HERSHEY, PA. — Many packaged goods companies benefited in March as consumers nationwide began stocking pantries in preparation for stay-at-home measures to slow the spread of COVID-19. The Hershey Co. tracked double-digit lifts across grocery and snack items, including chocolate syrup, baking chips, cocoa and popcorn.

The company’s confectionery business, however, has struggled as shoppers limit visits to convenience and drug stores, said Michele G. Buck, president and chief executive officer.

“While we still have an opportunity to capture impulse purchases at checkout in other classes of trade, the significant changes we've seen in overall trips and basket size, over the past several weeks, has limited the amount of flowback we've seen to other classes of trade,” Ms. Buck said during an April 23 earnings call. “In addition, the gum and mint category has been significantly impacted by social distancing. These categories are much more functional than emotional, and they've experienced declines of 40% to 50% over the past several weeks.”

Net income attributable to The Hershey Co. in the first quarter ended March 29 was $271.14 million, equal to $1.33 per share on the common stock, down 11% from $304.36 million, or $1.49 per share, in the year-ago period. Items affecting comparability in the quarter included derivative mark-t0-market losses, business realignment activities, acquisition-related costs and long-lived asset impairment charges. Excluding these factors, adjusted earnings per diluted share increased 2.5%, according to the company.

Net sales increased 1% to $2.04 billion from $2.02 billion.

North America net sales rose 2.1% to $1.84 billion, while International and Other sales tumbled 8.1% to $192.5 million.

“Pre-COVID-19, our business was tracking in line with expectations, with retail takeaway up a little over 2% and confectionery share gains of about 20 basis points,” Ms. Buck said. “Similar to many other food manufacturers, we saw a benefit from consumer stock-up in March, though to a lesser degree than meal-oriented categories. This was consistent with our expectations and what we typically see with weather-related pantry loading.

“Total Hershey retail sales growth accelerated to 10% in March. This growth was across all classes of trade, with particular strength in food, mass and dollar channels… We delivered a solid Easter season, despite the significant disruptions we saw in both the retail environment and in consumers' lives.”

The situation has “evolved rapidly” in April, as a result of more regions enacting shelter-in-place guidelines and retailers reducing store hours and limiting shoppers.

“A significant number of American households are not working and experiencing meaningful financial pressures,” Ms. Buck said. “All of this has impacted traffic into stores, length of time in stores and the amount of discretionary goods people are purchasing. While many consumers have shared how our categories are helping them cope during this time and bond with their families, they've also shared how their shopping priorities have changed.”

Meanwhile, Hershey’s online sales have accelerated meaningfully, she said.

“As many of you would expect and have likely observed yourselves, the number of consumers purchasing groceries online has increased significantly over the past several weeks,” Ms. Buck said. “Our research indicates that 45% of consumers have used one or more online grocery options in the past four weeks, 23% of which used these services for the first time. We've seen similar trends for confection, with household penetration also doubling over the past months.

“Consistent with these broader trends, our overall e-commerce growth rate has accelerated significantly, with growth over 120% in March versus 60% in January and February. We are seeing growth across fulfillment models and across occasions, including in our candy dish offerings, seasonal items and our single-serve items.”

All of Hershey’s manufacturing plants remain open, and disruptions to the supply chain have been minimal, Ms. Buck said.

“As the situation began to unfold, we built inventory in both raw materials and finished goods to mitigate risk and to help us to continue meeting demand,” she said. “This proactive approach, coupled with our experienced and dedicated team, has enabled us to consistently deliver strong customer service levels.”

Hershey has closed its retail stores in Pennsylvania, New York and Las Vegas temporarily and anticipates several months of closings to have a small effect on the business in the coming quarter.

“In addition to our retail stores, there are several other parts of our business that are seeing an outsized impact, including our foodservice business and our travel retail business, both of which are seeing channel declines of 75% to 80%,” Ms. Buck said. “And we saw a meaningful category decline in China during a key seasonal gifting window in the first quarter. Combined, these businesses represent approximately 6% of our sales.”

Ms. Buck also noted the company is considering divesting its Krave jerky and Sharffen Berger and Dagoba premium chocolate brands.

“These are great brands that continue to resonate with consumers, but they require a different go-to-market model that we believe is better supported by other owners,” she said. “These actions will enable us to prioritize our recently acquired scale assets within salty snacks and nutrition bars.”