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Oct 03, 2021
Hershey Q3 2021 Earnings Report
Hershey's financial performance remained strong in Q3 2021, with net sales and earnings exceeding expectations, leading to an increased full-year outlook.
Key Takeaways
Hershey reported a 6.3% increase in consolidated net sales, reaching $2,359.8 million. Reported net income was $444.9 million, or $2.14 per share-diluted, matching the prior period. The company raised its full-year net sales and earnings outlook due to robust consumer demand and optimized brand investment.
Consolidated net sales increased by 6.3% to $2,359.8 million.
Organic, constant currency net sales increased by 4.4%.
Reported net income was $444.9 million, or $2.14 per share-diluted, in line with the prior period.
Adjusted earnings per share-diluted increased by 12.9% to $2.10.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The company updated its 2021 net sales and earnings outlook, expecting net sales growth in the range of 8% to 9% and adjusted earnings per share in the range of $6.98 to $7.11.
Positive Outlook
- Full-year net sales growth is now expected to be in the range of 8% to 9%.
- Full-year reported earnings per share are now expected to be in the range of $6.88 to $7.04.
- Full-year adjusted earnings per share are now expected to be in the range of $6.98 to $7.11.
- Reported and adjusted effective tax rate in the range of 15% to 16%.
- Capital expenditures of approximately $500 to $525 million.
Challenges Ahead
- Other expense, which primarily reflects the write-down of equity investments that qualify for tax credits, remains approximately $125 million for 2021.
- Gross margin decreased 140 basis points in the third quarter of 2021 driven by logistics, labor and packaging costs along with unfavorable product mix.
- Industry-wide supply chain challenges, against a backdrop of sustained demand, resulted in higher logistics, labor and packaging costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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