HERSHEY,
Pa., Oct. 26, 2023 /PRNewswire/ -- The Hershey
Company (NYSE: HSY) today announced net sales and earnings for the
third quarter ended October 1, 2023, and reaffirmed its 2023
net sales and earnings outlook.
"We remain on track to deliver our full-year sales and earnings
commitments after delivering strong third-quarter seasonal sell-in
and successfully implementing our new Salty Snacks ERP system in
October," said Michele Buck, The
Hershey Company President and Chief Executive Officer. "As we
exit the year, our retail teams are building impactful displays to
engage consumers and drive demand while we increase brand
investment and partner with retailers to launch exciting innovation
to get 2024 off to a fast start."
Third-Quarter 2023 Financial Results
Summary1
- Consolidated net sales of $3,030.0
million, an increase of 11.1%.
- Organic, constant currency net sales increased 10.7%.
- Reported net income of $518.6
million, or $2.52 per
share-diluted, an increase of 29.9%.
- Adjusted earnings per share-diluted of $2.60, an increase of 19.8%.
____________________________
|
1 All
comparisons for the third quarter of 2023 are with respect to the
third quarter ended October 2, 2022
|
2023 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.
2023 Full-Year Outlook
|
|
Current
Guidance
|
Net sales
growth
|
|
~8%
|
Reported earnings per
share growth
|
|
13% - 15%
|
Adjusted earnings per
share growth
|
|
11% - 12%
|
The Company also expects:
- An overall tax outlook that is relatively unchanged but
reflects a higher investment in tax credits and a lower tax rate
versus the previous outlook:
- A reported and adjusted effective tax rate of approximately
15%;
- Other expense, which primarily reflects the write-down of
equity investments that qualify for a tax credit, of approximately
$225 million to $230 million;
- Interest expense of approximately $155
million; and
- Capital expenditures of approximately $800 million to $850
million, driven by core confection capacity expansion and
continued investments in digital infrastructure including the build
and upgrade of a new ERP system across the enterprise.
Below is a reconciliation of projected 2023 and full-year 2022
earnings per share-diluted calculated in accordance with U.S.
generally accepted accounting principles (GAAP) to non-GAAP
adjusted earnings per share-diluted:
|
2023
(Projected)
|
|
2022
|
Reported EPS –
Diluted
|
$9.03 -
$9.15
|
|
$7.96
|
Derivative
mark-to-market gains
|
—
|
|
0.38
|
Business realignment
activities
|
0.01
|
|
0.02
|
Acquisition and
integration-related activities
|
0.50 - 0.54
|
|
0.24
|
Other miscellaneous
losses
|
—
|
|
0.07
|
Tax effect of all
adjustments reflected above
|
(0.12)
|
|
(0.15)
|
Adjusted EPS –
Diluted
|
$9.46 -
$9.54
|
|
$8.52
|
2023 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.
Third-Quarter 2023 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
October 1, 2023
|
|
Percentage
Change as
Reported
|
|
Impact of
Foreign
Currency
Exchange
|
|
Percentage
Change on
Constant
Currency
Basis
|
|
Organic
Price
|
|
Organic
Volume/Mix
|
North America
Confectionery
|
9.9 %
|
|
(0.2) %
|
|
10.1 %
|
|
11.1 %
|
|
(1.0) %
|
|
|
|
|
|
|
|
|
|
|
North America Salty
Snacks
|
25.5 %
|
|
— %
|
|
25.5 %
|
|
3.3 %
|
|
22.2 %
|
|
|
|
|
|
|
|
|
|
|
International
|
4.4 %
|
|
5.6 %
|
|
(1.2) %
|
|
4.1 %
|
|
(5.3) %
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
11.1 %
|
|
0.4 %
|
|
10.7 %
|
|
9.8 %
|
|
0.9 %
|
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.
Third-Quarter 2023 Consolidated Results
Consolidated net sales increased 11.1% to $3,030.0 million in the third quarter of
2023. Organic, constant currency net sales increased 10.7%,
driven primarily by price realization. Volumes increased slightly,
driven by planned inventory increases within the North America
Salty Snacks segment ahead of our early October ERP system
implementation.
Reported gross margin was 44.9% in the third quarter of 2023,
compared to 40.6% in the third quarter of 2022, an increase of 430
basis points driven by price realization. Adjusted gross
margin was 44.9% in the third quarter of 2023, an increase of 240
basis points compared to the third quarter of 2022. Price
realization and productivity more than offset higher manufacturing,
commodity and overhead costs.
