Hershey ups full-year sales forecast after third-quarter beat
(Reuters) – Hershey Co <HSY.N> raised its full-year revenue forecast after posting third-quarter results that beat Wall Street estimates on Thursday, driven by price increases and investments in snacking brands.
With younger consumers increasingly preferring healthier snacks to sugar-laden chocolates, Hershey has spent billions on acquiring companies with healthier offerings.
Hershey in August bought One Brands, which makes low-sugar, high-protein nutrition bars in flavours such as chocolate chip and peanut butter pie, for $397 million (£308 million).
The company has also spent about $2 billion over the past two years in acquisitions such as SkinnyPop popcorn maker Amplify Snack Brands and cheese puff maker Pirate Brands.
Hershey has also raised product prices, with the most recent change announced in July.
The company now expects sales in fiscal 2019 to rise about 2.5% from its prior growth forecast of about 2%, mainly due to the One Brands deal.
However, Hershey stuck to its adjusted profit forecast for the year of between $5.68 and $5.74 per share. Analysts had expected the company to earn $5.76.
Net income attributable to the company rose to $325.3 million, or $1.54 per share, in the third quarter ended Sept. 29 from $263.7 million, or $1.25 per share, a year earlier.
Excluding one-time items, the company earned $1.61 per share, just above analysts’ average estimate of $1.60 per share, according to IBES data from Refinitiv.
Sales rose 2.6% to $2.13 billion, narrowly beating the estimate of $2.12 billion.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli)