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Hershey Media Report 10/28/16
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Hershey Revenue and Profit Rise in Quarter
Oct 28, 2016 | Wall Street Journal
By Austen Hufford
Brief mention of Bilbrey's decision to retire and the rejected bid from Mondelez. Relevant portion highlighted below. -
Hershey profit beats estimates on U.S. demand, lower ad spending
Oct 28, 2016 | Reuters
Brief mention of the rejected bid from Mondelez, John Bilbrey's retirement, and the Trust. Relevant portion highlighted below. -
With Hershey deal dead, Oreo-maker Mondelez keeps earnings up with cuts
Oct 27, 2016 | Bloomberg
By Craig Giammona
After an unsuccessful bid to acquire Hershey Co. earlier this year, Mondelez International is back to its previous playbook: using cost cuts to fuel earnings growth. -
Why Hershey Co (NYSE:HSY) Got Upgraded?
Oct 28, 2016 | Review Fortune
By Mike Anderson
Hershey Co (NYSE:HSY) shares were down -0.67% on Thursday when approximately 2.42M shares were traded, against the average daily trading volume of 1.13M. Analysts at Credit Agricole recently upgraded the stock to Underperform from Buy. Hershey Co (NYSE:HSY) has a consensus buy rating, according to Zacks Investment Research. No analyst has rated the stock with a sell rating, 10 have assigned a hold rating, Zero says it’s a buy, and 1 has assigned a strong buy rating to the company.
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Hershey Revenue and Profit Rise in Quarter
Oct 28, 2016 | Wall Street Journal
By Austen Hufford
Hershey Co. said revenue and profit rose in its third quarter as the chocolate maker continues to search for a new leader and craft a path forward as an independent company after a rejected takeover.
Hershey now expects annual adjusted earnings per share to be between $4.28 and $4.32, above its previous range of $4.24 to $4.28. Analysts had expected annual earnings per share of $4.26. Hershey continues to expect annual sales to rise 1%.
Hershey is looking for a new chief executive after the company said earlier this month that Chief Executive J.P. Bilbrey will retire as chief executive next July to spend more time with his family but remain as chairman. The plans to step down came after months of failed negotiations to sell the company to Mondelez International Inc.
Traditional candy faces growing competition from fruit-and-nuts bars, yogurt and other options Americans see as healthier. Hershey bought Krave jerky last year, in an effort to broaden its reach.
In the third quarter, Hershey’s profit was $227.4 million, or $1.06 a share, compared with a profit of $154.8 million, or 70 cents a share, a year prior. Revenue rose 2.2% to $2 billion. Analysts polled by Thomson Reuters had expected earnings of $1.18 on $1.99 billion in revenue.
Excluding the impact of foreign currency rates, revenue rose 2.4% as the amount of products sold rose 1%.
India and Canada were trouble spots for the company this quarter, with constant currency sales falling 7.7% in Canada and 21% in India.
In recent years, Hershey’s chocolate business in China has been a thorn in its side, since buying a local candy company there in 2014. In the quarter, however China sales rose 14.6% on a constant-currency basis as Brazil sales rose 27%.
Hershey’s international business rose 5.3% to $238.9 million in revenue as its North American segment grew 1.8% to $1.76 billion.
Gross margin declined to 42.5% from 45.5% on unfavorable product mix and supply chain costs.
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Hershey profit beats estimates on U.S. demand, lower ad spending
Oct 28, 2016 | Reuters
Hershey Co (HSY.N), the maker of Hershey's Kisses and Reese's Peanut Butter Cups, reported a better-than-expected quarterly profit as demand strengthened in the U.S. and the company spent less on advertising and marketing.
Hershey's net sales in North America, which account for about 85 per cent of total sales, rose 1.8 per cent to US$1.76 billion in the third quarter ended Oct. 2.
Shares of the company, which is based out of its namesake town in Pennsylvania, were up 2 per cent at US$97.42 in pre-market trading on Friday.
The company, which rejected a US$23 billion buyout offer from Mondelez International Inc in June, said in July it would cut costs by consolidating its supply chain and some factories in China and North America, as well as spending less on advertising.
Hershey is also set to undergo a management overhaul, with chief executive John Bilbrey retiring next year and Hershey's controlling charitable trust reaching a major reform agreement with its overseer, the Pennsylvania attorney general's office, following a months-long investigation.
The trust, whose consent is key for any change in the company's ownership, came in the spotlight earlier this year following its rejection of Mondelez's offer.
Hershey's net income rose to US$227.4 million, or US$1.06 per share, in the quarter, from US$154.8 million, or 70 cents US per share, a year earlier.
The company's costs fell 1.7 per cent to US$1.63 billion. Its year-ago quarter included a US$31-million goodwill impairment charge related to its acquisition of Chinese candy maker Shanghai Golden Monkey.
Excluding items, Hershey earned US$1.29 per share, beating the average analyst estimate of US$1.18 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 2.2 per cent to US$2 billion, in line with analysts' average estimate and marking the second straight rise in quarterly sales after four quarters of no growth.
Hershey raised its 2016 adjusted earnings forecast to US$4.28-$4.32 per share from US$4.24-$4.28, citing cost savings and a slightly more favorable tax rate than expected.
The company's stock had risen 7 per cent this year till Thursday's close, but is down 1.6 per cent since it declined Mondelez's offer.
