The Hershey Company (HSY – Analyst Report) is one of the largest chocolate manufacturers in North America marketing some of the world’s leading brands like Hershey’s, Reese’s and Kisses which enjoy widespread consumer acceptance.
Hershey’s sales trends have been weak since 2014 due to lower retail store traffic, intense competition from the broader snacking category and soft international growth. However, margins have been better supported by price increase, supply chain savings and productivity gains.
HSY witnessed downward earnings estimate revisions for 2016 over the past 30 days. However, HSY has a mixed earnings surprise history. HSY has posted positive earnings surprise in two of the past four quarters while delivering negative earnings surprise in the other two, bringing the average to a positive surprise of 0.69%.
Currently, HSY has a Zacks Rank #3 (Hold), but that could change following Hershey’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: HSY beat on earnings. Our consensus earnings estimate called for EPS of $1.05/share, and the company reported EPS of $1.08 instead. Investors should note that these figures take out stock option expenses. Lower than expected advertising spend offset another weak top line performance.
Revenues: HSY reported revenues of $1.91 billion. This missed our consensus estimate of $1.97 billion. North America net sales were below expectations while China sales remained weak.
Key Stats to Note: Excluding the currency impact, sales declined 3.1%. The company announced that its board of directors has approved a new $500 million share buyback program.
Share Price Impact: In-active in pre-market trading.
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