Q1 2024 Hershey Co Earnings Call (Pre-Recorded) Transcript
Key Points
- The Hershey Co (HSY) reported strong category growth for both Confection and Salty Snacks, outperforming broader food and snack category trends in Q1.
- Successful seasonal performance with Valentine's category growth up 6.5% and strong share gains during the Easter season, marking 4 consecutive periods of seasonal market share gains.
- Launch of innovative products like Reese's Caramel, which is the #1 innovation in the category this year, and the introduction of new Summer Seasonal Shape, Reese's Medals, in alignment with the Olympics.
- Successful ERP system implementation with SAP S/4HANA went live in Q1 across U.S., Canadian, and select international markets, enhancing end-to-end connectivity and efficiency.
- Robust advertising and marketing efforts, with a 12% increase in related spend in Q1, supporting brand strength and consumer engagement.
- Continued volatility in the cocoa market, impacting costs and requiring careful management of supply chain and pricing strategies.
- Planned declines in Mexico due to exiting the beverage business and softness in India impacting International segment performance.
- High cocoa prices expected to drive inflation in 2025, with potential impacts on financial scenarios still being evaluated.
- Gross margin pressures anticipated to continue, with full year declines expected around 200 basis points due to cocoa and sugar inflation.
- Challenges in the North America Salty Snacks segment with expected declines in SkinnyPop due to broader category weakness.
Good morning, everyone, and welcome to the pre-recorded discussion of The Hershey Company's First Quarter 2021 Earnings Results. My name is Melissa Poole, and I'm the Vice President of Investor Relations at Hershey. Joining me today are Hershey's Chairman and CEO, Michele Buck; and Hershey's Senior Vice President and CFO, Steve Voskuil.
In addition to these remarks, we will host an analyst Q&A-only session at 8:30 a.m. Eastern on the morning of May 3. A replay of this webcast and our subsequent Q&A session will be available on the Investor Relations section of our website, along with their corresponding transcripts.
During the course of today's discussion, management will make forward-looking statements that are subject to various risks and uncertainties. These statements include expectation and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on
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