HERSHEY,
Pa., May 3, 2024 /PRNewswire/ -- The
Hershey Company (NYSE: HSY) today announced net sales and
earnings for the first quarter ended March
31, 2024 and reaffirmed its 2024 net sales and earnings
outlook.
"We are off to a strong start and remain on track to deliver our
business strategies and financial commitments for the year," said
Michele Buck, The Hershey Company
President and Chief Executive Officer. "Our investments in
innovation, marketing and in-store execution are driving consumer
engagement and improving market share performance across
segments. We are successfully operating in our new ERP
system, a major milestone towards achieving our previously
announced agility and efficiency targets. As we continue to
navigate recent volatility in the business, we remain committed to
strategies that drive long-term growth and sustainable value
creation."
First-Quarter 2024 Financial Results
Summary1
- Consolidated net sales of $3,252.7
million, an increase of 8.9%.
- Organic, constant currency net sales increased 8.6%.
- Reported net income of $797.5
million, or $3.89 per
share-diluted, an increase of 36.5%.
- Adjusted earnings per share-diluted of $3.07, an increase of 3.7%.
___________________________
|
1 All comparisons for the
first quarter of 2024 are with respect to the first quarter ended
April 2, 2023
|
2024 Full-Year Financial Outlook
The Company is reiterating its net sales growth, reported
earnings per share and adjusted earnings per share outlook for the
year.
2024 Full-Year Outlook
|
|
Current
Guidance
|
Net sales
growth
|
|
2% to 3%
|
Reported earnings per
share growth
|
|
~0%
|
Adjusted earnings per
share growth
|
|
~0%
|
Consistent with the previous outlook, the Company also
expects:
- A reported and adjusted effective tax rate of approximately
13%;
- Other expense, which primarily reflects the write-down of
equity investments that qualify for a tax credit, of approximately
$220 million to $230 million;
- Interest expense of approximately $165
million to $175 million,
reflecting a higher interest rate environment;
- Capital expenditures of approximately $600 million to $650
million, driven by core confection capacity expansion and
continued investments in a digital infrastructure including the
build and upgrade of a new enterprise resource planning ("ERP")
system across the enterprise; and
- Advancing Agility & Automation Initiative savings of
$100 million.
Below is a reconciliation of projected 2024 and full-year 2023
earnings per share-diluted calculated in accordance with U.S.
generally accepted accounting principles (GAAP) to non-GAAP
adjusted earnings per share-diluted:
|
2024
(Projected)
|
|
2023
|
Reported EPS –
Diluted
|
$9.00 -
$9.11
|
|
$9.06
|
Derivative
mark-to-market losses
|
—
|
|
0.29
|
Business realignment
activities
|
0.50 - 0.56
|
|
0.01
|
Acquisition and
integration-related activities
|
0.15 - 0.20
|
|
0.37
|
Tax effect of all
adjustments reflected above
|
(0.17)
|
|
(0.14)
|
Adjusted EPS –
Diluted
|
$9.59
|
|
$9.59
|
2024 projected earnings per share-diluted, as presented above,
does not include the impact of mark-to-market gains and losses on
our commodity derivative contracts that are reflected within
corporate unallocated expense in segment results until the related
inventory is sold since we are not able to forecast the impact of
the market changes.
First-Quarter 2024 Components of Net Sales
Growth
A reconciliation between reported net sales growth rates and
organic constant currency net sales growth rates, along with the
contribution from net price realization and volume, is provided
below:
|
Three Months Ended
March 31, 2024
|
|
Percentage
Change as
Reported
|
|
Impact of
Foreign
Currency
Exchange
|
|
Percentage
Change on
Constant
Currency
Basis
|
|
Organic
Price
|
|
Organic
Volume/Mix
|
North America
Confectionery
|
10.4 %
|
|
— %
|
|
10.4 %
|
|
5.9 %
|
|
4.5 %
|
|
|
|
|
|
|
|
|
|
|
North America Salty
Snacks
|
1.9 %
|
|
— %
|
|
1.9 %
|
|
1.7 %
|
|
0.2 %
|
|
|
|
|
|
|
|
|
|
|
International
|
1.8 %
|
|
3.1 %
|
|
(1.3) %
|
|
3.5 %
|
|
(4.8) %
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
8.9 %
|
|
0.3 %
|
|
8.6 %
|
|
5.2 %
|
|
3.4 %
|
The Company presents certain percentage changes in net sales on
a constant currency basis, which excludes the impact of foreign
currency exchange. To present this information for historical
periods, current period net sales for entities reporting in
currencies other than the U.S. dollar are translated into U.S.