Selling, marketing and administrative expenses increased 13.1%
in the third quarter of 2023 versus the third quarter of 2022,
driven by media increases and capability investments.
Advertising and related consumer marketing expenses increased 20.0%
in the third quarter of 2023 versus the same period last year, with
higher investments across segments. Selling, marketing and
administrative expenses, excluding advertising and related consumer
marketing, increased 9.9% versus the third quarter of 2022 driven
by wage and benefits inflation, as well as capability and
technology investments.
Third-quarter 2023 reported operating profit was $735.9 million, an increase of 32.2%, resulting
in a reported operating profit margin of 24.3%, an increase of 390
basis points versus the prior year period. This increase was
driven by price realization and productivity, which more than
offset higher brand investment, acquisition-related integration
costs and inflation. Adjusted operating profit of
$753.4 million increased 22.4% versus
the third quarter of 2022, resulting in an adjusted operating
profit margin of 24.9%, an increase of 230 basis points. This
increase was driven by price realization and productivity, which
more than offset increased brand and capability investment and
supply chain inflation.
The reported effective tax rate in the third quarter of 2023 was
20.6%, an increase of 500 basis points versus the third quarter of
2022. The adjusted effective tax rate was 20.4%, an increase
of 450 basis points versus the third quarter of 2022. Both
the reported and adjusted effective tax rate increases were driven
by a decrease in renewable energy tax credits versus the year-ago
period.
The company's third-quarter 2023 results, as prepared in
accordance with GAAP, included items positively impacting
comparability of $17.5 million, or
$0.08 per share-diluted. For
the third quarter of 2022, items positively impacting comparability
totaled $58.7 million, or
$0.23 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
|
|
October 1,
2023
|
|
October 2,
2022
|
|
October 1,
2023
|
|
October 2,
2022
|
|
|
|
|
|
|
|
|
Derivative
mark-to-market losses
|
$
1.8
|
|
$
50.1
|
|
$
0.01
|
|
$
0.24
|
Business realignment
activities
|
(0.4)
|
|
0.4
|
|
—
|
|
—
|
Acquisition and
integration-related activities
|
16.1
|
|
8.2
|
|
0.08
|
|
0.04
|
Tax effect of all
adjustments reflected above
|
—
|
|
—
|
|
(0.01)
|
|
(0.05)
|
|
$
17.5
|
|
$
58.7
|
|
$
0.08
|
|
$
0.23
|
Segment performance for the third quarter of 2023 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 $2,457.6 million in the third quarter of 2023, an
increase of 9.9% versus the same period last year. Organic,
constant currency net sales increased 10.1% as double-digit price
realization more than offset volume declines related to price
elasticity.
Hershey's U.S. candy, mint and
gum (CMG) retail takeaway in the multi-outlet plus convenience
store channels (MULO+C) increased 2.5% for the 12-week period ended
October 1, 2023. Hershey's CMG share declined approximately 120
basis points due to unfavorable category mix and increased
competitive innovation. Organic net sales growth outpaced
retail takeaway due to the timing of seasonal shipments versus
sell-through and growth in non-measured channels.
The North America Confectionery segment reported segment income
of $847.5 million in the third
quarter of 2023, an increase of 19.9% versus the prior year period,
resulting in a segment margin of 34.5% in the quarter, an increase
of 290 basis points. Gains were driven by sales growth and
gross margin expansion, which more than offset higher brand and
capability investments.
North America Salty Snacks
Hershey's North America Salty
Snacks segment net sales were $345.2
million in the third quarter of 2023, an increase of 25.5%
versus the same period last year driven by volume and price
realization. Volume increased 22.2%, reflecting an approximate
16-point benefit from planned inventory increases related to
our ERP implementation in October. Excluding this
inventory impact, the base business grew approximately mid-single
digits, with growth balanced across volume and price.
Hershey's U.S. salty snack
retail takeaway for the 12-week period ended October 1, 2023 in MULO+C was flat.
SkinnyPop ready-to-eat popcorn takeaway declined 3.9%,
reflecting a slowdown in consumption trends in the popcorn category
and increased competitive merchandising, resulting in a segment
share decline of 80 basis points. Dot's Homestyle
Pretzels retail sales increased 17.6%, resulting in a 160-basis
point pretzel category share gain.
