Dive Brief:
- Hershey reported a 2.2% increase in consolidated net sales to $2.0 billion for the third quarter, according to the company's earnings release Friday. Those sales numbers beat analysts' estimates.
- Quarterly profits also exceeded Wall Street's expectations, with Hershey reporting a 46% leap in profits to $227.4 million, or $1.06 per share.
- Hershey also raised its full-year earnings estimates, adjusted to exclude certain items, to a range of $4.28 to $4.32 a share, a four-cent increase over prior expectations.
Dive Insight:
These earnings results were a treat for the company and investors alike just before Halloween, with shares popping more than 7% during Friday's trading period. Hershey has struggled in recent months to maintain investors' confidence after Mondelez walked away from a takeover attempt of the iconic chocolate producer. Issues thwarting the deal ranged from Hershey wanting a higher deal value to Hershey's trust-based ownership structure.
Since the failed merger, Hershey has continued its efforts to diversify its primarily confections-based portfolio to include more snack-friendly foods. This includes acquisitions and investments in snack products such as Krave Jerky and the SoFit brand. Hershey has also created new "snackfection" innovations that bring its chocolate and candy products more snack-friendly ingredients, flavors and attributes.
It's crucial for Hershey to embrace the snacking trend because competition is heating up in the chocolate and confectionery space. Mondelez has been making inroads to expand into Asia, particularly China, and bring traditionally European brands to the U.S. Mars has acquired the remaining stake of Wrigley and merged the two companies' confectionery units.