Market Overview

Hershey Chocolate Melts Analyst Expectations


With Easter came great success for chocolate makers, as Hershey (NYSE: HSY) reported upside results on its 1Q12 earnings call today and Kraft's (NYSE: KFT) volume trends strengthened over the last three months.

HSY sales climbed to $1.73B, up 10.7% for the quarter thanks to a certain bunny dropping yummy treats across the country throughout April. Hershey's EVP and COO, JP Bilbrey, said that much of the company's growth was primarily driven by pricing, which resulted in a strong performance on a daily basis - especially around Easter.

It is not only management that is pleased with the results on today's call. Morgan Stanley expects the strength of the report to generate a positive reaction, while Citi says Hershey's is off to an outstanding start to the year, as earnings were ahead of consensus.

As for the future, management remained humble in their projections.

"Management only raised full year EPS guidance by +3c, but it appears to be conservative. We continue to believe Hershey has very strong gains in store for 2012 and reiterate that Hershey is one our favorite names in packaged food," Citi said in a research report this morning.

However, despite analysts tending to see the guidance as conservative, no price target or rating changes were made today.

The same can be said for Kraft, as the company has recently experienced fantastic chocolate sales (up +11.9%) in the U.S. and Europe, but has since seen no positive changes from research firms as of late.

While research firms remain positive on both KFT and HSY, America's sweet tooth continues to crave its sugary counterpart. HSY is set to outperform in the market today thanks to its exceptionally strong quarter.

HSY is currently trading at $66.64, up +7.87% YTD, while KFT is currently trading at $38.45, up +2.86% YTD.

Posted-In: Citi JP BilbreyAnalyst Color News Retail Sales Topics Analyst Ratings General Best of Benzinga


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