Higher sales and margins contributed to a 22% increase in income at The Hershey Co. during the first quarter.
For the quarter ended March 31, the company had income of $241,906,000, equal to $1.11 per share on the common stock, which compared with $198,651,000, or 91c per share, during the same quarter of the previous year. Sales for the quarter were $1,827,426,000, up 6% from $1,732,064,000.
“Hershey’s first-quarter results, driven by solid volume growth across core brands, represent a good start to the year,” said John P. Bilbrey, president and chief executive officer. “We maintained our retail momentum in the U.S. and key international markets. Specifically, first-quarter U.S. marketplace performance was strong, driven by solid volume and unit trends across most major pack types resulting in market share gains in every channel where we compete. The broader launch of Brookside Foods Ltd. (Brookside) products in the U.S. is off to a good start, and we’re excited about the potential of the brand. Despite the Easter season being shorter versus last year, most customers had a higher percentage dollar sell through versus last year with preliminary seasonal market share results in line with expectations. We’re focused on executing against our plans and are confident that in 2013 we’ll continue to drive core brand volume growth in U.S. and international markets.”
The company expects 2013 net sales growth of 5% to 7%, including the impact of foreign currency exchange rates. Sales will be driven by corn brand volume growth, the U.S. launch of the Brookside product line, innovations such as Kit Kat Minis, Twizzlers Bits and Jolly Rancher Bites, and the expansion of the Hershey’s, Reese’s, Hershey’s Kisses, Jolly Rancher and Ice Breakers brands in international markets. Diluted earnings per share are expected to be in the range of $3.52 to $3.58.
The company also announced some changes to its executive management team. Humberto P. Alfonso, currently chief financial officer and chief administrative officer, will become president of international. David W. Tecka, who has held several executive positions, including chief accounting officer, will become senior vice-president and c.f.o. Michele G. Buck will become president of North America, a change from her current role of chief growth officer. E. Daniel Vucovich, who currently leads Hershey’s U.S. business, will be senior vice-president and chief commercial officer. D. Michael Wege will become senior vice-president and chief growth and marketing officer, a change from his current role of chief commercial officer.
