HERSHEY, Pa.--(BUSINESS WIRE)-- The Hershey Company today announced sales and earnings for the fourth quarter ended December 31, 2015. Consolidated net sales were $1,909.2 million compared with $2,010.0 million for the fourth quarter of 2014. Reported net income for the fourth quarter of 2015 was $213.4 million or $0.98 per share-diluted, compared with $202.5 million or $0.91 per share-diluted for the comparable period of 2014. For the full year ended December 31, 2015, consolidated net sales were $7,386.6 million compared with $7,421.8 million in 2014. Reported net income for 2015 was $513.0 million or $2.32 per share-diluted, compared with $846.9 million or $3.77 per share-diluted in 2014.
In 2016, the company estimates full-year reported net sales will increase around 2.0%, including unfavorable foreign currency exchange of about 1 percentage point. Excluding unfavorable foreign currency exchange rates, full-year constant currency net sales growth is expected to be around 3.0%. North America net sales are expected to be driven by confectionery and snacks growth, including Krave meat snacks distribution gains. The company has many exciting new products that will bring variety, news and excitement to our core brands as well as the confectionery and snack categories, including Reese’s Snack Mix andHershey’s Snack Bites canisters, Cadbury Chocolates in a stand-up pouch targeting the mass premium market, the introduction of Allan Candy sugar confectionery peg bag items and some other yet to be announced new candy and snacking products. The company expects gross margin to be about the same as last year. The business productivity initiative announced in June is on track and the company is also focused on non-essential SM&A spending as it continues to leverage existing resources. Additionally, the company will continue to invest in advertising and related consumer marketing, including a greater shift to digital and mobile communication. As a result, the company expects adjusted earnings per share-diluted for 2016 to increase about 6.0%.
North America (U.S. & Canada)
Hershey’s North America net sales were $1,627.7 million in the fourth quarter of 2015, an increase of 0.2% versus the same period last year. Excluding the 1.0 point impact of unfavorable foreign exchange rates in Canada, North America net sales increased 1.2%. Net price realization was a 2.3 point benefit and volume was off 1.4 points. On a net basis, the Allan Candyand Krave acquisitions, as well as the Mauna Loa divestiture, were a 0.3 point benefit. Fourth quarter spreads and baking chips sales declined versus the fourth quarter of 2014 due to increased competitive activity. U.S. CMG net sales were impacted by some retailers’ focus on managing inventory levels and slightly lower seasonal sales than anticipated.
Hershey’s U.S. CMG retail takeaway for the 12 weeks ended December 26, 2015, in the expanded all outlet combined plus convenience store channels (xAOC+C-store), which accounts for approximately 90% of the company’s U.S. retail business, was up 2.5%, with market share slightly off. For the 52 weeks ended December 26, 2015, Hershey’s U.S. market share was an industry leading 31.3%.
North America segment income increased 6.2% to $512.9 million in the fourth quarter of 2015, compared to $482.9 million in the fourth quarter of 2014. Segment income growth was driven by 200 basis points of gross margin expansion, primarily due to pricing and supply chain productivity and costs savings initiatives, as well as the productivity program announced in June. Full report.
