Hershey: Reports Q4 and Full-Year 2020 Financial Results

Hershey / PA. (thc) The Hershey Company announced net sales and earnings for the fourth quarter and full year ended December 31, 2020. «2020 was a year of unexpected challenges and hardship, but also one that brought opportunity, resilience and compassion. We are proud to be an important part of comfort and connection in people’s lives. Our portfolio of beloved brands remains extremely relevant with consumers, and our dedicated team, advantaged capabilities and operational excellence allowed us to help create many moments of goodness for them during these unprecedented times,» said Michele Buck, The Hershey Company President and Chief Executive Officer. «We delivered a strong quarter with continued share gains and volume growth to finish the year. While the impact of key external factors on our business remains uncertain, we have good momentum going into 2021 with visibility into a strong start to the year. We anticipate we will deliver another year of balanced sales and earnings growth in 2021.»

Fourth-Quarter 2020 Financial Results Summary(1)

• Consolidated net sales of USD 2,185.2 million, an increase of 5.7 percent.
• Organic, constant currency net sales increased 6.3 percent.
• The impact of divestitures on net sales was a 0.2 point headwind(2) while foreign currency exchange was a 0.4 point headwind.
• Reported net income of USD 291.4 million, or USD 1.39 per share-diluted, an increase of 41.8 percent.
• Adjusted earnings per share-diluted of USD 1.49, an increase of 16.4 percent.

(1) All comparisons for the fourth quarter of 2020 are with respect to the fourth quarter ended December 31, 2019
(2) Reflects the 2020 divestitures of KRAVE Pure Foods, Inc. (Krave) and the Scharffen Berger and Dagoba brands

2020 Full-Year Financial Results Summary(3)

• Consolidated net sales of USD 8,149.7 million, an increase of 2.0 percent.
• Organic, constant currency net sales increased 2.0 percent.
• The net impact of acquisitions and divestitures on net sales was a 0.5 point benefit(4), while foreign currency exchange was a 0.5 point headwind.
• Reported net income of USD 1,278.7 million, or USD 6.11 per share-diluted, an increase of 11.9 percent.
• Adjusted earnings per share-diluted of USD 6.29, an increase of 8.8 percent.

(3) All comparisons for full year 2020 are with respect to the full year ended December 31, 2019
(4) Reflects the impact from the 2019 acquisition of ONE Brands, LLC, partially offset by the 2020 divestitures of Krave and the Scharffen Berger and Dagoba brands

2021 Full-Year Financial Outlook Summary

• The company’s 2021 outlook is provided in the context of greater than usual volatility associated with the Covid-19 pandemic.
  For 2021, the company expects performance in line with its long-term growth algorithm of 2-4 percent net sales growth and 6-8 percent earnings per share growth.
• In the North America segment, the company expects recent performance and momentum to continue into the first quarter of 2021 due to sustained elevated sales of take home and seasonal chocolate as well as additional marketplace share gains. Second quarter and second half results are expected to moderate given strong 2020 performance. In the International and Other segment, the company expects stabilizing sales trends across most markets, however the pace and magnitude of recovery remains uncertain.
• Sales growth and modest gross margin expansion are expected to enable business reinvestment while resulting in solid adjusted earnings per share growth.

The company also expects

• Interest expense of approximately USD 130 million; and
• Capital expenditures of approximately USD 550 million, driven by key initiatives including the company’s ongoing ERP transformation and supply chain initiatives.

For additional information please refer to the company’s news release (PDF | 191 KB):

20210205-HERSHEY-Q4-2020.