Hershey reaffirms 2018 reported net sales and adjusted earnings outlook

According to the company, consolidated net sales were USD 2.080 bn in the third quarter of 2018 versus USD 2.033 bn in the year ago period, an increase of 2.3%. The net impact of acquisitions and divestitures was a 2.5 point benefit, volume was a 1.7 point benefit and net price realization was a 1.2 point headwind. Foreign currency translation was a 0.7 point headwind.

Reported gross margin of 41.5% represented a decline of 490 basis points versus the third quarter of 2017. Adjusted gross margin was 44.0% in the third quarter of 2018, compared to 45.3% in the third quarter of 2017, a decline of 130 basis points. This was in line with expectations, driven by higher freight and logistics costs, as well as incremental investments in trade and packaging. Third quarter 2018 reported operating profit was USD 406.3 m, resulting in an operating margin of 19.5%. Adjusted operating profit of USD 470.7 m increased 5.1% versus the third quarter of 2017. This resulted in an adjusted operating margin of 22.6%, an increase of 60 basis points versus the third quarter of 2017.

“We remain on track to achieve the financial targets we shared earlier this year, and I am pleased with the progress we are making against our key strategic focus areas," said Michele Buck, The Hershey Company President and Chief Executive Officer.