dollars at the average monthly exchange rates in effect during the
corresponding period of the prior fiscal year, rather than at the
actual average monthly exchange rates in effect during the current
period of the current fiscal year. As a result, the foreign
currency impact is equal to the current year results in local
currencies multiplied by the change in the average foreign currency
exchange rate between the current fiscal period and the
corresponding period of the prior fiscal year.
First-Quarter 2024 Consolidated Results
Consolidated net sales increased 8.9% to $3,252.7 million in the first quarter of
2024. Organic, constant currency net sales increased 8.6%,
driven primarily by price realization. Volumes increased 3.4%,
primarily due to an increase in everyday core U.S. confection as a
result of accelerated shipments in anticipation of our ERP system
implementation, which was completed in the beginning of the second
quarter of 2024.
Reported gross margin was 51.5% in the first quarter of 2024,
compared to 46.3% in the first quarter of 2023, an increase of 520
basis points driven by price realization and derivative
mark-to-market gains. Adjusted gross margin was 44.9% in the
first quarter of 2024, a decrease of 170 basis points compared to
the first quarter of 2023, as higher commodity costs more than
offset price realization and productivity gains.
Selling, marketing and administrative expenses increased 6.3% in
the first quarter of 2024 versus the first quarter of 2023, driven
by media increases and capability and technology investments.
Advertising and related consumer marketing expenses increased 12.0%
in the first quarter of 2024 versus the same period last year, with
higher investments across segments. Selling, marketing and
administrative expenses, excluding advertising and related consumer
marketing, increased 3.3% versus the first quarter of 2023 driven
by wage and benefits inflation, as well as capability and
technology investments.
First-quarter 2024 reported operating profit was $1,058.1 million, an increase of 32.3%, resulting
in a reported operating profit margin of 32.5%, an increase of 570
basis points versus the prior year period. This increase was
driven by sales growth, price realization, productivity and
derivative mark-to-market gains which more than offset commodity
inflation, higher brand investment, business realignment activities
and acquisition and integration-related costs. Adjusted
operating profit of $861.0 million
increased 3.7% versus the first quarter of 2023 driven by sales
growth. Adjusted operating profit margin of 26.5% declined 130
basis points versus the first quarter of 2023, as price realization
and productivity were more than offset by higher commodity costs
and increased brand and capacity investments.
The reported effective tax rate in the first quarter of 2024 was
19.1%, a decrease of 360 basis points versus the first quarter of
2023. The adjusted effective tax rate was 20.4%, a decrease
of 240 basis points versus the first quarter of 2023. Both
the reported and adjusted effective tax rate decreases were driven
by an increase in renewable energy tax credits versus the year-ago
period.
The Company's first-quarter 2024 results, as prepared in
accordance with GAAP, included items negatively impacting
comparability of $197.1 million, or
$0.82 per share-diluted. For
the first quarter of 2023, items positively impacting comparability
totaled $30.7 million, or
$0.11 per share-diluted.
The following table presents a summary of items impacting
comparability in each period (see Appendix I for additional
information):
|
Pre-Tax
(millions)
|
|
Earnings Per
Share-Diluted
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2024
|
|
April 2,
2023
|
|
March 31,
2024
|
|
April 2,
2023
|
|
|
|
|
|
|
|
|
Derivative
mark-to-market (gains) losses
|
$
(218.0)
|
|
$
10.2
|
|
$
(1.06)
|
|
$
0.05
|
Business realignment
activities
|
16.7
|
|
2.3
|
|
0.08
|
|
0.01
|
Acquisition and
integration-related activities
|
4.2
|
|
18.1
|
|
0.02
|
|
0.09
|
Tax effect of all
adjustments reflected above
|
—
|
|
—
|
|
0.14
|
|
(0.04)
|
|
$
(197.1)
|
|
$
30.7
|
|
$
(0.82)
|
|
$
0.11
|
Segment performance for the first quarter of 2024 versus the
prior year period is detailed below. See the table on components of
net sales growth and the schedule of supplementary information
within this press release for additional information on segment net
sales and profit.
