The Hershey Company (NYSE:HSY) shares are ticking higher today after the confectionery maker announced its results for the fourth quarter. Revenue ticked marginally higher by 0.2% year-over-year to $2.66 billion. The figure fell short of expectations by $60 million. In contrast, EPS of $2.02 fared better than estimates by $0.07.
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During the quarter, favorable pricing drove revenue in the North American confectionery segment nearly 2.1% higher despite volume pressures. Further, an increase in pricing and a favorable volume/mix helped the company clock 12.7% higher sales in the International vertical. In contrast, sales in Hershey’s North America Salty Snacks segment plummeted by 24.6% owing to planned inventory declines and softness in the ready-to-eat popcorn category.
Amid these challenges, Hershey expects muted earnings growth for Fiscal Year 2024 due to higher cocoa and sugar prices. Net sales growth for the year is pegged in the range of 2% to 3%. Further, Hershey expects to realize cost savings of $100 million in 2024 from efficiency initiatives. Adjusted EPS for the year is estimated at $9.59.
Separately, the company has increased its quarterly dividend by 15% to $1.37 per share. The HSY dividend is payable on March 15 to investors of record on February 20.
What Is the Forecast for HSY Stock?
Overall, the Street has a Hold consensus rating on Hershey, and the average HSY price target of $203.80 points to a modest 6.7% potential upside in the stock. That’s after a nearly 11% drop in the company’s share price over the past six months.
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