Hershey’s makes a surprise profit in the third quarter of the fiscal year.
The U.S. company leads analysts’ estimates for profits and revenues.
The chocolate manufacturer is reinstating its forecast for the full year.
The Hershey Company (NYSE: HSY) on Friday announced financial results that exceeded Wall Street’s estimates for profits and revenues in the third quarter of the fiscal year. The company also announced an optimistic outlook for the full year on Friday.
CEO Michele Buck commented on Friday’s earnings report and said
“Our core business in the U.S. remains healthy as consumers reach for small treats during the pandemic, and our decision to move to Halloween before the season supports consumers’ desire to find new and creative ways to celebrate safely.
Hershey’s Q3 financial results compared to analyst estimates
Hershey’s said its third quarter net profit was £339.95 million, or £1.63 per share. For the comparative quarter last year, net profit was capped at a lower figure of £247.23 million or £1.17 per share. In an announcement last week, Hershey’s announced that it had acquired a stake in snack manufacturer Quinn.
Adjusted for non-recurring items, the US multinational company earned £1.41 per share in the last quarter. The FactSet Consensus for its earnings per share for the third quarter was a lower £1.32. In a separate announcement from the U.S. on Friday, the hospitality company Marriott International also said that its revenues were down 57.3% in the third quarter of the fiscal year.
In terms of revenues, Hershey’s recorded annualized growth of 4.0% to £1.69 billion in the third quarter, compared to the expected £1.66 billion according to the FactSet. The gross margin, according to the Derry Borough based company, jumped from 44.2% last year to 48.7% in the last quarter.
Hershey’s forecast for the full year
Hershey’s had suspended its forecast for the financial year 2020 in April due to the coronavirus pandemic. On Friday the company reinstated its full year guidance and said it expects adjusted earnings per share to fall in a range of £4.70 to £4.74 this year. The FactSet consensus for its annual adjusted earnings per share is instead a lower figure of £4.60.
Hershey’s rose nearly 4% in Friday’s trading ahead of the market. Including the price action, the company’s shares are now trading at £113.49 after recovering from a year low of £84.69 per share in March when the impact of COVID-19 peaked. Here is what you need to know about shares and the stock market.
At the time of writing this article, the world’s largest chocolate maker is valued at £16.68 billion and has a price-to-earnings ratio of 29.20.