HERSHEY, PA. — Income for The Hershey Co. was up 45% for the year ended Dec. 31 thanks in part to a focus on core brands.
For the full year, Hershey had an income of $311,405,000, equal to $1.41 per share on the common stock, which compared with $214,154,000, equal to 96c per share, during the previous year. Sales for the year were $5,132,768,000, up 4% from $4,946,716,000 during the previous year.
"The financial market and credit crisis has not had a material effect on our business operations or liquidity to date," said David J. West, president and chief executive officer. "However, the increase in our cost structure and uncertainties in the financial markets and in the broader economy present challenges as we head into 2009. Despite these issues, we'll continue to invest in our core brands in the U.S. and key international markets to build on our momentum. Specifically, advertising is expected to increase $30 million to $35 million . . . These cost increases will be more than offset by higher net pricing, savings from the Global Supply Chain Transformation program and ongoing operating productivity improvement."
For the fourth quarter the company had an income of $82,155,000, equal to 37c per share, up 51% from $54,343,000, equal to 24c per share, during the same quarter of the previous year. Sales for the quarter were $1,377,380,000, up 3% from $1,342,222,000 during the same quarter of the previous year.
"Hershey's strong fourth-quarter results represent a solid end to the year and further validate our strategy of focusing investment on core brands," Mr. West said. "Net sales increased by 2.6% driven primarily by pricing, offset somewhat by the impact of unfavorable foreign currency exchange rates and sales volume declines primarily in the U.S. The results were also dampened by the shift of about 2 percentage points of net sales growth in the fourth quarter due to the timing of a buy-in related to the August price increase. Core brand strength was attributable to increased advertising and retail effectiveness."
Mr. West said in 2009 the company expects net sales growth of 2% to 3% as pricing actions and core brand sales growth will be offset partially by lower volumes and the impact of unfavorable foreign currency exchange rates.