Hershey’s half year report is long and detailed, and contains a lot of information not directed more towards investors, or the non-chocolate market. We have only shown parts of the press release which we think are relevant to the Cocoa/Chocolate industry.

Like the other chocolate companies issuing their half year financial statements, Hershey made more money than before with a significant boost on sales that was only partially dulled by increased costs.

Unlike Mondelēz, who are cautious about the future, Hershey CEO Michele Buck is optimistic in her outlook. This appears to corroborate the view among big Chocolate companies, that consumers are willing to pay more as a result of inflation. A position which runs contrary to the reasons they had been citing in previous years for not increasing prices paid for Cocoa.

The Board voted to increase the company’s dividend by a generous 15%, a full 50% bigger increase than Mondelēz.

Second-Quarter 2022 Financial Results Summary 1

  • Consolidated net sales of $2,372.6 million, an increase of 19.3%.
  • Organic, constant currency net sales increased 14.1%.
  • The impact of acquisitions on net sales was a 5.3-point benefitwhile foreign currency exchange was a 0.1-point headwind.
  • Reported net income of $315.6 million and $1.53 earnings per share-diluted, an increase of 5.5%.
  • Adjusted earnings per share-diluted of $1.80, an increase of 22.4%.

1All comparisons for the second quarter of 2022 are with respect to the second quarter ended July 4, 2021
2Reflects the impact from the 2021 acquisitions of Pretzels Inc. (Pretzels), Dot’s Pretzels, LLC (Dot’s) and Lilys Sweets, LLC (Lily’s)

Our business momentum continued in the second quarter, with double-digit sales growth in each of our segments resulting in strong earnings per share performance.

These results reflect the strength and resilience of our categories, consumers’ love for our brands, the investments we are making in our business, and the exceptional execution of our dedicated employees.  We are raising our financial expectations for the year and investing more heavily in our brands, capabilities and people in the second half to continue this momentum into 2023.

Michele Buck, Hershey Company President and Chief Executive Officer

2022 Full-Year Financial Outlook

The Hershey Company is increasing its net sales outlook to reflect continued strength in consumer demand and net price realization.  Price elasticities are expected to moderate from the second quarter, but remain favorable to historical levels, as inflation and fewer government benefits are expected to weaken consumers’ buying power. 

Profit from increased sales growth is expected to more than offset higher supply chain costs, elevated advertising and merchandising levels and increased incentive compensation costs, to deliver higher reported and adjusted earnings per share growth.

To reflect this strength in performance and expectations for the second half of the year, the company is raising its full-year financial outlook to the following: 

2022 Full-Year OutlookPrior GuidanceCurrent Guidance
Net sales growth310% – 12%12% – 14%
Reported earnings per share growth8% – 11%9% – 12%
Adjusted earnings per share growth10% – 12%12% – 14%
Source: Hershey Press Release

North America Confectionery

Hershey’s North America Confectionery segment net sales were $1,909.1 million in the second quarter of 2022, an increase of 12.9% versus the same period last year.  Excluding the 0.8-point benefit from the acquisition of Lily’s and a 0.3-point headwind from foreign currency exchange, organic, constant currency net sales increased 12.4%.  Net price realization was a 9.8-point benefit driven by list price increases as well as a lower level of promotional activity in response to capacity constraints.  Volume drove an additional 2.6-point benefit driven by the replenishment of distributor inventory levels, which contributed approximately 6.0 points to net sales growth and was partially offset by price elasticities.

Hershey’s U.S. candy, mint and gum (CMG) retail takeaway for the 12-week period ended July 17, 2022 in the multi-outlet plus convenience store channels (MULO+C) increased 5.0%.  Consumer demand and unit velocities remained steady with strength in take-home chocolate and sweets, while growth in unit pricing drove year-over-year gains.  Hershey’s take-home chocolate increased 6.6% in the latest period as at-home consumption remained strong and above pre-pandemic levels.  Momentum of Hershey’s sweets brands continued with retail takeaway of 7.7%, driven by Jolly Rancher Gummies and Twizzlers summer programming.  Hershey’s CMG share declined 54 basis points as production and on-shelf availability of certain products remained constrained and promotional levels were reduced to enable inventory replenishment.  Declines were in line with expectations and an improvement from the first quarter as on-shelf availability increased.  Hershey’s confectionery share remains 83 basis points higher than pre-pandemic levels.

The North America Confectionery segment reported segment income of $618.9 million in the second quarter of 2022, reflecting an increase of 11.6% versus the prior-year period.  The increase in segment income was driven by pricing and volume gains, which were partially offset by higher supply chain costs, increased acquisition costs related to Lily’s, higher capability and technology investments and increased trade show and travel expenses as the prior-year period was impacted by pandemic-related restrictions.  The aforementioned costs outpaced sales growth in the second quarter, resulting in segment margin of 32.4%, a decrease of 40 basis points. 


Second-quarter 2022 net sales for Hershey’s International segment increased 21.3% versus the same period last year to $207.2 million.  Excluding a 0.7-point benefit from foreign currency exchange rates, constant currency net sales increased 20.6%.  Volume gains contributed 17.6 points to net sales growth, driven by the strong consumer buying power and demand across markets.  Price realization was a 3.0-point benefit.

The International segment reported a $30.7 million profit in the second quarter of 2022, reflecting an increase of $3.1 million versus the prior-year period.  The profit increase was driven by volume gains and net price realization, which were partially offset by higher supply chain cost inflation and logistics costs, as well as increased advertising investment, salary and benefit inflation and increased travel expenses.  The aforementioned costs outpaced sales growth in the second quarter, resulting in segment margin of 14.8%, a decrease of 130 basis points.

Dividend Increase

The Board of Directors of The Hershey Company declared a quarterly dividend of $1.036 on the Common Stock and $0.942 on the Class B Common Stock, payable September 15, 2022, to shareholders of record as of August 19, 2022, representing an increase of 15%, or $0.135 and $0.123 per share, respectively.  It is the 371st consecutive regular dividend on the Common Stock and the 152nd consecutive regular dividend on the Class B Common Stock.

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