Investors were treated to some welcome surprises when Hershey announced its latest operating results. The sweets and snack giant achieved a sharp rebound in the core U.S market during the fiscal third quarter and notched higher profit margins overall.
In a conference call with Wall Street analysts, CEO Michele Buck and her team projected further gains in both areas as Hershey looks to close out fiscal 2020. Let’s look at a few highlights from that discussion.
Achieving better balance
“We view pricing as an important part of our growth algorithm, but we are very focused and would like to drive to greater balance between price and volume,” Buck said.
Hershey’s organic sales growth jumped back into positive territory, just as management had predicted back in late July. Revenue rose 4% after falling in each of the last two quarters. Market share gains helped in the U.S. niche, where sales of baking products continued to soar while segments like mints and gums returned to growth.
Hershey got most of its boost from higher prices, though, as volume increased by less than 1%. Executives said they’re aiming for a better balance between the volume and pricing metrics over the next few quarters. “You can count on seeing volume being a more important part of the algorithm next year,” Buck predicted.
