The Hershey Co. (NYSE: HSY) today announced net sales, up 16.5%, and earnings for its 2021 second quarter, ended Jul. 4, and updated its full-year financial outlook.
KEY POINTS
- Consolidated net sales of $1,989.4 million, an increase of 16.5%.
- Organic, constant currency net sales increased 15.5%.
- Foreign currency exchange was a 1.0 point benefit to net sales.
- Reported net income of $301.2 million, or $1.45 per share-diluted, an increase of 12.4%.
- Adjusted earnings per share-diluted of $1.47, an increase of 12.2%.
"Our business continued to excel in the second quarter with robust recovery in away-from-home consumption and international markets and sustained elevated at-home consumption," said Hershey president and chief executive Michele Buck. "As trends continue to fluctuate, we are confident in our ability to adapt with our consumers and retailers and continue meeting their needs in the future."
Q2 SUMMARY
Hershey's consolidated net sales were $1,989.4 million in the second quarter of 2021 versus $1,707.3 million in the year ago period, an increase of 16.5%. Robust recovery in away-from-home consumption and in the company's international markets, as well as continued strength in take-home consumption, resulted in volume gains of 14.5 points. Foreign exchange and net price realization each contributed an additional 1.0 point benefit.
Reported gross margin was 46.5% in the second quarter of 2021, compared to 46.4% in the second quarter of 2020, an increase of 10 basis points. This increase was driven by higher derivative mark-to-market commodity gains. Adjusted gross margin was 46.4% in the second quarter of 2021, in line with the prior year period. Volume growth, lower COVID-19 related costs and productivity initiatives offset increased supply chain costs related to servicing elevated demand, higher labor costs and packaging inflation.
2021 OUTLOOK
Hershey is updating its 2021 net sales and earnings outlook to reflect the strength of its performance in the second quarter and the acquisition of Lily's Sweets LLC ("Lily's"). Full-year net sales growth is now expected to be in the range of 6% to 8%, an increase from the previously communicated range of 4% to 6%. This increase is driven by stronger than anticipated recovery in the company's away-from-home business and international markets, as well as the acquisition of Lily's. The net impact of acquisitions and divestitures is anticipated to be a 0.7 point benefit.
