First quarter sales at US-based confectionery group Hershey Foods were down slightly compared to the same period of last year at $953 million (€871m), although net profits increased from $87 million to $97 million.
Excluding a one-time business realignment charge of $9.0 million pre-tax, net income for the first quarter of 2002 was $92 million. The rise came despite a $5 million increase in the company's bad debt reserve related to the bankruptcy of the Fleming retail chain in the US.
"Hershey's first quarter sales for 2003 were essentially flat on a comparable basis as a result of the buy-in associated with the price increase announced in December 2002 and continued rationalisation of the company's product line," the company said in a statement.
"Gross margin expanded as a result of improved pricing, product and channel mix, supply chain savings and lower raw ingredient and packaging costs. Selling, marketing and administrative expenses were also lower in the quarter, despite the provision for the Fleming bankruptcy."
Richard H. Lenny, chairman, president and chief executive officer of Hershey, said that the company had also managed to strengthen its market leadership as a result of new products, more effective advertising and continued growth within convenience stores. He added that growth expectations for the year as a whole were 2-3 per cent on a comparable basis for sales and 9-11 per cent for earnings.