Hershey Co.'s first-quarter profit nearly doubled on Thursday, as increased advertising and an earlier Easter sparked candy and chocolate purchases.
The maker of Hershey's Kisses and Reese's peanut butter cups also boosted its 2010 adjusted earnings and sales growth targets.
While industry competitors have concentrated on consolidating, Hershey has been aggressively expanding its marketing to add sales. The company based in Hershey, Pa. plans to increase its 2010 advertising spending by 35 percent to 40 percent, an uptick from its prior estimate of 25 percent to 30 percent.
While it recently lost out to Kraft Foods Inc. in the bidding for British rival Cadbury PLC, many experts did not view this as bad for Hershey because they feared the acquisition would have unwisely stretched the company's finances.
Hershey, the nation's second-largest candy maker, earned $147.4 million, or 64 cents per share, for the period ended April 4. That's well above its profit of $75.9 million, or 33 cents per share, a year earlier.
Revenue grew 14 percent to $1.41 billion from $1.24 billion. U.S. sales benefited from Easter occurring a week earlier than last year, so more sales fell in the first quarter. Also, a 68 percent boost in domestic advertising for core brands such as Kit Kat, Twizzlers and its namesake candy as well as new product promotions for Hershey's Special Dark, Almond Joy and York Pieces helped spur sales.
The quarterly performance easily surpassed Wall Street's forecasts, as analysts polled by Thomson Reuters expected earnings of 47 cents per share on revenue of $1.29 billion.
Hershey now expects full-year adjusted earnings to rise in the low to mid-teens. Its prior guidance called for a 6 percent to 8 percent rise. The candy maker also anticipates better revenue for 2010, projecting its sales will rise at least 6 percent compared with a previous outlook for 3 percent to 5 percent growth.
Analysts forecast a full-year profit of $2.33 per share on revenue of $5.5 billion.
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