HERSHEY, Pa. - The Hershey Company (NYSE:HSY) reported a sweet start to the year with first-quarter earnings and revenue that surpassed Wall Street expectations, sending its shares up 1.95%.
The confectioner and snack maker announced adjusted earnings per share (EPS) of $3.07, beating analyst estimates by $0.31, and revenue of $3.25 billion, exceeding the consensus by $140 million.
The company's robust performance in the first quarter, which ended March 31, 2024, represents an 8.9% increase in net sales and a notable 36.5% rise in reported net income compared to the same period last year. Organic, constant currency net sales also grew by 8.6%, primarily driven by price realization, with volumes increasing by 3.4%.
President and CEO Michele Buck attributed the strong results to strategic investments in innovation, marketing, and in-store execution, which have enhanced consumer engagement and market share across segments. She also highlighted the successful operation in the new ERP system as a major milestone towards achieving agility and efficiency targets.
Despite recent market volatility, Hershey reaffirmed its full-year outlook for 2024, expecting net sales growth between 2% to 3% and approximately zero growth in both reported and adjusted EPS. This guidance aligns with the company's previous projections, suggesting steady performance in the face of a challenging economic environment.
The company's first-quarter success was further underscored by a reported gross margin increase of 520 basis points to 51.5%, reflecting the impact of price realization and derivative mark-to-market gains. However, adjusted gross margin saw a decrease of 170 basis points to 44.9%, as higher commodity costs more than offset the benefits of pricing and productivity improvements.
Buck remains committed to driving long-term growth and sustainable value creation, stating, "We are off to a strong start and remain on track to deliver our business strategies and financial commitments for the year."
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