"We had a great start to the year as our increased investments in the business and strong execution delivered resilient consumer demand and drove double digit sales and earnings growth in the quarter," said Michele Buck, The Hershey Company president and chief executive.
The company saw volume growth on strong consumer demand as well as earlier shipments that were originally planned for the second quarter, said chief financial officer Steve Voskuil.
While inflation has hammered spending power, consumers have been willing to pay more for their favourite snack and chocolate brand. Packaged food makers including Hershey, Mondelez, Conagra Brands Inc and General Mills have all been steadily increasing product prices to protect profits amid rising costs.
"Pricing will drive year-over-year sales growth for the next several quarters," said Arun Sundaram, analyst at CFRA Research.
Candy and snacking products see steady demand, "largely owing to their limited vulnerability to private label or store brands," Sundaram added.
Hershey now expects full-year 2023 net sales to grow about 8%, compared to the previous forecast of 6%-8%. Hershey estimates adjusted profit per share to rise by 11%, compared with the prior forecast of 9%-11%.
The company's net revenue rose 12.1% to $2.99 billion (€2.71 billion) in the first quarter, while analysts on average expected $2.91 billion (€2.64 billion), according to Refinitiv data.
"As we look to the balance of the year, we remain confident in our ability to deliver our financial goals and continue executing against our key commercial, supply chain and operational strategies to sustain our momentum into 2024 and beyond," Buck added.