HERSHEY, PA. — Strength in its core brands and in emerging markets helped The Hershey Co. achieve an 11% increase in income during the quarter.
For the quarter ended Oct. 3, the company had net income of $180,169,000, equal to 81c per share on the common stock, which compared with income of $162,023,000, or 73c per share, during the same quarter of the previous year. Sales for the quarter were $1,547,115,000, up 4% from $1,484,118,000 during the same quarter of the previous year.
“Hershey maintained its momentum in the third quarter, resulting in solid overall performance,” said David J. West, president and chief executive officer. “While global economic uncertainty and challenges persist, confectionery remains one of the better-performing snack categories. In the third quarter, Hershey’s net sales increased 4.2%, driven primarily by U.S. core brand volume growth, including new products, and growth in our emerging market business, which continues to increase at rates greater than the company’s overall long-term target. As we exited the quarter, the timing of some seasonal shipments dampened third-quarter net sales by approximately one point. However, these shipments occurred in early October. Therefore, our fourth-quarter net sales will be greater than our pervious estimate, still resulting in full-year net sales growth of about 7%.”
For the nine months ended Oct. 3, the company had income of $374,286,000, or $1.68 per share, up 21% from $309,215,000, or $1.39 per share, during the same period of the previous year. Sales for the period were $4,188,200,000, up 8% from $3,891,332,000.
“As we look to 2011, we’ll continue to focus on our core brands and leverage Hershey’s scale at retail,” Mr. West said. “Advertising expense is expected to increase in 2011; however, the year-over-year percentage increase will be lower than in the previous two years. As a result, our current expectation for 2011 is for net sales growth to be within our 3% to 5% long-term target. While we anticipate higher input costs in 2011, productivity and savings initiatives are in place to help mitigate the impact. Therefore, we expect 2011 growth in adjusted earnings per share-diluted to be in the 6% to 8% range, consistent with our current long-term target.”