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Hershey Reaffirms Financial Outlook And Charts Year Of Innovation

Stocks in this article: HSY

In a presentation today at the 2014 Consumer Analyst Group of New York (CAGNY) conference, The Hershey Company (NYSE:HSY) highlighted its plans for continued growth in North America by building on the strength of its core brands. Hershey also discussed a number of successes and key initiatives in its international focus markets, including its recent announcement to acquire Shanghai Golden Monkey, that will help further its goal of accelerating revenue growth in these markets as the company drives towards its goal of $10 billion in net sales by 2017.

The company’s progress against its consumer-driven approach to growth in North America and key international markets was part of a broader presentation by Hershey executives John P. Bilbrey, President and Chief Executive Officer; Humberto P. Alfonso, President, International; Michele G. Buck, President, North America; and David Tacka, Chief Financial Officer.

“Our consumer-centric approach, combined with a growing global demand for confections, has enabled us to engage and reach new consumers. Our global brands are resonating with loyal consumers in many new markets and we are gaining market share. The global knowledge and insights we have of the category and consumers is embedded in all of our business decisions – innovation, global brand building as well as our go-to-market model – and is a competitive advantage in the markets where we operate,” said Bilbrey.

The company also announced a year of breakthrough innovation building on its recent launch of Hershey’s Spreads and Lancaster Soft Crèmes in the United States. Brookside, the popular and uniquely crafted chocolate brand that blends exotic fruit flavors from around the world, will join Hershey’s, Reese’s, Hershey’s Kisses, Jolly Rancher and Ice Breakers as the company’s sixth global brand.

The Brookside brand, which Hershey acquired in January 2012, continues to demonstrate strong growth in North America, recording net sales of approximately $200 million in 2013, up 74 percent year over year. The brand is now being tested in various international markets, and in the fourth quarter of 2014, Hershey will be introducing in the United States, Brookside Crunchy Clusters, clusters of crispy multigrains and fruit-flavored centers covered in smooth dark chocolate.

The company will continue charting a path of category expansion and product innovation with the introduction of Ice Breakers Cool Blasts Chews later this year. Ice Breakers Cool Blasts Chews are a breakthrough in refreshment innovation that are a quick dissolving chew with a unique, soft and chewy texture that provides a cool blast of instant freshness. This innovation offers quick refreshment for consumers who like the chewing experience of gum but want convenient and discreet breath freshening. With this introduction, Hershey, which has a 39 percent share of the U.S. mint category, will continue to build on its leadership position.

“Our strategies and business model are working and will support our commitment to deliver predictable and profitable growth,” continued Bilbrey. “The strength of our business coupled with our innovation in the marketplace gives us confidence that our long-term financial targets and our expectation of annual net sales growth of about five to seven percent are achievable. We believe in our ability to grow long-term adjusted earnings per share-diluted by nine to eleven percent which gives us the flexibility to invest in growing our brands and capabilities.”

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