Hershey Co lifted its annual adjusted profit and sales growth forecasts after beating quarterly revenue estimates, as the Kit Kat maker benefits from price hikes amid resilient demand for its chocolates and candies.
Packaged food makers including Hershey, Kraft Heinz and Campbell Soup Co have been steadily raising prices over the past year to combat inflationary pressures and supply chain costs, aggravated by the Russia-Ukraine crisis.
The company said higher pricing boosted its quarterly net sales growth by 9.5 percentage points to 19.3% from a year earlier, while volumes rose by 4.6 percentage points.
Hershey expects some consumer pushback over higher prices in the second half of the year as consumers tighten their belts with inflation running at decades-high levels.
The 128-year-old company said it now expects 2022 adjusted profit per share growth of 12% to 14%, compared with its prior forecast of a 10% to 12% rise.
It also raised its net sales to growth forecast to between 12% and 14% from its earlier outlook of 10% to 12% growth.
Net sales rose to $2.37 billion (€2.3 billion) in the quarter ended 3 July from $1.99 billion (€1.96 billion) a year earlier. Analysts had expected revenue of $2.22 billion (€2.19 billion), according to IBES data from Refinitiv.
Net income attributable to the company for the second quarter rose to $315.6 million (€311.6 million), or $1.53 per share, from $301.2 million (€297.4 million), or $1.45 per share, a year earlier.
Michele Buck, The Hershey Company president and chief executive officer, said, "These results reflect the strength and resilience of our categories, consumers' love for our brands, the investments we are making in our business, and the exceptional execution of our dedicated employees.
"We are raising our financial expectations for the year and investing more heavily in our brands, capabilities and people in the second half to continue this momentum into 2023."