Hershey Q2: EPS Beat, Dividend Boost, Solid Consumer Demand & More

Hershey Co HSY reported second-quarter FY23 sales growth of 5% year-on-year to $2.49 billion, marginally missing the consensus of $2.50 billion.

Hershey's North America Confectionery segment net sales rose 4.4% Y/Y to $1.993 billion. Sales for Hershey's International segment increased 8.5% to $224.8 million.

Gross margin expanded 340 basis points Y/Y to 45.5%, and gross profit rose 13.2% Y/Y to $1.13 billion.

Operating margin expanded 330 basis points to 22.5%, and the operating income for the quarter was $560.7 million.

Adjusted EPS of $2.01 beat the analyst consensus of $1.91.

Hershey held $446.2 million in cash and equivalents as of July 2, 2023.

"Our categories continue to perform well as consumer demand for great tasting snacks remains resilient across the globe," said President and CEO Michele Buck.

The company's Board announced quarterly dividends of $1.192 on the Common Stock and $1.083 on the Class B Common Stock, an increase of 15% or $0.156 and $0.141 per share, respectively. The dividends are payable September 15, 2023, to stockholders of record as of August 18, 2023.

Outlook: Hershey raised its FY23 adjusted EPS growth outlook from $9.46 to $9.46-$9.54 versus an estimate of $9.51.

HSY continues to see FY23 net sales growth of 8% and expects capital expenditures of approximately $800 million-$850 million.

Price Action: HSY shares traded lower by 1.59% at $236.63 on the last check Thursday.