HERSHEY, PA. — Lower sales and the impact of higher dairy costs were factors contributing to a 66% drop in net income during the third quarter for The Hershey Co.
For the quarter ended Sept. 30, net income was $62,784,000, equal to 28c per share on the common stock, compared with $185,121,000, equal to 81c per share, during the same quarter of 2006.
Net sales were down 1% to $1,399,469,000 compared with $1,416,202,000 during the same quarter of the previous year.
"Throughout 2007, our top priority has been to restore momentum within the U.S.," said Richard H. Lenny, chairman and chief executive officer. "Against a backdrop of severe commodity cost pressures and strong competitive activity, we’re maintaining this focus. In the third quarter we experienced improvements in key aspects of our portfolio. Importantly, our seasonal programs got off to a solid start, and increased consumer investment resulted in a 3.5% gain in U.S. retail takeaway with improvements occurring in all classes of trade."
Mr. Lenny recently announced he will retire at the end of 2007.
For the nine months ended Sept. 30, net income was $159,811,000, down 61% from $405,489,000 during the same period of 2006. Net sales were $3,604,494,000, down from $3,607,621,000 during the same quarter of the previous year.
"In 2008, we’ll build on recent marketplace momentum in core chocolate as we broaden our participation in the premium segment . . . We’ll support our premium initiatives as well as continued investment behind our core brands, global expansion, and our retail sales force, with savings generated from our Global Supply Chain Transformation," said President David J. West. "In addition, we are evaluating alternatives to improve our consumer and customer value propositions throughout the entire portfolio."
Mr. West will be taking over for Mr. Lenny.