The Hershey Company have announced their sales and earnings for the first quarter ended April 1, 2018, and refined its 2018 financial outlook:
- Consolidated net sales were $1,972.0 million, an increase of 4.9% versus the first quarter of 2017.
Acquisitions and foreign currency exchange rates were a 3.4 point and 0.5 point benefit to net sales, respectively. - Reported net income for the first quarter of 2018 was $350.2 million or $1.65 per share-diluted.
Adjusted earnings per share-diluted was $1.41, an increase of 8.5% versus the year ago period. - Full-year reported net sales are expected to increase towards the lower end of the previously communicated range of 5% to 7%, as the company implements new initiatives to reduce complexity and improve margins.
The net impact of acquisitions and divestitures is estimated to be approximately 5 points.
The impact of foreign currency exchange rates is estimated to be negligible. - Full-year reported earnings per share-diluted are expected to be in the $4.73 to $4.98 range, an increase of $0.02versus initial guidance.
- Full-year adjusted earnings per share-diluted reaffirmed in the $5.33 to $5.43 range, an increase of 14% to 16% versus 2017, including accretion from the Amplify acquisition, the benefit of U.S. tax reform, and the impact of revising the company’s adjusted earnings in connection with the adoption of a recent pension accounting change.
“First-quarter net sales and earnings per share were in line with our expectations as we continue to make progress in our key strategic focus areas,” said Michele Buck, The Hershey Company President and Chief Executive Officer. “We continue to drive growth in our core chocolate brands. The Amplify acquisition is on track and delivering accelerated earnings accretion in 2018. We are transforming the international business model, delivering another quarter of profitable growth. And despite heightened cost pressures, we continue to invest in the business and deliver strong earnings growth.”
Reported net income for the first quarter of 2018 was $350.2 million or $1.65 per share-diluted, compared to $125 million or $0.58 per share-diluted for the first quarter of 2017. As described in the Note below, for the first quarter of 2018, these results, prepared in accordance with U.S. generally accepted accounting principles (GAAP), included items impacting comparability of $51.9 million, or $0.24 per share-diluted. For the first quarter of 2017, items impacting comparability totaled $212.2 million, or $0.72 per share-diluted. As described in the Note, adjusted net income, which excludes these items, was $298.0 million, or $1.41 per share-diluted, for the first quarter of 2018, compared to $279.3 million, or $1.30 per share-diluted, for the same period of 2017. Reported gross margin of 49.4% for the first quarter of 2018 represented an increase of 100 basis points versus the first quarter of 2017, while reported operating profit of $480.5 million in the first quarter of 2018 resulted in operating margin of 24.4%. The effective tax rate in the first quarter of 2018 was 21.9%, including the impact of U.S. tax reform.