North America Confectionery
Hershey's North America
Confectionery segment net sales were $2,707.3 million in the first quarter of 2024, an
increase of 10.4% versus the same period last year. Growth was
driven primarily by accelerated shipments related to the Company's
April ERP implementation, which came in ahead of expectations and
is expected to reverse in the second quarter. Excluding
inventory, sales grew low single digits, in line with expectations,
as gains from price realization were offset by conversion related
volume declines.
Hershey's U.S. candy, mint and
gum (CMG) retail takeaway in the multi-outlet plus convenience
store channels (MULO+C) increased 1.1% for the 12-week period ended
April 14, 2024. This 12-week period
includes the full Easter season in both the current and year ago
periods, enabling more accurate year-over-year comparisons.
Hershey's CMG share declined 10
basis points compared to the prior year. Organic net sales growth
outpaced retail takeaway due to accelerated shipments supporting
the Company's ERP implementation in early April.
The North America Confectionery segment reported segment income
of $948.2 million in the first
quarter of 2024, an increase of 6.8% versus the prior year period,
resulting in a segment margin of 35.0% in the quarter, a decrease
of 120 basis points. Segment income gains were driven by higher
sales, while margin declines were driven by increased commodity
costs outpacing price realization and productivity.
North America Salty Snacks
Hershey's North America Salty
Snacks segment net sales were $275.1
million in the first quarter of 2024, an increase of 1.9%
versus the same period last year driven primarily by price
realization.
Hershey's U.S. salty snack
retail takeaway for the 12-week period ended March 31, 2024 in MULO+C declined 4.1% versus the
prior year period. SkinnyPop ready-to-eat popcorn
takeaway declined 11%, reflecting continued category
softness. SkinnyPop ready-to-eat share declined 63
basis points in the quarter. Dot's Homestyle Pretzels
retail sales increased 11.9% in the quarter, resulting in a 136
basis point pretzel category share gain. Net sales growth
outpaced retail takeaway by approximately 600 points driven by
strong gains in non-measured channels.
North America Salty Snacks segment income was $38.7 million in the first quarter of 2024, a
decrease of 17.3% versus the first quarter of 2023, resulting in a
segment margin of 14.1%, a decrease of 320 basis points versus the
prior year period. Declines were driven by increased supply chain
costs and higher levels of advertising.
International
First-quarter 2024 net sales for Hershey's International segment increased 1.8%
versus the same period last year to $270.3
million. Organic, constant currency net sales
decreased 1.3% as accelerated shipments related to the Company's
April ERP implementation and growth in Europe and Latin
America were offset by planned declines in Mexico related to the discontinuation of the
dairy beverage product line in 2023.
The International segment reported a $42.8 million profit in the first quarter of
2024, reflecting a decrease of $12.2
million versus the prior year period driven by higher
commodity costs and increased brand investment. This resulted in a
segment margin of 15.8%, a decrease of 490 basis points versus the
prior year period.
Unallocated Corporate Expense
Hershey's unallocated corporate
expense in the first quarter of 2024 was $168.7 million, an increase of $9.7 million, or 6.1%, versus the same period of
2023. This increase was driven by higher compensation and
benefit costs, as well as capability and technology investments,
including the upgrade of the Company's ERP system and related
amortization.
Live Webcast
At approximately 7 a.m. (Eastern
time) today, Hershey will
post a pre-recorded management discussion of its first-quarter 2024
results and business update to its website at
www.thehersheycompany.com/investors. In addition, at
8:30 a.m. (Eastern time) today, the
Company will host a live question and answer session with investors
and financial analysts. Details to access this call are
available on the Company's website.
