Hershey Co.'s (HSY) fourth-quarter earnings rose 6.9% as the
candy maker posted sharply lower restructuring charges, while sales
and margins both improved.
For the year, the company raised the low end of its October
earnings guidance by 3 cents and now expects $2.70 to $2.76 on net
sales growth of 3% to 5%.
"We are very pleased with our fourth quarter marketplace
performance," President and Chief Executive David J. West said.
"Our business has responded to the investments we have made, which
has enabled us to continue our marketplace momentum."
Hershey's sales improved last year, though the candy maker faces
tougher competition from larger rivals Mars Inc. and Kraft Foods
Inc. (KFT), which bought Cadbury about a year ago. One of the
company's challenges is to find ways to grow internationally. The
vast majority of its sales are in the U.S., where growth has been
slow. Like other food makers Hershey also faces pressure from
rising commodity costs and bargain-hunting consumers.
The company has been spending more on advertising, which was up
85% in the latest quarter. Hershey on Tuesday said its expects 2011
advertising to increase mid-single digits on a percentage
basis.
The maker of Kisses and Reese's Peanut Butter Cups reported a
profit of $135.5 million, or 59 cents a share, up from $126.8
million, or 55 cents a share, a year earlier. Excluding
restructuring-related charges, earnings were down at 61 cents from
63 cents.
Revenue increased 5.4% to $1.48 billion mostly owing to stronger
volume. U.S. retail sales, which account for 80% of its revenue,
were up 6.2%.
Analysts polled by Thomson Reuters most recently forecast
earnings of 61 cents on revenue of $1.48 billion.
Gross margin rose to 41.8% from 40.5% amid net supply-chain
efficiencies while input costs rose slightly.
Shares closed Tuesday at $47.14 and were inactive premarket. The
stock is up 27% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;