our pricing models. Therefore, we are planning additional increases in advertising for the full-year."

For the six months ended July 5, the company had income of $147,192,000, or 66c per share, up 41% from $104,712,000, or 47c per share, during the same period of the previous year. Sales for the quarter were $2,407,214,000, up 6% from $2,265,779,000 during the same period of the previous year.

Hershey also is expecting its net sales growth for the full-year 2009 to be in the 3% to 5% range, and the company is increasing its adjusted earnings per share growth to be slightly above the 6% to 8% range.

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