Note: In this release, for the first quarter of
2024, Hershey references income
measures that are not in accordance with GAAP because they exclude
certain items impacting comparability, including gains and losses
associated with mark-to-market commodity derivatives, business
realignment activities and acquisition and integration-related
activities. The Company refers to these income measures as
"adjusted" or "non-GAAP" financial measures throughout this
release. These non-GAAP financial measures are used in evaluating
results of operations for internal purposes and are not intended to
replace the presentation of financial results in accordance with
GAAP. Rather, the Company believes exclusion of such items provides
additional information to investors to facilitate the comparison of
past and present operations. A reconciliation of the non-GAAP
financial measures referenced in this release to their nearest
comparable GAAP financial measures as presented in the Consolidated
Statements of Income is provided below.
Reconciliation of
Certain Non-GAAP Financial Measures
|
Consolidated
results
|
Three Months
Ended
|
In thousands except
per share data
|
March 31,
2024
|
|
April 2,
2023
|
Reported gross
profit
|
$
1,676,081
|
|
$
1,382,322
|
Derivative
mark-to-market (gains) losses
|
(218,015)
|
|
10,244
|
Business realignment
activities
|
2,612
|
|
1,050
|
Non-GAAP gross
profit
|
$
1,460,678
|
|
$
1,393,616
|
|
|
|
|
Reported operating
profit
|
$
1,058,100
|
|
$
799,924
|
Derivative
mark-to-market (gains) losses
|
(218,015)
|
|
10,244
|
Business realignment
activities
|
16,666
|
|
2,349
|
Acquisition and
integration-related activities
|
4,216
|
|
18,111
|
Non-GAAP operating
profit
|
$
860,967
|
|
$
830,628
|
|
|
|
|
Reported provision for
income taxes
|
$
188,805
|
|
$
172,071
|
Derivative
mark-to-market (gains) losses*
|
(32,991)
|
|
3,443
|
Business realignment
activities*
|
4,006
|
|
639
|
Acquisition and
integration-related activities*
|
1,013
|
|
4,341
|
Non-GAAP provision for
income taxes
|
$
160,833
|
|
$
180,494
|
|
|
|
|
Reported net
income
|
$
797,453
|
|
$
587,185
|
Derivative
mark-to-market (gains) losses
|
(185,024)
|
|
6,801
|
Business realignment
activities
|
12,660
|
|
1,710
|
Acquisition and
integration-related activities
|
3,203
|
|
13,770
|
Non-GAAP net
income
|
$
628,292
|
|
$
609,466
|
|
|
|
|
Reported EPS -
Diluted
|
$
3.89
|
|
$
2.85
|
Derivative
mark-to-market (gains) losses
|
(1.06)
|
|
0.05
|
Business realignment
activities
|
0.08
|
|
0.01
|
Acquisition and
integration-related activities
|
0.02
|
|
0.09
|
Tax effect of all
adjustments reflected above**
|
0.14
|
|
(0.04)
|
Non-GAAP EPS -
Diluted
|
$
3.07
|
|
$
2.96
|
|
* The tax effect for
each adjustment is determined by calculating the tax impact of the
adjustment on the Company's quarterly effective tax rate, unless
the nature of the item and/or the tax jurisdiction in which the
item has been recorded requires application of a specific tax rate
or tax treatment, in which case the tax effect of such item is
estimated by applying such specific tax rate or tax
treatment.
|
** Adjustments reported
above are reported on a pre-tax basis before the tax effect
described in the reconciliation above for non-GAAP provision for
income taxes.
|
In the assessment of our results, we review and discuss the
following financial metrics that are derived from the reported and
non-GAAP financial measures presented above:
|
Three Months
Ended
|
|
March 31,
2024
|
|
April 2,
2023
|
As reported gross
margin
|
51.5 %
|
|
46.3 %
|
Non-GAAP gross margin
(1)
|
44.9 %
|
|
46.6 %
|
|
|
|
|
As reported operating
profit margin
|
32.5 %
|
|
26.8 %
|
Non-GAAP operating
profit margin (2)
|
26.5 %
|
|
27.8 %
|
|
|
|
|
As reported effective
tax rate
|
19.1 %
|
|
22.7 %
|
Non-GAAP effective tax
rate (3)
|
20.4 %
|
|
22.8 %
|
|
|
(1)
|
Calculated as non-GAAP
gross profit as a percentage of net sales for each period
presented.