North America Salty Snacks segment income was $57.4 million in the third quarter of 2023, an
increase of 29.0% versus the third quarter of 2022, resulting in a
segment margin of 16.6%, an increase of 40 basis points versus the
prior year period. Volume leverage, price realization and
productivity offset higher brand and capability investments and
increased supply chain costs. Supply chain costs included
approximately $10 million of expenses
incurred related to the removal of certain Paqui branded
items from retail shelves and warehouses in the quarter.
International
Third-quarter 2023 net sales for Hershey's International segment increased 4.4%
versus the same period last year to $227.2
million. Organic, constant currency net sales
decreased 1.2% as mid-single-digit pricing was more than offset by
lower volume. This volume deceleration partly reflects planned
items, such as the discontinuation of a dairy beverage product line
in Mexico and a later holiday
season in India, in addition to
increased competitive activity and a moderation of growth rates in
our categories globally.
The International segment reported a $31.7 million profit in the third quarter of
2023, reflecting a decrease of $3.7
million versus the prior year period as sales growth and
margin expansion were more than offset by higher brand and
capability investments. This resulted in a segment margin of
13.9%, a decrease of 230 basis points versus the prior year
period.
Unallocated Corporate Expense
Hershey's unallocated corporate
expense in the third quarter of 2023 was $183.1 million, an increase of $11.8 million, or 6.8%, versus the same period of
2022. 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 third-quarter 2023
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 third quarter of
2023, 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
|
October 1,
2023
|
|
October 2,
2022
|
Reported gross
profit
|
$
1,360,253
|
|
$
1,108,500
|
Derivative
mark-to-market (gains) losses
|
1,752
|
|
50,065
|
Business realignment
activities
|
(506)
|
|
(1)
|
Acquisition and
integration-related activities
|
15
|
|
65
|
Non-GAAP gross
profit
|
$
1,361,514
|
|
$
1,158,629
|
|
|
|
|
Reported operating
profit
|
$
735,949
|
|
$
556,620
|
Derivative
mark-to-market (gains) losses
|
1,752
|
|
50,065
|
Business realignment
activities
|
(426)
|
|
393
|
Acquisition and
integration-related activities
|
16,125
|
|
8,215
|
Non-GAAP operating
profit
|
$
753,400
|
|
$
615,293
|
|
|
|
|
Reported provision for
income taxes
|
$
134,836
|
|
$
73,598
|
Derivative
mark-to-market (gains) losses*
|
(1,853)
|
|
9,045
|
Business realignment
activities*
|
(133)
|
|
80
|
Acquisition and
integration-related activities*
|
3,879
|
|
1,970
|
Non-GAAP provision for
income taxes
|
$
136,729
|
|
$
84,693
|
|
|
|
|
Reported net
income
|
$
518,577
|
|
$
399,487
|
Derivative
mark-to-market (gains) losses
|
3,605
|
|
41,020
|
Business realignment
activities
|
(293)
|
|
313
|
Acquisition and
integration-related activities
|
12,246
|
|
6,245
|
Non-GAAP net
income
|
$
534,135
|
|
$
447,065
|
|
|
|
|
Reported EPS -
Diluted
|
$
2.52
|
|
$
1.94
|
Derivative
mark-to-market (gains) losses
|
0.01
|
|
0.24
|
Acquisition and
integration-related activities
|
0.08
|
|
0.04
|
Tax effect of all
adjustments reflected above**
|
(0.01)
|
|
(0.05)
|
Non-GAAP EPS -
Diluted
|
$
2.60
|
|
$
2.17
|
|
* 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
|
|
October 1,
2023
|
|
October 2,
2022
|
As reported gross
margin
|
44.9 %
|
|
40.6 %
|
Non-GAAP gross margin
(1)
|
44.9 %
|
|
42.5 %
|
|
|
|
|
As reported operating
profit margin
|
24.3 %
|
|
20.4 %
|
Non-GAAP operating
profit margin (2)
|
24.9 %
|
|
22.6 %
|
|
|
|
|
As reported effective
tax rate
|
20.6 %
|
|
15.6 %
|
Non-GAAP effective tax
rate (3)
|
20.4 %
|
|
15.9 %
|
|
|
(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 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 third quarter of 2023, we
recognized a benefit in business realignment activities. During the
third quarter of 2022, 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
third quarter of 2023, we incurred costs related to the acquisition
of two manufacturing plants from Weaver Popcorn Manufacturing,
Inc., the integration of the 2021 acquisitions of Dot's Pretzels,
LLC ("Dot's") and Pretzels Inc. ("Pretzels") into our North America
Salty Snacks segment and costs related to building and upgrading
our new ERP system for implementation across our North America
Salty Snacks segment in the fourth quarter of 2023. During
the third quarter of 2022, we incurred costs related to the
integration of the 2021 acquisitions of Lily's Sweets, LLC, Dot's
and Pretzels.
