Adjusted gross margin for the fourth quarter and full year increased 80 basis points and 220 basis points, respectively, slightly lower than expectations. In the fourth quarter, lower commodity costs and supply chain productivity contributed to gross margin expansion. The gross margin expansion was less than our earlier estimates as greater than expected fourth quarter volume required purchases at higher prices and year-end inventory valuations generated higher costs than anticipated.Selling, marketing and administrative (SM&A) expenses, excluding advertising, increased 10 percent in the fourth quarter, driven by planned investments in global go-to-market capabilities, selling and marketing costs, and other employee-related expenses. As a result, adjusted EBIT for the fourth quarter increased 15.3 percent generating adjusted EBIT margin of 16.3 percent, a 50 basis point increase versus last year. For the fourth quarter and full year, advertising increased 20 percent and 21 percent, respectively, supporting new product launches as well as core brands in the U.S. and international markets. Additionally, as previously communicated, the tax rate in the fourth quarter of 34.2 percent was greater than the year ago period resulting in a full-year tax rate of 34.3 percent, in line with our estimate.
Hershey Announces Fourth Quarter And Full-Year 2013 Results; Reaffirms Outlook For 2014
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