|
(2)
|
Calculated as non-GAAP
operating profit as a percentage of net sales for each period
presented.
|
(3)
|
Calculated as non-GAAP
provision for income taxes as a percentage of non-GAAP income
before taxes (calculated as non-GAAP operating profit minus
non-GAAP interest expense, net plus or minus non-GAAP other
(income) expense, net).
|
Appendix I
Details of the charges included in GAAP results, as summarized
in the press release (above), are as follows:
Derivative mark-to-market (gains) losses: The
mark-to-market (gains) losses on commodity derivatives are recorded
as unallocated and excluded from adjusted results until such time
as the related inventory is sold, at which time the corresponding
(gains) losses are reclassified from unallocated to segment
income. Since we often purchase commodity contracts to price
inventory requirements in future years, we make this adjustment to
facilitate the year-over-year comparison of cost of sales on a
basis that matches the derivative gains and losses with the
underlying economic exposure being hedged for the period.
Business realignment activities: We periodically undertake
restructuring and cost reduction activities as part of ongoing
efforts to enhance long-term profitability. During the first
quarter of 2024, we commenced the Advancing Agility &
Automation Initiative to improve supply chain and
manufacturing-related spend, optimize selling, general and
administrative expenses, leverage new technology and business
models to further simplify and automate processes, and generate
long-term savings. During the first quarter of 2024, business
realignment charges related primarily to third-party costs
supporting the design and implementation of the new organizational
structure. During the fourth quarter of 2020, we commenced
the International Optimization Program to streamline resources and
investments in select international markets, including the
optimization of our China
operating model to improve efficiencies and provide a more
sustainable and simplified base going forward. During the
first quarter of 2023, business realignment charges related
primarily to other third-party costs related to this program, as
well as severance and employee benefit costs. This program
was completed in 2023.
Acquisition and integration-related activities: During the
first quarter of 2024, we incurred costs related to the acquisition
of two manufacturing plants from Weaver Popcorn Manufacturing,
Inc., and the integration of the 2021 acquisitions of Dot's
Pretzels, LLC ("Dot's") and Pretzels Inc. ("Pretzels") into our
North America Salty Snacks segment. During the first quarter
of 2023, we incurred costs related to the integration of the 2021
acquisitions of Dot's and Pretzels into our North America Salty
Snacks segment.
Tax effect of all adjustments: This line item reflects the
aggregate tax effect of all pre-tax adjustments reflected in the
preceding line items of the applicable table. The tax effect
for each adjustment is determined by calculating the tax impact of
the adjustment on the Company's quarterly effective tax rate,
unless the nature of the item and/or the tax jurisdiction in which
the item has been recorded requires application of a specific tax
rate or tax treatment, in which case the tax effect of such item is
estimated by applying such specific tax rate or tax treatment.
