Vending

Away-from-home recovery boosts Hershey’s Q2 2021 results

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July 29, 2021

The Hershey Co. reported robust financial results for the second quarter ending July 4, 2021, driven by recovery in away-from-home consumption and in the company's international markets, as well as continued strength in take-home consumption, according to an earnings release.

Sales rose 16.5% from $1.7 billion in Q2, 2020 to $1.99 billion for Q2, 2021.

Net income rose from $268.9 million in Q2, 2020 to $301.2 million in Q2, 2021.

Earnings per share rose from $1.29 to $1.45 in the comparative quarters, while non-GAAP diluted EPS rose from $1.31 to $1.47.

"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," Michele Buck, president and CEO said in the press release.

Second-quarter 2021 reported operating profit of $456.7 million increased 19.1% versus the second quarter of 2020, resulting in an operating profit margin of 23%, an increase of 50 basis points.

Adjusted operating profit of $459.5 million increased 19% versus the second quarter of 2020, resulting in an adjusted operating profit margin of 23.1%, an increase of 50 basis points. The increases in both reported and adjusted operating profit were driven by higher volumes.

Hershey's North America segment net sales were $1.8 billion 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.

Total Hershey U.S. retail takeaway, excluding Lily's, for the 12-week period ending July 18, 2021 in the expanded multi-outlet combined plus convenience store channels increased 6.5% versus the prior-year period.

Hershey's U.S. candy, mint and gum retail takeaway increased 6.5%, driven by continued strength in everyday take-home chocolate, along with recovery of certain parts of the portfolio negatively impacted by COVID-19 including instant consumables and refreshment products.

Hershey's chocolate instant consumables and refreshment products increased 5.6% and 26.7%, respectively, as mobility and convenience store trips returned to pre-pandemic levels and social distancing and mask wearing declined as more of the U.S. population became vaccinated.

The $1.99 billion in quarterly revenue beat analyst expectations by $150 million while the non-GAAP EPS of $1.47 beat expectations by 4 cents and the GAAP EPS of $1.45 beat expectations by 2 cents, according to Seeking Alpha.

Shares traded at $178.24 today against a 52-week range of $134-$182.24.

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.

Full-year reported earnings per share are now expected to be in the range of $6.59 to $6.85, an increase of 8% to 12% from $6.11 in fiscal 2020. This slight decrease versus the previously communicated range of 9% to 12% is due to incremental costs to execute and integrate the Lily's acquisition.

Full-year adjusted earnings per share are still expected to be in the $6.79 to $6.92 range, unchanged from the previously communicated 8% to 10% increase from $6.29 in fiscal 2020. Increased profit from higher sales is expected to be offset primarily by incremental tax reserves incurred in the second quarter in connection with an adverse ruling in a non-U.S. tax litigation matter, as well as higher supply chain costs associated with servicing higher volume.