On October 26, 2023, The Hershey Co (HSY, Financial) announced its financial results for the third quarter ended October 1, 2023. The company reported consolidated net sales of $3,030.0 million, an increase of 11.1% from the same period last year. Organic, constant currency net sales increased by 10.7%. The reported net income was $518.6 million, or $2.52 per share-diluted, an increase of 29.9% from the previous year. Adjusted earnings per share-diluted were $2.60, an increase of 19.8%.
Financial Performance
The Hershey Co (HSY, Financial) reported strong financial results for the third quarter of 2023. The company's consolidated net sales increased by 11.1% to $3,030.0 million. Organic, constant currency net sales increased by 10.7%, primarily driven by price realization. Volumes increased slightly, driven by planned inventory increases within the North America Salty Snacks segment ahead of the company's early October ERP system implementation.
Income Statement Highlights
The reported gross margin was 44.9% in the third quarter of 2023, compared to 40.6% in the third quarter of 2022, an increase of 430 basis points driven by price realization. Adjusted gross margin was 44.9% in the third quarter of 2023, an increase of 240 basis points compared to the third quarter of 2022. Price realization and productivity more than offset higher manufacturing, commodity and overhead costs.
Balance Sheet and Cash Flow Statement Highlights
The company expects capital expenditures of approximately $800 million to $850 million, driven by core confection capacity expansion and continued investments in digital infrastructure including the build and upgrade of a new ERP system across the enterprise.
Company's Outlook
The Hershey Co (HSY, Financial) is reiterating its net sales growth, reported earnings per share, and adjusted earnings per share outlook for the year. The company also expects an overall tax outlook that is relatively unchanged but reflects a higher investment in tax credits and a lower tax rate versus the previous outlook.
CEO's Commentary
“We remain on track to deliver our full-year sales and earnings commitments after delivering strong third-quarter seasonal sell-in and successfully implementing our new Salty Snacks ERP system in October,” said Michele Buck, The Hershey Company President and Chief Executive Officer. “As we exit the year, our retail teams are building impactful displays to engage consumers and drive demand while we increase brand investment and partner with retailers to launch exciting innovation to get 2024 off to a fast start.”
Explore the complete 8-K earnings release (here) from The Hershey Co for further details.
