Expansion beyond US and new products fuel Hershey gains
The company said sales for the period ended April 3 rose 11 per cent to $1.56bn, while net income for the first quarter of 2011 was $160bn, compared with $147bm for the same period a year ago.
Ingredients costs proved challenging with notable volatility in the cocoa and sugar markets but were met by greater efficiencies in Hershey’s supply chain coupled with greater sales volumes, and higher levels of productivity, said the US confectionery giant.
The good sales performance, continued Hershey, was aided by new product releases including Hershey's Drops and Reese's Minis as well as a “seasonal shift in volume from the fourth quarter of last year to the first quarter of this year.”
The confectioner said it is to roll out Hershey’s Air Delight, an aerated milk chocolate in both an instant consumable bar and Kisses format, in June.
CEO David West notes that Hershey was also able to grow its share of the US market - which accounts for around 80 per cent of sales - by 0.5 per cent. "This performance reflects solid market share gains within our core chocolate and sugar confectionery businesses.”
Hershey said last month that it would raise its confectionery prices by nearly 10 per cent to offset the higher prices for raw materials such as cocoa and sugar, with the maker of Reese's Kisses claiming, though, that it will not feel the benefit of the hikes until next year.
The manufacturer forecast 2011 growth to be around the top end of its target ranges of 3 to 5 per cent for net sales and 6 per cent to 8 per cent for earnings.