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; 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 or implementation of our new
enterprise resource planning system; and such other matters as
discussed in our Annual Report on Form 10-K for the year ended
December 31, 2022 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 October 1, 2023 and October 2, 2022
|
(unaudited) (in
thousands except percentages and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
October 1,
2023
|
|
October 2,
2022
|
|
October 1,
2023
|
|
October 2,
2022
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$ 3,029,987
|
|
$ 2,728,153
|
|
$ 8,507,881
|
|
$ 7,766,956
|
Cost of
sales
|
|
1,669,734
|
|
1,619,653
|
|
4,633,207
|
|
4,412,977
|
Gross profit
|
|
|
1,360,253
|
|
1,108,500
|
|
3,874,674
|
|
3,353,979
|
|
|
|
|
|
|
|
|
Selling, marketing and
administrative expense
|
624,304
|
|
551,880
|
|
1,777,695
|
|
1,619,564
|
Business realignment
costs
|
—
|
|
—
|
|
441
|
|
274
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
735,949
|
|
556,620
|
|
2,096,538
|
|
1,734,141
|
Interest expense,
net
|
|
39,755
|
|
35,378
|
|
114,101
|
|
101,970
|
Other (income) expense,
net
|
|
42,781
|
|
48,157
|
|
130,248
|
|
78,222
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
653,413
|
|
473,085
|
|
1,852,189
|
|
1,553,949
|
Provision for income
taxes
|
|
134,836
|
|
73,598
|
|
339,444
|
|
305,428
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
518,577
|
|
$
399,487
|
|
$ 1,512,745
|
|
$ 1,248,521
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
- Basic
|
- Common
|
$
2.60
|
|
$
2.00
|
|
$
7.56
|
|
$
6.23
|
|
- Diluted
|
- Common
|
$
2.52
|
|
$
1.94
|
|
$
7.36
|
|
$
6.04
|
|
- Basic
|
- Class B
|
$
2.36
|
|
$
1.82
|
|
$
6.93
|
|
$
5.67
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
- Basic
|
- Common
|
150,116
|
|
147,169
|
|
149,307
|
|
146,557
|
|
- Diluted
|
- Common
|
205,488
|
|
206,274
|
|
205,613
|
|
206,667
|
|
- Basic
|
- Class B
|
54,614
|
|
58,114
|
|
55,447
|
|
59,058
|
|
|
|
|
|
|
|
|
|
|
Key margins:
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
44.9 %
|
|
40.6 %
|
|
45.5 %
|
|
43.2 %
|
Operating profit
margin
|
|
24.3 %
|
|
20.4 %
|
|
24.6 %
|
|
22.3 %
|
Net margin
|
|
17.1 %
|
|
14.6 %
|
|
17.8 %
|
|
16.1 %
|
The Hershey
Company
|
Supplementary
Information – Segment Results
|
for the periods
ended October 1, 2023 and October 2, 2022
|
(unaudited) (in
thousands except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
October 1,
2023
|
|
October 2,
2022
|
|
%
Change
|
|
October 1,
2023
|
|
October 2,
2022
|
|
%
Change
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Confectionery
|
|
$
2,457,647
|
|
$
2,235,550
|
|
9.9 %
|
|
$
6,902,891
|
|
$
6,361,695
|
|
8.5 %
|
North America Salty
Snacks
|
|
345,182
|
|
275,024
|
|
25.5 %
|
|
887,532
|
|
757,443
|
|
17.2 %
|
International
|
|
227,158
|
|
217,579
|
|
4.4 %
|
|
717,458
|
|
647,818
|
|
10.8 %
|
Total
|
|
$
3,029,987
|
|
$
2,728,153
|
|
11.1 %
|
|
$
8,507,881
|
|
$
7,766,956
|
|
9.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Confectionery
|
|
$ 847,469
|
|
$ 706,815
|
|
19.9 %
|
|
$
2,392,397
|
|
$
2,107,564
|
|
13.5 %
|
North America Salty
Snacks
|
|
57,389
|
|
44,516
|
|
29.0 %
|
|
