The Hershey Company (NYSE: HSY) reported strong second-quarter results on Thursday and raised the guidance for full-year 2022 on the back of rising demand.
Adjusted earnings grew 22.4% year-over-year to $1.80 a share, beating the Street’s estimate of $1.69 per share. Net sales rose 19.3% to $2.37 billion, driven by increased volume and prices across all segments.
North America Confectionery segment’s net sales jumped nearly 13% year-over-year to $1.9 billion. Net sales of the North America Salty Snacks segment almost doubled to $256.3 million. The International segment’s net sales climbed 21.3% to $207.2 million.
Adjusted gross margin fell 250 basis points to 43.9% as a result of a rise in inflation, logistics, packaging, and raw material costs. Adjusted operating profit rose 14.7% year-over-year to around $527 million.
The President and CEO of Hershey, Michele Buck, said, “These results reflect the strength and resilience of our categories, consumers’ love for our brands, the investments we are making in our business, and the exceptional execution of our dedicated employees. We are raising our financial expectations for the year and investing more heavily in our brands, capabilities and people in the second half to continue this momentum into 2023.”
For the full-year 2022, the Pennsylvania-based company expects net sales and adjusted EPS to grow in the range of 12% to 14% versus the previous guidance range of 10% to 12%. It expects adjusted EPS between $8.05 and $8.20.
Analysts Are Cautiously Optimistic on HSY Stock
Following Hershey’s second-quarter results, Kenneth Goldman of J.P. Morgan (NYSE: JPM) maintained a Hold rating on the stock and raised the price target to $210 from $203 (6.4% downside potential).
Last week, Stephen Powers of Deutsche Bank (NYSE: DB) reiterated a Hold rating on Hershey and increased the price target by $1 to $219 (2.4% downside potential).
Overall, the stock has a Moderate Buy consensus rating based on five Buys and four Holds. HSY’s average price forecast of $226.98 implies 1.2% upside potential.
Insiders Are Loading up on Hershey Shares
TipRanks’ Insider Trading Activity tool shows that Insider Confidence Signal is currently Positive for Hershey, with corporate insiders buying HSY shares worth $322.6 million in the last three months.
HSY Stock Is in the Fast Lane
Following the release of its results, HSY stock jumped 2.8% on Thursday. It gained another 0.3% in the extended trading session to end the day at $225. The confectionery products maker has been consistently posting better-than-expected quarterly results for the last two years. This has helped push the stock price up 28% over the past year and 57% in the last three years.
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