Hershey’s stock surges after profit and sales beats, as consumers ‘reach for small treats’ during the pandemic

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Shares of Hershey Co. surged 2.8% in premarket trading Friday, after the chocolate and confectionery products company reported third-quarter profit and revenue that rose above expectations, and provided an upbeat full-year outlook. “Our core U.S. business remains healthy as consumers reach for small treats during the pandemic, and our decision to lean into Halloween ahead of the season supported consumers’ desire to find new and creative ways to celebrate safely,” said Chief Executive Michele Buck. Net income rose to $447.3 million, or $2.14 a share, from $325.3 million, or $1.54 a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share came to $1.86, above the FactSet consensus of $1.74. Revenue rose 4.0% to $2.22 billion, just above the FactSet consensus of $2.18 billion, as price realization provided a 2.9 percentage point benefit and volume growth was a 90 basis point benefit. Gross margin improved to 48.7% from 44.2% last year. The company reinstated its 2020 earnings guidance, after withdrawing it in April because of the uncertain effects of the COVID-19 pandemic. The company now expects 2020 adjusted EPS of $6.18 to $6.24, above the FactSet consensus of $6.05. The stock has slipped 1.6% year to date through Thursday, while the S&P 500 has advanced 8.7%.
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