What’s behind Hershey’s Q1 Sales Beat?



Sales exceed estimates

In the first quarter, Hershey’s (HSY) net sales rose 2.3% YoY (year-over-year) to $2.0 billion, beating analysts’ estimate. Its organic sales rose ~2%, reflecting a 0.2% pricing improvement and 1.7% higher volumes driven by a longer Easter season. Acquisitions and divestitures contributed 0.9% of its net sales growth, whereas currency rates and SKU[1.stock keeping unit] rationalization slowed things down.

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For Mondelēz (MDLZ), higher pricing and organic volumes are expected to support organic sales, while currency rates are expected to drag down net sales. Meanwhile, incremental sales from acquisitions are expected to drive Conagra Brands’ (CAG), General Mills’ (GIS), and Campbell Soup’s (CPB) top lines.

Sales by segment

Hershey’s net US and Canadian sales rose 3.2% to $1.8 billion in the first quarter, with higher volumes, pricing, and acquisitions contributing 1.4%, 0.4%, and 1.6% of net sales growth. Currency volatility had a 0.2% impact.

Hershey’s International and Other net sales fell 4.9% to $0.2 billion, reflecting an impact of 4.6% from divestitures and 3.5% from foreign exchange rates. However, its organic sales rose on the back of a 4.0% increase in volumes. Pricing fell 0.8%, and India, China, Mexico, and Brazil reported healthy organic sales growth.


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