Safe Harbor Statement
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Many of these forward-looking statements can be identified by the
use of words such as "anticipate," "assume," "believe," "continue,"
"estimate," "expect," "forecast," "future," "intend," "plan,"
"potential," "predict," "project," "strategy," "target" and similar
terms, and future or conditional tense verbs like "could," "may,"
"might," "should," "will" and "would," among others. These
statements are made based upon current expectations that are
subject to risk and uncertainty. Because actual results may differ
materially from those contained in the forward-looking statements,
you should not place undue reliance on the forward-looking
statements when deciding whether to buy, sell or hold the Company's
securities. Factors that could cause results to differ materially
include, but are not limited to: disruptions or inefficiencies in
our supply chain due to the loss or disruption of essential
manufacturing or supply elements or other factors; issues or
concerns related to the quality and safety of our products,
ingredients or packaging, human and workplace rights, and other
environmental, social or governance matters; changes in raw
material and other costs, along with the availability of adequate
supplies of raw materials and the Company's ability to successfully
hedge against volatility in raw material pricing; the Company's
ability to successfully execute business continuity plans to
address changes in consumer preferences and the broader economic
and operating environment; selling price increases, including
volume declines associated with pricing elasticity; market demand
for our new and existing products; increased marketplace
competition; failure to successfully execute and integrate
acquisitions, divestitures and joint ventures; changes in
governmental laws and regulations, including taxes; political,
economic, and/or financial market conditions, including with
respect to inflation, rising interest rates, slower growth or
recession, and other events beyond our control such as the impacts
on the business arising from the conflict between Russia and Ukraine; risks and uncertainties related to
our international operations; disruptions, failures or security
breaches of our information technology infrastructure and that of
our customers and partners (including our suppliers); our ability
to hire, engage and retain a talented global workforce, our ability
to realize expected cost savings and operating efficiencies
associated with strategic initiatives or restructuring programs;
complications with the design, implementation or usage of our new
enterprise resource planning system, including the ability to
support post-implementation efforts and maintain enhancements, new
features or modifications; and such other matters as discussed in
our Annual Report on Form 10-K for the year ended December 31,
2023 and from time to time in our other filings with the U.S.
Securities and Exchange Commission. The Company undertakes no duty
to update any forward-looking statement to conform the statement to
actual results or changes in the Company's expectations.
The Hershey
Company
|
Consolidated
Statements of Income
|
for the periods
ended March 31, 2024 and April 2, 2023
|
(unaudited) (in
thousands except percentages and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March 31,
2024
|
|
April 2,
2023
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
3,252,749
|
|
$
2,987,614
|
Cost of
sales
|
|
|
1,576,668
|
|
1,605,292
|
Gross profit
|
|
|
|
1,676,081
|
|
1,382,322
|
|
|
|
|
|
Selling, marketing and
administrative expense
|
|
617,981
|
|
581,587
|
Business realignment
costs
|
|
—
|
|
811
|
|
|
|
|
|
|
Operating
profit
|
|
1,058,100
|
|
799,924
|
Interest expense,
net
|
|
|
39,822
|
|
37,685
|
Other (income) expense,
net
|
|
|
32,020
|
|
2,983
|
|
|
|
|
|
|
Income before income
taxes
|
|
|
986,258
|
|
759,256
|
Provision for income
taxes
|
|
|
188,805
|
|
172,071
|
|
|
|
|
|
|
|
Net income
|
|
$
797,453
|
|
$
587,185
|
|
|
|
|
|
|
|
Net income per
share
|
- Basic
|
- Common
|
|
$
4.00
|
|
$
2.94
|
|
- Diluted
|
- Common
|
|
$
3.89
|
|
$
