Hershey reports Q4 earnings beat, but shares fall on weak outlook

Hershey Corp.
HSY,
-0.27%
reported a fourth-quarter earnings beat before market open Thursday, although shares fell 3% in premarket trades, weighed down by weaker-than-expected sales and guidance. The chocolate and salty snacks company reported net income of $349 million, or earnings of $1.70 a share, compared with net income of $396 million, or earnings of $1.92 a share, in the prior year’s quarter. The company’s adjusted earnings were $2.02 a share, flat from the prior year’s quarter. Analysts surveyed by FactSet were looking for adjusted earnings of $1.95 a share. Fourth-quarter sales were $2.66 billion, an increase of 0.2% on the same period last year. Analysts surveyed by FactSet were looking for sales of $2.72 billion. North America Confectionery sales increased 2.1% on the same period last year. North American salty snack sales fell 24.6% compared with the prior year’s quarter. Hershey said North American salty snack volume decreased 26.1%, reflecting an approximate 16-point headwind from planned inventory declines related to an Enterprise Resource Planning implementation in October 2023. Excluding the inventory impact, volume declined high-single-digits due to category softness within the ready-to-eat popcorn category, the company said. For 2024, Hershey expects sales of $11.39 billion to $11.5 billion, or net sales growth of 2% to 3% from 2023 and adjusted earnings to be flat at $9.59 a share, when excluding one-time costs associated with the ERP implementation and incremental cost savings initiatives. Analysts surveyed by FactSet are looking for 2024 sales of $11.59 billion and adjusted earnings of $9.78 a share. On Thursday Hershey announced dividends of $1.370 on the company’s common stock and $1.245 on its class B common stock, an increase of 15%. The company’s stock has fallen 17.4% in the last 52 weeks, compared with the S&P 500 index’s
SPX,
+0.82%
gain of 22.4%.