uploads///HSY EPS

Hershey Beats 1Q18 Earnings Estimates, Costs Remain a Drag


Apr. 27 2018, Published 11:12 a.m. ET

Earnings exceed estimates

In 1Q18, Hershey (HSY) reported EPS (earnings per share) of $1.41, beating analysts’ estimate of $1.40 and marking an 8.5% rise YoY (year-over-year). Improved sales and lower tax drove the company’s 1Q18 earnings higher, offset by increased costs.

Article continues below advertisement

Factors that impacted Hershey’s 1Q18 EPS

As discussed above, Hershey’s 1Q18 EPS benefited from improved volumes. Incremental sales from Amplify Snack Brands and a significant adjusted effective tax rate reduction (-660 basis points) further supported its earnings, while higher-than-expected freight and logistics costs and trade and packaging investments to drive sales dragged them down.

Peers Kellogg (K), Mondelēz (MDLZ), Conagra Brands (CAG), and J.M. Smucker (SJM) are expected to report EPS improvement YoY. However, costs and increased trade spending are also expected to hurt their margins and EPS growth. Analysts expect Kraft Heinz’s (KHC) 1Q18 earnings to fall YoY, reflecting lower volumes and higher costs.

Guidance reiterated 

Hershey has raised its 2018 EPS guidance to 14%–16% growth YoY to $5.33–$5.43. Lower tax and accretion from its Amplify acquisition are expected to drive earnings higher. Its Amplify acquisition is projected to contribute $0.08–$0.12 to the company’s fiscal 2018 EPS, offset by increased costs and trade spending.


More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.