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Hershey(HSY) - 2024 Q3 - Quarterly Results
HSYHershey(HSY)2024-11-07 11:50
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Financial Performance - Consolidated net sales for Q3 2024 were 2,987.5million,adecreaseof1.42,987.5 million, a decrease of 1.4% compared to the same period last year[9]. - Reported net income was 446.3 million, or 2.20perdilutedshare,reflectingadecreaseof12.72.20 per diluted share, reflecting a decrease of 12.7%[3]. - Adjusted earnings per share-diluted were 2.34, down 10.0% year-over-year[3]. - The company reduced its full-year net sales growth outlook from approximately 2% to flat, and adjusted earnings per share growth outlook to down mid-single-digits[6]. - Total net sales for Q3 2024 were 2.9875billion,aslightdecreasefrom2.9875 billion, a slight decrease from 3.0300 billion in Q3 2023[42]. - For Q3 2024, reported net income was 446.3million,downfrom446.3 million, down from 518.6 million in Q3 2023, representing a decrease of 13.9%[42]. - Total segment income decreased by 15.3% to 793,006inQ32024from793,006 in Q3 2024 from 936,546 in Q3 2023, with North America Confectionery segment income down 14.5% to 724,822[44].−Internationalsegmentincomefellsignificantlyby55.2724,822[44]. - International segment income fell significantly by 55.2% to 14,207 in Q3 2024 compared to 31,688inQ32023[44].−OperatingprofitforQ32024was31,688 in Q3 2023[44]. - Operating profit for Q3 2024 was 613,164, a decrease of 16.7% from 735,949inQ32023[44].−Thecompanyreporteda20.6735,949 in Q3 2023[44]. - The company reported a 20.6% decline in income before income taxes, totaling 518,747 in Q3 2024 compared to 653,413inQ32023[44].SegmentPerformance−NorthAmericaConfectionerysegmentnetsalesincreasedby0.8653,413 in Q3 2023[44]. Segment Performance - North America Confectionery segment net sales increased by 0.8% to 2,477.3 million, while North America Salty Snacks segment net sales decreased by 15.5% to 291.8million[17][20].−NorthAmericaConfectionerynetsalesforQ32024were291.8 million[17][20]. - North America Confectionery net sales for Q3 2024 were 2,477,303, a 0.8% increase from 2,457,647inQ32023,whileSaltySnackssawadeclineof15.52,457,647 in Q3 2023, while Salty Snacks saw a decline of 15.5% to 291,835 from 345,182[44].−Internationalsegmentnetsalesdecreasedby3.9345,182[44]. - International segment net sales decreased by 3.9% to 218.4 million, with a segment margin of 6.5%, down 740 basis points year-over-year[23][24]. Cost and Expenses - Reported gross margin was 41.3%, a decrease of 360 basis points from the prior year, driven by higher commodity costs[10]. - Selling, marketing, and administrative expenses decreased by 5.2% in Q3 2024 compared to Q3 2023[11]. - Unallocated corporate expenses decreased by 24.1% to 139.0million,drivenbylowercompensationandbenefitcosts[25].−Non−GAAPgrossprofitforQ32024was139.0 million, driven by lower compensation and benefit costs[25]. - Non-GAAP gross profit for Q3 2024 was 1.2048 billion, compared to 1.3615billioninQ32023,reflectingadeclineof11.51.3615 billion in Q3 2023, reflecting a decline of 11.5%[30]. - The reported gross margin for Q3 2024 was 41.3%, down from 44.9% in Q3 2023[33]. - Non-GAAP operating profit margin decreased to 21.9% in Q3 2024 from 24.9% in Q3 2023[33]. - The company incurred 27.6 million in business realignment costs during Q3 2024, primarily related to restructuring efforts[36]. - Integration-related costs for acquisitions in Q3 2024 amounted to 22.8million,includingcostsfortwomanufacturingplantsfromWeaverPopcornManufacturing[37].TaxandInterest−TheeffectivetaxrateforQ32024was14.022.8 million, including costs for two manufacturing plants from Weaver Popcorn Manufacturing[37]. Tax and Interest - The effective tax rate for Q3 2024 was 14.0%, a decrease of 660 basis points from the previous year[13]. - The effective tax rate for Q3 2024 was reported at 14.0%, down from 20.6% in Q3 2023[33]. - Interest expense increased by 11.5% to 44,316 in Q3 2024 from 39,755inQ32023[44].BalanceSheet−Totalassetsincreasedto39,755 in Q3 2023[44]. Balance Sheet - Total assets increased to 12,621,410 as of September 29, 2024, up from 11,902,941attheendof2023[46].−Cashandcashequivalentsroseto11,902,941 at the end of 2023[46]. - Cash and cash equivalents rose to 614,951 in Q3 2024 from 401,902attheendof2023,indicatingimprovedliquidity[46].−Totalliabilitiesincreasedto401,902 at the end of 2023, indicating improved liquidity[46]. - Total liabilities increased to 8,416,441 as of September 29, 2024, compared to $7,803,855 at the end of 2023[46]. Future Outlook - The company expects continued challenges in supply chain efficiency and raw material costs impacting future performance[40].