Hershey(HSY) ZACKS·2024-11-07 18:05Core Viewpoint - The Hershey Company reported disappointing third-quarter 2024 results, with both earnings and net sales declining year over year, missing consensus estimates. The company is facing challenges from a tough consumer environment and high cocoa prices, leading to a revised outlook for the year with lowered expectations for net sales growth and adjusted earnings per share [1][14]. Financial Performance - Adjusted earnings for the quarter were 2.50 [2]. - Consolidated net sales were 3,073.1 million. On a constant-currency basis, organic sales decreased by 1%, with a net price increase of nearly 2 points offset by lower volume across segments [3]. - The adjusted gross margin contracted to 40.3%, a decrease of 460 basis points, primarily due to increased commodity costs and unfavorable timing of input costs [4]. Cost Management - Selling, marketing, and administrative (SM&A) expenses decreased by 5.2%, attributed to lower advertising and consumer marketing expenses, reduced compensation, and fewer investments in technology [5]. - Excluding advertising and consumer marketing expenses, SM&A expenses dropped 7.5% due to lower compensation and benefit costs [6]. Segment Performance - The North America Confectionery segment reported net sales of 291.8 million, with volume decreases largely due to planned inventory increases and shipment delays [10]. - The International segment's net sales were 9.00-9.59 in 2023 [14]. - The company plans capital expenditures of 600 million for 2024, focusing on core confection capacity expansion and digital infrastructure investments [13].