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Jul 02, 2023
Hershey Q2 2023 Earnings Report
Hershey's Q2 2023 financial results were reported with an updated 2023 earnings outlook.
Key Takeaways
Hershey reported a strong second quarter with net sales increasing by 5.0% to $2,490.3 million. Net income increased by 29.4% to $407.0 million, or $1.98 per share-diluted, and adjusted earnings per share-diluted increased by 11.7% to $2.01. The company reaffirmed its 2023 net sales outlook, updated its full-year reported earnings outlook to reflect additional acquisition costs, and raised its full-year adjusted earnings outlook.
Consolidated net sales increased by 5.0% to $2,490.3 million.
Organic, constant currency net sales increased by 5.0%.
Reported net income increased by 29.4% to $407.0 million, or $1.98 per share-diluted.
Adjusted earnings per share-diluted increased by 11.7% to $2.01.
Hershey
Hershey
Hershey Revenue by Geographic Location
Revenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
The Company is reiterating its net sales growth, reducing its reported earnings-per-share, and raising its adjusted earnings-per-share outlook for the year. The company expects net sales growth of approximately 8%, reported earnings per share growth of 13% - 15%, and adjusted earnings per share growth of 11% - 12%.
Positive Outlook
- Net sales growth of approximately 8%.
- Reported earnings per share growth of 13% - 15%.
- Adjusted earnings per share growth of 11% - 12%.
- A reported and adjusted effective tax rate of approximately 16%.
- Capital expenditures of approximately $800 million to $850 million, driven by core confection capacity expansion and continued investments in a digital infrastructure including the build and upgrade of a new ERP system across the enterprise.
Challenges Ahead
- Other expense, which primarily reflects the write-down of equity investments that qualify for a tax credit, of approximately $180 million to $190 million.
- Interest expense of approximately $155 million.
- Volumes declined, as expected, due to the lapping of inventory replenishment in the prior year period and the timing of summer promotion shipments occurring more in the first quarter of 2023.
- Hershey’s CMG share declined approximately 80 basis points due to unfavorable category mix and increased competitive innovation.
- Shipments lagged consumption due to execution driven inventory level declines and promotional shipment shifts into the third quarter.