Vending

Hershey posts sales and earnings gains for Q1 2021, surpasses expectations

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April 29, 2021

The Hershey Co.'s net sales rose 12.8% from $2.04 billion in Q1 2020 to $2.29 billion in Q1 2021, resulting in net income including noncontrolling interest rising from $268.7 million in Q1 2020 to $395.8 million in Q1 2021, according to an earnings report.

Basic net income per share rose from $1.33 in Q1 2020 to $1.96 in Q1 2021, while diluted EPS rose from $1.29 in 2020 to $1.90 in Q1 2021.

The $2.29 billion revenue beat analyst expectations by $180 million, according to Seeking Alpha, while the non-GAAP earnings per share of $1.92 beat expectations by 12 cents and the GAAP EPS beat by 13 cents.

Shares traded at $165.24 today against a 52-week range of $123.49-$165.24.

"We are off to an outstanding start in 2021, with broad-based growth across the portfolio leading to double digit sales and earnings growth in the first quarter and an increased outlook for the full year," Michele Buck, president and CEO, said in a prepared statement. "As COVID-19 vaccines roll out across the globe, consumers are optimistic about the future and looking forward to spending more time with their family, friends and community. We expect continued investments in our brands, capabilities and people along with our agility to respond to and capitalize on marketplace opportunities to drive sustainable, advantaged performance not only in 2021, but in years to come as well."

The North America segment net sales were $2.08 billion in the first quarter of 2021, an increase of 12.8% versus the same period last year. Volume gains contributed 11.0 points to net sales growth, driven by continued momentum in the take-home chocolate portfolio, strong seasonal performance and accelerated recovery of non-measured businesses including foodservice and specialty retail.

The U.S. candy, mint and gum retail takeaway increased 7.6%, resulting in a category market share gain of nearly 80 basis points in the period. This increase was driven by strength in both the Valentine's and Easter seasons, along with continued momentum in the everyday take-home chocolate portfolio.

Sales of Hershey's salty snacks increased 10.3% in the year-to-date period. This strength was slightly offset by declines in Hershey's baking and refreshment products.

Sales of Hershey's baking items, including peanut butter, syrup, chips and cocoa, declined 4.1% year-to-date due to lapping significant stock-up growth in the year ago period, though the two-year consumption trend remains positive with growth of 10.6%.

Hershey's refreshment products decreased 4.9% in the year-to-date period, an improvement versus second half 2020 trends as mobility increased versus the prior year.

These gains were complemented by two additional order days in the quarter.

The company is updating its 2021 net sales and earnings per share outlook to reflect the strength of its performance in the first quarter and expectations for the balance of the year.

Full-year net sales growth is now expected to be in the range of 4% to 6%, an increase from the previously communicated range of 2% to 4%.

Full-year reported earnings per share are now expected to be in the range of $6.64 to $6.86, an increase of approximately 9% to 12% from $6.11 in fiscal 2020.

Full-year adjusted earnings per share are now expected to be in the range of $6.79 to $6.92, an increase of 8% to 10% from $6.29 in fiscal 2020, and an increase from the previously communicated range of 6% to 8%.

The primary drivers of the increased outlook are stronger than anticipated consumer mobility and incremental distribution and merchandising opportunities in North America confection. Volume gains, partially offset by higher input costs and incentive compensation, are expected to result in higher earnings per share growth for full-year 2021.