HERSHEY, PA. — Consistent, solid retail takeaway across its core confectionery brands in the United States coupled with another year of incremental profitable growth in its international business benefited financial performance at the Hershey Co. in fiscal 2019.
Hershey net income for the fiscal year ended Dec. 31, 2019, totaled $1,149,692,000, equal to $5.64 per share on the common stock, down 2% from $1,177,562,000, or $5.76 per share, the year prior. Adjusted net income was $1,218,353,000, or $5.78 per share, up from $1,130,072,000, or $5.36 per share.
Net sales in the fiscal year totaled $7,986,252,000, up 2.5% from $7,791,069,000. Excluding the benefit of acquisitions, organic net sales growth in constant currency was 1.8%.
“We had a strong 2019, with accelerated business performance and differentiated financial results,” Michele G. Buck, president and chief executive officer, said during a Jan. 30 conference call with analysts. “This was driven by momentum in our core U.S. confection portfolio in both retail takeaway and margin expansion, by incremental and profitable international growth and by further expansion of our snacking portfolio. And we continue to invest in our brands, capabilities and people.”
Fourth-quarter income on a reported basis was $207,187,000, or $1.02 per share, down 39% from $336,791,000, or $1.65 per share, in the year-ago quarter. Adjusted net income for the quarter was $269,320,000, or $1.28 per share, up from $265,219,000, or $1.26 per share.
Net sales in the fourth quarter of fiscal 2019 increased to $2,068,125,000, up 4% from $1,987,902,000. On a constant currency basis, net sales excluding acquisitions increased 1.9%.
Looking ahead to fiscal 2020, Ms. Buck said Hershey has “another great year” of activations planned for its confection business. Take 5, which was relaunched last year under the Reese’s banner, is expected to get a boost from a new advertisement set to run during the 2020 Super Bowl, Ms. Buck said.
Innovation also is set to play a big role in 2020, she said.
“In addition to our Kit Kat Duos innovation, we are excited to announce the expansion of our Thins platform in 2020,” she said. “York Thins and Reese’s White Thins will launch in March and will be … available in both the take-home and peg formats. This provides York lovers a unique way to enjoy one of their favorites. And it enables us to secure strong year two merchandising for our core milk and dark Reese’s items that we launched this past year.”
Hershey also has invested in incremental capacity and planning capabilities over the past several years, a strategy that is expected to continue moving forward, Ms. Buck said.
“As a part of a multiyear capital project, we will add additional capacity for our largest and fastest growing brands, build agile fulfillment and late-stage customization capabilities and invest in new data and technology within our supply chain that increases visibility, automation and digitalization,” she said. “We believe these investments will enable us to respond to changing needs from both our consumers and customers while maintaining our advantaged margin profile.”
Capital expenditure spending is estimated to be between $475 million and $525 million for 2020, said Steven E. Voskull, chief financial officer and chief accounting officer. Mr. Voskull said additional details on Hershey’s capital spending plans will be shared during its investor day conference in March.