Vending

Hershey price hikes push Q4, FY 2021 sales, earnings

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February 3, 2022

The Hershey Co. reported sales and earnings gains for Q4 and FY 2021, driven by price increases across all segments as well as slightly lower levels of promotional activity versus the prior year.

• Sales rose 6.4% from $2.18 billion in Q4 2020 to $2.33 billion in the fourth quarter ending Dec. 31, 2021, according to an earnings release.
• Sales increased 10.1% from $8.15 billion in fiscal 2020 to $8.9 billion in fiscal 2021.
• Net income rose from $291.12 million to $335.5 million in the comparative quarters and increased from $1.28 billion in fiscal 2020 to $1.48 billion in 2021.
• Diluted earnings per share rose from $1.29 to $1.62 in the comparative quarters, and from $6.11 to $7.11 for the comparative fiscal years.
• Non-GAAP diluted EPS rose from $1.49 to $1.69 in the comparative quarters and from $6.29 to $7.19 in the comparative fiscal years.
• The North America confectionery segment net sales rose 4.9% to $1.98 billion in Q4 2021, while income increased 6.3% to $623.2 million, driven by pricing gains and reductions in advertising on select brands in response to sustained consumer demand and capacity constraints, which was partially offset by gross margin declines driven by logistics, labor and packaging inflation.
• North America salty snacks sales jumped 38.9% to $158.7 million in Q4 2021, while income increased 20.2% to $19.7 million driven by net price realization and volume gains, partially offset by higher supply chain costs and increases in advertising spend.
• Fourth quarter 2021 sales for the company's international segment increased 1.7% to $185 million.

Shares traded today at $201.48 against a 52-week range of $143.58-$202.89.

The $2.33 billion in quarterly revenue beat analyst expectations by $60 million, while the non-GAAP EPS of $1.69 beat expectations by 7 cents, according to Seeking Alpha.

The company declared a $0.901 per share quarterly dividend.

"In 2021, we delivered a record year of production and double-digit sales and earnings growth, with a strong finish and momentum heading into 2022," Michele Buck, president and CEO, said in the press release. "While the environment remains volatile, we are confident in our ability to continue to respond to the changes in the world around us and deliver another year of advantaged performance in 2022."

The company expects 2022 sales growth to be driven primarily by price increases across all segments to partially offset investments in labor, along with higher logistics costs and raw material inflation.

Net sales growth for 2022 is projected from 8% to 10%.

Diluted EPS for 2022 is projected from $7.60 to $7.84 while adjusted diluted EPS is projected from $7.84 to $7.98.