Chocolate company Hershey’s (HSY) reported a 11% rise in third-quarter earnings on Thursday helped by increases in sales, increased profit margins and cost control.
The maker of Hershey’s Kisses and Reese’s Peanut Butter Cups said it earned $180.2 million, or 78 cents a share, compared with $162 million, or 71 cents, a year earlier. Excluding one-time items, Hershey said it earned 79 cents a share on sales of $1.55 billion.
Hershey’s business has been backed into a corner in recent months as some of its rivals have been eaten up by larger competitors. Kraft purchased British chocolatier Cadbury and more than a year ago privately-held Mars bought gum maker Wrigley.
While Hershey’s business seems to be doing relatively well, it’s quarterly gross margin rose to 42.4% from 39.7% a year ago, it continues to struggle in the growing international markets that its competitors are already entrenched in.
Hershey, like other food manufacturers, is also facing rising commodities prices across many of its products.
“While global economic uncertainty and challenges persist, confectionery remains one of the better-performing snack categories,” said David West, President and CEO of Hershey, in a statement. “In the third quarter [sales were] driven primarily by U.S. core brand volume growth, including new products, and growth in our emerging market businesses, which continues to increase at rates greater than the Company’s overall long-term target.”
Hershey also boosted its 2010 earnings forecast to $2.52 to $2.56 a share from $2.47 to $2.52.
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