147,934
|
|
103,250
|
|
43.3 %
|
International
|
|
31,688
|
|
35,379
|
|
(10.4) %
|
|
127,838
|
|
108,058
|
|
18.2 %
|
Total segment
income
|
|
936,546
|
|
786,710
|
|
19.0 %
|
|
2,668,169
|
|
2,318,872
|
|
15.1 %
|
Unallocated corporate
expense (1)
|
|
183,146
|
|
171,417
|
|
6.8 %
|
|
513,284
|
|
468,785
|
|
9.5 %
|
Unallocated
mark-to-market losses on commodity derivatives (2)
|
|
1,753
|
|
50,065
|
|
(96.5) %
|
|
5,217
|
|
63,524
|
|
(91.8) %
|
(Benefits) costs
associated with business realignment initiatives
|
|
(426)
|
|
393
|
|
(208.4) %
|
|
3,440
|
|
2,373
|
|
45.0 %
|
Acquisition and
integration-related activities
|
|
16,124
|
|
8,215
|
|
96.3 %
|
|
49,690
|
|
36,481
|
|
36.2 %
|
Other miscellaneous
losses
|
|
—
|
|
—
|
|
NM
|
|
—
|
|
13,568
|
|
NM
|
Operating
profit
|
|
735,949
|
|
556,620
|
|
32.2 %
|
|
2,096,538
|
|
1,734,141
|
|
20.9 %
|
Interest expense,
net
|
|
39,755
|
|
35,378
|
|
12.4 %
|
|
114,101
|
|
101,970
|
|
11.9 %
|
Other (income) expense,
net
|
|
42,781
|
|
48,157
|
|
(11.2) %
|
|
130,248
|
|
78,222
|
|
66.5 %
|
Income before income
taxes
|
|
$ 653,413
|
|
$ 473,085
|
|
38.1 %
|
|
$
1,852,189
|
|
$
1,553,949
|
|
19.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Nine Months
Ended
|
|
|
|
October 1,
2023
|
|
October 2,
2022
|
|
October 1,
2023
|
|
October 2,
2022
|
Segment income as a
percent of net sales:
|
|
|
|
|
|
|
|
|
North America Confectionery
|
|
34.5 %
|
|
31.6 %
|
|
34.7 %
|
|
33.1 %
|
North America Salty Snacks
|
|
16.6 %
|
|
16.2 %
|
|
16.7 %
|
|
13.6 %
|
International
|
|
13.9 %
|
|
16.3 %
|
|
17.8 %
|
|
16.7 %
|
The Hershey
Company
|
Consolidated Balance
Sheets
|
as of
October 1, 2023 and December 31, 2022
|
(in thousands of
dollars)
|
|
|
|
|
Assets
|
October 1,
2023
|
|
December 31,
2022
|
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
471,252
|
|
$
463,889
|
Accounts receivable -
trade, net
|
1,127,728
|
|
711,203
|
Inventories
|
1,347,820
|
|
1,173,119
|
Prepaid expenses and
other
|
243,617
|
|
272,195
|
|
|
|
|
Total current
assets
|
3,190,417
|
|
2,620,406
|
|
|
|
|
Property, plant and
equipment, net
|
3,156,064
|
|
2,769,702
|
Goodwill
|
2,693,182
|
|
2,606,956
|
Other
intangibles
|
1,907,371
|
|
1,966,269
|
Other non-current
assets
|
950,395
|
|
944,989
|
Deferred income
taxes
|
38,242
|
|
40,498
|
|
|
|
|
Total assets
|
$
11,935,671
|
|
$
10,948,820
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Accounts
payable
|
$
1,085,016
|
|
$
970,558
|
Accrued
liabilities
|
968,926
|
|
832,518
|
Accrued income
taxes
|
54,864
|
|
6,710
|
Short-term
debt
|
819,880
|
|
693,790
|
Current portion of
long-term debt
|
7,791
|
|
753,578
|
|
|
|
|
Total current
liabilities
|
2,936,477
|
|
3,257,154
|
|
|
|
|
Long-term
debt
|
4,086,087
|
|
3,343,977
|
Other long-term
liabilities
|
641,801
|
|
719,742
|
Deferred income
taxes
|
303,666
|
|
328,403
|
|
|
|
|
Total
liabilities
|
7,968,031
|
|
7,649,276
|
|
|
|
|
Total stockholders'
equity
|
3,967,640
|
|
3,299,544
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
11,935,671
|
|
$
10,948,820
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/hershey-reports-third-quarter-2023-financial-results-reaffirms-2023-net-sales-and-earnings-outlook-301967927.html
SOURCE The Hershey Company