Hershey increases full-year sales target

Hershey has raised its full-year sales target based on a solid Halloween performance and reported third-quarter sales and earnings that meet analysts’ estimates.

“Hershey’s third quarter financial and marketplace results were solid as our core brands continue to perform well in all retail channels. Results were slightly better than our expectations as both US chocolate and non-chocolate candy categories continue to grow greater than the historical average despite macroeconomic challenges,” says Hershey’s chief executive John Bilbrey.

Seasonal volume gains, driven by Halloween, were better than the company’s initial expectations. Bilbrey adds, “New products, primarily Reese’s Minis and Hershey’s Drops, continue to perform well in the marketplace. Offsetting these gains were volume declines, in line with our modeling, due to price elasticity, resulting in an overall volume decline in the third quarter of about 1 point. Foreign currency exchange rates added about 0.6 points.”

The company stood by its full-year profit growth goal, but raised its sales target. It now expects 2011 sales to increase about 7 percent, instead of 6 percent. Net income was $196.7 million, or 86 cents per share, in Hershey’s third quarter, up from $180.2 million, or 78 cents per share, a year earlier.

The company stood by its full-year earnings target, which calls for growth of about 10 percent. “Halloween got off to a solid start and we now anticipate higher seasonal sales for the full year,” Bilbrey concludes.