Hershey Sweetens FY21 Outlook After Q3 Beat - Hershey (NYSE:HSY)

Hershey Co HSY reported third-quarter FY21 sales growth of 6.3% year-on-year, to $2.36 billion, beating the analyst consensus of $2.30 billion. Organic, constant currency net sales improved 4.4%.
Hershey remarked that the growth lagged consumer demand as capacity constraints and supply chain disruptions resulted in lower retailer and distributor inventory levels.
Hershey's North America segment net sales rose 5.5% Y/Y to $2.1 billion. Sales for Hershey's International and other segments increased 13.9% to $234.2 million.
The gross margin contracted 370 basis points Y/Y to 45%, and gross profit decreased 1.7% Y/Y to $1.1 billion. Adjusted gross margin was 44.3%, a decrease of 110 basis points.
The operating margin contracted 310 bps to 24.4%, and operating income for the quarter fell 6% Y/Y to $574.8 million.
Adjusted EPS of $2.10 beat the analyst consensus of $1.99.
Hershey held $675.5 million in cash and equivalents as of October 3, 2021.
Outlook: Hershey raised the FY21 adjusted EPS outlook to $6.98 - $7.11 (prior view $6.79 - $6.92) versus the consensus of $6.91.
It also raised sales growth guidance to 8% - 9% (prior 6% - 8%).
The company expects anticipated consumer demand, an improved tax outlook, and brand investment to more than offset higher supply chain costs and inflation.
Price Action: HSY shares are trading higher by 0.35% at $180.13 on the last check Thursday.