Hershey Foods misses by $0.04, reports revs in-line; guides FY18 EPS above consensus (110.33)
- Reports Q4 (Dec) earnings of $1.03 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus of $1.07; revenues fell 1.5% year/year to $1.94 bln vs the $1.96 bln Capital IQ Consensus.
- Co issues upside guidance for FY18, sees EPS of $5.33-5.43, excluding non-recurring items, vs. $5.27 Capital IQ Consensus Estimate.
- Reported gross margin of 43.0% represented an increase of 530 basis points versus the fourth quarter of 2016, while reported operating profit of $328.3 million in the fourth quarter of 2017 resulted in operating margin of 16.9%.
- Hershey's North America net sales were $1,674.6 million in the fourth quarter of 2017, a decline of 0.9% versus the same period last year, including a 0.4 point benefit from foreign currency translation.
- Co states, "In 2018, the company estimates net sales to increase 5% to 7%. Organic net sales are expected to increase in the range of slightly up to around 2% versus last year. This is lower than our long-term target primarily due to a shorter Easter season versus 2017 and the previously mentioned SKU optimization initiative. Additionally, the acquisition of Amplify will be about a 5 point benefit and foreign currency exchange is expected to be negligible.
In 2018, we estimate adjusted gross margin will be about the same as last year... The anticipated impacts of the lower tax rate and brand building reinvestment are included in the 2018 outlook. As a result, the company estimates the 2018 full year increase in adjusted earnings per share-diluted to be in the $5.33 to $5.43 range, or an increase of 12% to 14%."