Vending

Hershey reports mixed Q4 2023 results, misses analyst expectations

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February 8, 2024

The Hershey Co. reported an income decline despite a slight sale gain for Q4 2023 compared to the prior year quarter, according to an earnings report.

Highlights include:

• Net sales rose 0.2% from $2.65 billion in Q4 2022 to $2.66 billion in the quarter ending Dec. 31, 2023. Organic, constant currency net sales decreased 0.1%, as net price realization of 6.5 points was offset by decreased volume and planned inventory declines within North America salty snacks related to the Q4 ERP implementation.
• Non-GAAP net income dipped from $417.1 million to $414.7 million in the comparative quarters.
• Reported EPS on a diluted basis fell from $1.92 to $1.70.
• Non-GAAP EPS on a diluted basis remained steady at $2.02.
• Hershey's North America confectionery segment net sales rose 2.1% from $2.17 billion to $2.22 billion. Organic, constant currency net sales increased 2.1%, as 7.2-points of net price realization was partially offset by volume declines related to price elasticity in everyday candy.
• Hershey's North America salty snacks sales fell 24.6% from $217.9 million to $205.15 million.
• International segment sales increased 12.7% from $205.6 million to $231.7 million. Organic, constant currency net sales increased 8.3% driven by price realization and 2.3 points of volume growth.

Shares traded today at $207.06 against a 52-week range of $178.82 to $276.88.

The company declared a $1.37 share quarterly dividend, a 14.9% increase from the prior dividend, payable on March 15 for shareholders of record Feb. 20.

The $2.66 billion in quarterly revenue fell short of analyst expectations of $2.72 billion, according to MarketWatch.

"We continue to operate in a dynamic environment, but we are encouraged by the resilience of seasonal traditions and the consumer response to innovation within our categories," Michele Buck, president and CEO, said in a press release. "While historic cocoa prices are expected to limit earnings growth this year, we believe our strong marketing plans, innovation and brand investments will drive top-line growth and meet consumers' evolving needs."

The company expects 2024 net sales growth of 2% to 3%, driven primarily by net price realization, and reported earnings per share to be relatively flat as higher cocoa and sugar costs as well as one-time expenses related to the Q2 ERP implementation and planned incremental cost savings initiatives are expected to more than offset higher sales, price realization, productivity, administrative efficiencies and a lower tax rate.