2.85
|
|
- Basic
|
- Class B
|
|
$
3.64
|
|
$
2.67
|
|
|
|
|
|
|
|
Shares
outstanding
|
- Basic
|
- Common
|
|
149,609
|
|
147,746
|
|
- Diluted
|
- Common
|
|
204,874
|
|
205,836
|
|
- Basic
|
- Class B
|
|
54,614
|
|
57,114
|
|
|
|
|
|
|
|
Key margins:
|
|
|
|
|
|
|
Gross
margin
|
|
|
51.5 %
|
|
46.3 %
|
Operating profit
margin
|
|
|
32.5 %
|
|
26.8 %
|
Net margin
|
|
|
24.5 %
|
|
19.7 %
|
The Hershey
Company
|
Supplementary
Information – Segment Results
|
for the periods
ended March 31, 2024 and April 2, 2023
|
(unaudited) (in
thousands except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2024
|
|
April 2,
2023
|
|
%
Change
|
Net sales:
|
|
|
|
|
|
|
North America
Confectionery
|
|
$
2,707,310
|
|
$
2,452,165
|
|
10.4 %
|
North America Salty
Snacks
|
|
275,106
|
|
269,985
|
|
1.9 %
|
International
|
|
270,333
|
|
265,464
|
|
1.8 %
|
Total
|
|
$
3,252,749
|
|
$
2,987,614
|
|
8.9 %
|
|
|
|
|
|
|
|
Segment
income:
|
|
|
|
|
|
|
North America
Confectionery
|
|
$
948,195
|
|
$
887,750
|
|
6.8 %
|
North America Salty
Snacks
|
|
38,705
|
|
46,792
|
|
(17.3) %
|
International
|
|
42,750
|
|
55,049
|
|
(22.2) %
|
Total segment
income
|
|
1,029,650
|
|
989,591
|
|
4.0 %
|
Unallocated corporate
expense (1)
|
|
168,683
|
|
158,962
|
|
6.1 %
|
Unallocated
mark-to-market (gains) losses on commodity
derivatives (2)
|
|
(218,015)
|
|
10,244
|
|
NM
|
Costs associated with
business realignment initiatives
|
|
16,666
|
|
2,349
|
|
NM
|
Acquisition and
integration-related activities
|
|
4,216
|
|
18,112
|
|
(76.7) %
|
Operating
profit
|
|
1,058,100
|
|
799,924
|
|
32.3 %
|
Interest expense,
net
|
|
39,822
|
|
37,685
|
|
5.7 %
|
Other (income) expense,
net
|
|
32,020
|
|
2,983
|
|
NM
|
Income before income
taxes
|
|
$
986,258
|
|
$
759,256
|
|
29.9 %
|
|
|
|
|
|
|
|
|
(1)
Includes centrally-managed (a) corporate functional costs relating
to legal, treasury, finance and human resources, (b) expenses
associated with the oversight and administration of our global
operations, including warehousing, distribution and manufacturing,
information systems and global shared services, (c) non-cash
stock-based compensation expense and (d) other gains or losses that
are not integral to segment performance.
|
(2) Net
(gains) losses on mark-to-market valuation of commodity derivative
positions recognized in unallocated derivative losses
(gains).
|
NM - not
meaningful
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2024
|
|
April 2,
2023
|
Segment income as a
percent of net sales:
|
|
|
|
|
North America Confectionery
|
|
35.0 %
|
|
36.2 %
|
North America Salty Snacks
|
|
14.1 %
|
|
17.3 %
|
International
|
|
15.8 %
|
|
20.7 %
|
The Hershey
Company
|
Consolidated Balance
Sheets
|
as of March 31,
2024 and December 31, 2023
|
(in thousands of
dollars)
|
|
|
|
|
Assets
|
March 31,
2024
|
|
December 31,
2023
|
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
520,404
|
|
$
401,902
|
Accounts receivable -
trade, net
|
1,205,724
|
|
823,617
|
Inventories
|
1,137,857
|
|
1,340,996
|
Prepaid expenses and
other
|
523,392
|
|
345,588
|
|
|
|
|
Total current
assets
|
3,387,377
|
|
2,912,103
|
|
|
|
|
Property, plant and
equipment, net
|
3,333,096
|
|
3,309,678
|
Goodwill
|
2,693,921
|
|
2,696,050
|
Other
intangibles
|
1,859,052
|
|
1,879,229
|
Other non-current
assets
|
1,071,065
|
|
1,061,427
|
Deferred income
taxes
|
45,243
|
|
44,454
|
|
|
|
|
Total assets
|
$
12,389,754
|
|
$
11,902,941
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
946,000
|
|
$
1,086,183
|
Accrued
liabilities
|
872,475
|
|
867,815
|
Accrued income
taxes
|
75,482
|
|
29,457
|
Short-term
debt
|
1,289,648
|
|
719,839
|
Current portion of
long-term debt
|
305,425
|
|
305,058
|
|
|
|
|
Total current
liabilities
|
3,489,030
|
|
3,008,352
|
|
|
|
|
Long-term
debt
|
3,790,013
|
|
3,789,132
|
Other long-term
liabilities
|
663,648
|
|
660,673
|
Deferred income
taxes
|
338,776
|
|
345,698
|
|
|
|
|
Total
liabilities
|
8,281,467
|
|
7,803,855
|
|
|
|
|
Total stockholders'
equity
|
4,108,287
|
|
4,099,086
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
12,389,754
|
|
$
11,902,941
|
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SOURCE The Hershey Company