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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.
Hershey
Hershey
Hershey Revenue by Segment
Hershey Revenue by Geographic Location
Revenue by Segment
North America Revenue
CapyFin.comInternational Revenue
CapyFin.comRevenue by Geographic Location
North America Revenue
CapyFin.com 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.
- Unfavorable mix also contributed to lower margins versus the prior year period.
- Hershey’s CMG share declined approximately 100 basis points.
Revenue & Expenses
Visualization of income flow from segment revenue to net income