Hershey sees ‘robust recovery’ in sales and earnings outlook
In a media statement relating to the company’s Second-Quarter 2021 Financial Results, the company said it expected 2021 net sales to rise between 6% and 8%, compared with a prior forecast of 4% to 6% growth. Analysts on average expected annual sales to be up 5.9%, according to Reuters.
Net sales and earnings for the second quarter ended July 4, 2021, and Hershey has updated its full-year financial outlook, maintaining its annual profit outlook of $6.79 to $6.92 per share, compared with analysts’ expectations of $6.89 per share.
"Our business continued to excel in the second quarter with robust recovery in away-from-home consumption and international markets and sustained elevated at-home consumption," said Michele Buck, The Hershey Company President and Chief Executive Officer.
"This strong consumer demand, coupled with our executional excellence, healthy balance sheet and relentless focus on delivering against our strategic initiatives in the quarter enabled us to support and expand our portfolio, invest in our people and deliver strong shareholder returns. As trends continue to fluctuate, we are confident in our ability to adapt with our consumers and retailers and continue meeting their needs in the future."
Hershey Second-Quarter 2021 Financial Results Summary:
• Consolidated net sales of $1,989.4 million, an increase of 16.5%.
• Organic, constant currency net sales increased 15.5%.
• Foreign currency exchange was a 1.0 point benefit to net sales.
• Reported net income of $301.2 million, or $1.45 per share-diluted, an increase of 12.4%.
• Adjusted earnings per share-diluted of $1.47, an increase of 12.2%.
The company is updating its 2021 net sales and earnings outlook to reflect the strength of its performance in the second quarter and the acquisition of Lily's Sweets.
• Full-year net sales growth is now expected to be in the range of 6% to 8%, an increase from the previously communicated range of 4% to 6%. This increase is driven by stronger than anticipated recovery in the company's away-from-home business and international markets, as well as the acquisition of Lily's.
North America (US and Canada)
Hershey's North America segment net sales were $1,779.2 million in the second quarter of 2021, an increase of 12.3% versus the same period last year. Volume gains contributed 11.8 points to net sales growth driven by strong recovery in the away-from-home consumption as well as continued elevated at-home consumption. Foreign currency exchange was a 0.7-point benefit. Net price realisation and divestitures were each a 0.1 point headwind.
International and Other
Second-quarter 2021 net sales for Hershey's International and Other segment increased 70.2% versus the same period last year to $210.2 million. Excluding a 5.7 point benefit from foreign currency exchange rates, constant currency net sales increased 64.5%. Volume and price realisation were a 49.5 point and 15.0 point benefit, respectively.
The International and Other segment reported a $42.2 million profit in the second quarter of 2021, reflecting an increase of $46.1 million versus the prior year period. Profit increases were driven by volume gains, net price realization and continued prudent cost management.
At approximately 7 am (Eastern time) Thursday (29), Hershey will post a pre-recorded management discussion of its second-quarter 2021 results and business update to its website at www.thehersheycompany.com/investors. In addition, at 8:30am (Eastern time) today, the company will host a live question and answer session with investors and financial analysts. Details to access this call are available on the company's website.