Hershey Raising The Bar With Solid Q1 Beat; Eyes High-End Of FY23 Outlook

Hershey Co HSY reported first-quarter FY23 sales growth of 12.1% increase year-on-year to $2.98 billion, beating the consensus of $2.91 billion.
Hershey's North America Confectionery segment net sales rose 10.6% Y/Y to $2.452 billion. Sales for Hershey's International segment increased 19% to $265.5 million.
Gross margin contracted 40 basis points Y/Y to 46.3%, and gross profit rose 11% Y/Y to $1.38 billion.
Operating margin contracted 20 basis points to 26.8%, and the operating income for the quarter was $799.9 million.
Adjusted EPS of $2.96 beat the analyst consensus of $2.66.
Hershey held $460.3 million in cash and equivalents as of April 2, 2023.
"We had a great start to the year as our increased investments in the business and strong execution delivered resilient consumer demand and drove double digit sales and earnings growth in the quarter," said President and CEO Michele Buck.
The company's Board declared quarterly dividends of $1.036 on the common stock and $0.942 on the Class B common stock, payable June 15, 2023, to stockholders of record as of May 19, 2023.
Outlook: The company is raising its net sales growth and EPS outlook for the year to the high end of its previous range.
Hershey sees FY23 net sales growth of about 8% (prior view 6%-8%) and adjusted EPS growth of about 11% to $9.46 (prior view 9%-11%) against the consensus of $9.42.
Price Action: HSY shares traded higher by 2.86% at $269.23 on the last check Thursday.

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