Hershey posts increase in Q4 sales
Hershey has reported net sales of $1.4bn for the fourth quarter of fiscal 2009, an increase of 2.2 p
The company said that fourth quarter profitability was driven by net price realisation, supply chain efficiencies, productivity, marketing expenses and employee-related costs.
In 2009, consolidated net sales were $5.2bn, an increase of 3.2 per cent compared with $5.1bn for the prior year. Net income for the period was $436m or $1.9 per share-diluted, compared with $311.4m or $1.4 per share-diluted for the prior year.
David West, president and chief executive officer of Hershey, said: "Net sales increased 2.2 per cent in the quarter, driven primarily by pricing and improvements in our international business, including an approximate one point benefit from foreign currency exchange rates.
"Importantly, base business volume trends, while down due to volume elasticity associated with the US pricing action, sequentially improved in the fourth quarter, net of the previously communicated decisions to close our on-line gifts business and discontinue certain premium chocolate products. Additionally, as communicated in October, due to timing, shipments of Valentine's and Easter seasonal products were lower in the fourth quarter of 2009 versus 2008."
In the first quarter of 2010 the company expects to distribute new Hershey's Bliss white chocolate and expansion of the Pieces format to include Hershey's Special Dark, Almond Joy and York will continue.
The company also anticipates to increase advertising by 25-30 per cent during the year, supporting new product launches and core brands - particularly Hershey's, Reese's, Hershey's Kisses, Bliss, Twizzlers and Kit Kat. It also plans to launch new core brand advertising campaigns behind the Almond Joy, Mounds and York brands.