HERSHEY, PA. – Halloween and holiday confectionery sales supported The Hershey Co.’s performance during the third quarter of fiscal 2018. The results prompted management to reaffirm its sales and earnings guidance for the rest of the fiscal year.

“Overall, I am pleased with the progress we are making against our key strategic focus areas,” said Michele G. Buck, president and chief executive officer, Oct. 25 during a conference call with financial analysts. “Our third-quarter results were in line with expectations, and we remain on track to achieve the financial targets we shared earlier this year. Our U.S. core confection retail takeaway and share trends are sequentially improving, in line with our expectations, driven by strong Halloween results and distribution gains on core items.”

Ms. Buck added the company is focused on executing a strong finish to the Halloween season and that the company is on pace to achieve $600 million in sales for the period.

“As expected, this Halloween strength and other key initiatives are driving sequentially improved retail takeaway and market share performance on our core confection business,” she said. “In measured channels, for the last 12 weeks ending Oct. 14, Hershey's C.M.G. (chocolate, mint, gum) takeaway increased 0.4% versus the prior year period, resulting in flat market share. In the latest four weeks, Hershey's C.M.G. takeaway grew 2.5%, resulting in a market share gain of 22 basis points with improvements across classes of trade.”

Amplify snacks, HersheyBeyond confectionery, Ms. Buck said Amplify Snack Brands products continue to develop both distribution and velocity gains.

“In measured channels, retail takeaway grew 10.3% in the latest 12 weeks ending Oct. 7,” she said. “This was driven by core Skinny Pop ready-to-eat popcorn, which grew over 8%, resulting in a category share gain of 1 full point.”

Hershey Co. net income for the quarter was $263.7 million, equal to $1.29 per share on the common stock and lower when compared to the same period of the previous year when the company earned $273.3 million, equal to $1.32 per share.

Sales for the quarter ticked up to $2,079.6 million, a 2.3% increase compared to the third quarter of fiscal 2017.

“We are reaffirming our full-year net sales and adjusted e.p.s. outlook,” said Patricia A. Little, chief financial officer. “We expect reported net sales to be at the low end of the 3.5% to 5.5% range, with approximately a 3.5-point net benefit from acquisitions and divestitures. We continue to expect organic net sales growth to be slightly up versus (the) prior yeaPirates Booty snacks, Hersheyr.”

Ms. Little added diluted e.p.s. is expected to be in a range of $5.33 to $5.43 and the recent acquisition of the Pirate Brands business from B&G Foods, Inc., Parsippany, N.J., will be minimal to 2018 results.

Management will not issue financial guidance for fiscal 2019 until January, but Ms. Buck highlighted several initiatives to be put in place next year.

“Our investments in U.S. manufacturing capacity expansion are on track,” she said. “Over the last year, we have invested more than $150 million in U.S. supply chain advancements. The Kit Kat line in Hazleton, Pa., announced earlier this spring, is expected to be completed by year-end and will start benefiting us in Q1 2019. Additionally, our expansion on Ice Breakers Gum and our Midwest distribution center are also on track and expected to be complete in the next three to six months.”

Ms. Buck said the company’s digital strategy is contributing positively.

“We are increasing trips online,” she said. “We are trading consumers up to higher price points, and we are driving larger basket sizes while maintaining our margin profile. Our digital commerce net sales for the quarter were up over 60%, and our market share increased 180 basis points. We believe we have the right strategy, organizational focus, talent and technology to accelerate growth as industry infrastructure continues to expand.”

Reese's Thins

Innovation on tap for the coming year will include the introduction of Reese’s Thins.

“This product is about 40% thinner than the original cup, and it appeals to those consumers who want something sweet with more permissibility,” Ms. Buck said. “They will be available in individually-wrapped pieces in both milk and dark chocolate varieties in our newly redesigned take-home bags.”