Fourth quarter results for Hershey

The Hershey Company has announced sales and earnings for the fourth quarter ended 31 December 2014. Consolidated net sales were $2,010,027,000 compared with $1,956,253,000 for the fourth quarter of 2013. Reported net income for the fourth quarter of 2014 was $202,508,000 or $0.91 per share-diluted, compared with $186,075,000 or $0.82 per share-diluted for the comparable period of 2013.

“In 2014 Hershey made progress against its strategic initiatives as the US business increased its overall candy, mint and gum (CMG) market share to 31.4 per cent, we acquired Shanghai Golden Monkey, more than doubling the company’s presence in China, we expanded into snacks and adjacencies with the launch of Hershey’s Spreads Snacksters Graham Dippers and we sourced 30 per cent of our cocoa needs from certified and sustainable cocoa farms, putting us in solid position to deliver on our goal to source 100 percent certified cocoa by 2020,” says John P Bilbrey, president and chief executive officer, The Hershey Company.

“Building on our snacks and adjacency strategy, today we announced that we entered into an agreement to acquire Krave Jerky which enables us to enter the rapidly growing meat snacks category. As expected, US marketplace performance sequentially improved throughout the year. Fourth quarter US CMG retail takeaway increased 3.8 per cent, driven by solid Halloween and Holiday gains with market share increases across all segments; chocolate, non-chocolate candy, mint and gum.

“For the full year 2014, Hershey US CMG retail takeaway increased 2.7 per cent, about one full percentage point greater than the category growth rate. However, throughout the year, retail store traffic and consumer trips were irregular. Additionally, increased levels of distribution and in-store activity of items such as salty, bakery and meat snacks, by both mainstream and newer contemporary niche manufacturers, were prevalent throughout the year and drove broader snacking category growth in 2014.

“This adversely impacted purchases of non-seasonal candy products resulting in net sales and operating profit that were below our expectations. In 2015, we expect marketing and selling efforts to be more precision based as they are focused on specific consumers and retail channels which should help mitigate the impact of volume elasticity related to the previously announced price increase and enable us to deliver upon our objectives.”

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