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With Hershey deal dead, Oreo-maker Mondelez keeps earnings up with cuts
Oct 27, 2016 | Bloomberg
By Craig Giammona
After an unsuccessful bid to acquire Hershey Co. earlier this year, Mondelez International is back to its previous playbook: using cost cuts to fuel earnings growth.
The global snack giant posted third-quarter profit of 52 cents a share, excluding some items, well ahead of the 43 cents predicted by analysts. The Deerfield-based company also boosted its profit forecast on Wednesday, fueled by a push to reduce expenses by $3 billion and higher product prices.
The leaner operations have helped Mondelez cope with a decline in sales, hurt by currency fluctuations and a slowdown in Europe. The maker of Oreos and Triscuits relies on overseas markets for most of its revenue, making the strong U.S. dollar especially painful.
"We've delivered quarter after quarter of very solid execution," Chief Executive Officer Irene Rosenfeld said in an interview with Bloomberg Television. "We're continuing to reduce our overhead, and we've been able to reinvest in our franchises even in these tough times."
Mondelez shares rose as much as 4.6 percent to $44.74 in New York after the results were released. The shares had slumped 4.6 percent this year through Tuesday's close.
Third-quarter sales declined 6.6 percent to $6.4 billion, narrowly missing analysts' average projection of $6.46 billion. The results were dragged down by a 3.2 percent drop in Europe, the company's largest market.
Still, Rosenfeld's cost-cutting efforts led Mondelez to raise its profit forecast for the year, with the company saying it expects adjusted earnings per share to grow 25 percent on a constant-currency basis. The company had previously predicted "double-digit" profit growth.
Mondelez should get a boost the rest of this year, and into 2017, from growing sales of chocolate in China and the U.S., two markets where the company is expanding distribution, Rosenfeld said. She also noted that Mondelez has not seen much of an impact from the Brexit vote in the U.K., primarily because Mondelez makes products there and buys a majority of its cocoa in pounds.
"Those two factors together leave us reasonably well-positioned to weather whatever impact we see," Rosenfeld said.
Rosenfeld has been under pressure to improve the company's margins, which have trailed its food-industry competitors. That's led to speculation that Mondelez could be a takeover target itself. The company's bid for Hershey was seen as an attempt to boost its exposure to the U.S. market and potentially ward off suitors.
Mondelez spent two months trying to coax the chocolate maker into accepting a takeover offer earlier this year that would have created the world's largest candy company. The bid was abandoned after Mondelez said it saw "no path forward" to a deal. The seller ofCadbury is the second-largest seller of chocolate in the world, but it has little presence in the U.S. market — a weak spot that the acquisition of Hershey was meant to address.
Shortly after the deal was nixed, Mondelez announced an expansion of its U.S. chocolate line. Oreo-branded candy bars will be hitting domestic stores, and the company's premium Green & Black's brand will be distributed more broadly.
Mondelez's revenue in North America was roughly flat in the quarter at $1.75 billion.
Mondelez's cost cuts, and efforts to raise prices and expand sales volume, are paying off, said Diana Rosero-Pena, an analyst at Bloomberg Intelligence.
"It seems like they're starting to hit their stride," she said. "That's a good thing considering they're still dealing with currency challenges."
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Why Hershey Co (NYSE:HSY) Got Upgraded?
Oct 28, 2016 | Review Fortune
By Mike Anderson
Hershey Co (NYSE:HSY) shares were down -0.67% on Thursday when approximately 2.42M shares were traded, against the average daily trading volume of 1.13M. Analysts at Credit Agricole recently upgraded the stock to Underperform from Buy. Hershey Co (NYSE:HSY) has a consensus buy rating, according to Zacks Investment Research. No analyst has rated the stock with a sell rating, 10 have assigned a hold rating, Zero says it’s a buy, and 1 has assigned a strong buy rating to the company.
Analysts have a consensus target price of $103.79 in the 12-month period. The price objective is 8.67% higher than the recent closing price of $95.51. The 52-week price range is $80.92-$117.15 and the company has a market capitalization of $20.31 billion.
Hershey Co (HSY) on October 15, 2016 announced that James E. Nevels, the company’s lead independent director, has informed the company that he does not intend to stand for re-election at the company’s 2017 Annual Meeting of Stockholders. Nevels, age 64, was elected to the Hershey Board of Directors in 2007 and served as non-executive chairman from 2009 until 2015. Nevels will continue to serve as lead independent director for the remainder of his term.
“It has been an honor to serve on the board of the greatest confectionery company in the world,” Nevels said. “I am fully confident that after nearly a decade of service, the time is right for me to move on to other pursuits. This decision provides the board with the continued opportunity to select diverse and experienced members who can help guide the company through its next phase of growth and consumer-centric brand building.”
“On behalf of the Board of Directors and the company, I want to express our sincere appreciation to Jim for his leadership, contributions and dedication to The Hershey Company,” said J.P. Bilbrey, Chairman, President and CEO of Hershey. “We have valued Jim’s perspective and insight over the years. Jim has been an important part of the company’s success and its reputation in the market as a company committed to bringing goodness to the world through its iconic brands, remarkable people and community engagement.”
The Hershey Company, headquartered in Hershey, Pa., is a global confectionery leader known for bringing goodness to the world through its chocolate, sweets, mints and other great-tasting snacks. Hershey has approximately 21,000 employees around the world who work every day to deliver delicious, quality products.
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