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UPDATE 2-Hershey raises profit, sales growth forecasts on higher prices, demand

UPDATE 2-Hershey raises profit, sales growth forecasts on higher prices, demand

Reuters · 07/28/2022 06:56
UPDATE 2-Hershey raises profit, sales growth forecasts on higher prices, demand

Adds background, quarterly metrics

- Hershey Co HSY on Thursday lifted its annual adjusted profit and sales growth forecasts after beating quarterly revenue estimates, as the Kit Kat maker benefits from price hikes amid resilient demand for its chocolates and candies.

Packaged food makers including Hershey, Kraft Heinz KHC.N and Campbell Soup Co CPB have been steadily raising prices over the past year to combat inflationary pressures and supply chain costs, aggravated by the Russia-Ukraine crisis.

The company said higher pricing boosted its quarterly sales growth by 9.5 percentage points to 19.3% from a year earlier, while volumes rose by 4.6 percentage points.

Hershey expects some consumer pushback over higher prices in the second half of the year as consumers tighten their belts with inflation running at decades-high levels.

The 128-year-old company said it expects 2022 adjusted profit per share growth of 12% to 14%, compared with its prior forecast of a 10% to 12% rise.

It also raised its sales to growth forecast to between 12% and 14% from its earlier outlook of 10% to 12% growth.

Net sales rose to $2.37 billion in the quarter ended July 3 from $1.99 billion a year earlier. Analysts had expected revenue of $2.22 billion, according to IBES data from Refinitiv.

Net income attributable to the company for the second quarter rose to $315.6 million, or $1.53 per share, from $301.2 million, or $1.45 per share, a year earlier.


(Reporting by Mehr Bedi in Bengaluru;
Editing by Vinay Dwivedi)

((Mehr.Bedi@thomsonreuters.com;))