The Hershey Company is best known as one of the largest chocolate conglomerates in the world, founded in 1894 by Milton S. Hershey. The chocolate candies under the company include Hershey’s Kisses, Reese’s, Kit Kat, Whoppers, Cadbury, etc. In addition, the company also manufactures and sells a wide range of products, including baking products (chips, baking bars), snacks (Skinny Pop Popcorn, Paqui chips, ONE protein bar, Lily’s unprocessed candy, etc.) and syrups, spreads and toppings. On top of all that, the company also built HersheyPark, which offers tons of fun (and comes with tons of perks like free breakfast and park passes, resort benefits, extra cash bonuses, etc.) for tourists and local visitors, including water. park attractions, ZooAmerica and Hershey’s Chocolatetown. All of this has made Hershey the successful company it is today.
Hershey has manufacturing facilities both locally in the US and overseas, specifically in Brazil, Mexico, Canada, India and Malaysia. She recently announced that the company is going to to expand its Mexican plant where production is expected to increase by 25%. Historically, the company has proven resistant growth even in the midst of major crises, from the 1918 flu pandemic, the Great Depression, two world wars and the recent Covid-19 pandemic and economic recession. Taking Covid-19 as an example, a studies showed that more and more people tend to buy comfort food, such as chocolate and candy, as an escape from increased stress levels during a stressful period.
Management expressed concern about its sales in the initial phase of the pandemic outbreak, but statistics proved them wrong. As Figure 1 shows, the company’s net sales have plummeted 8 billion dollars by the end 2020and still increased almost 9 billion dollars in 2021. Its net profit for the year was 1.478 billion dollarsup 15.55% from 2020.
The Hershey Company made a big jump in 2021 in both revenue and earnings per share (EPS). Its annual sales increased last year +11.11% from the previous year and +15.38% three years ago. Coming into 2022, the company continued to make better progress, with sales growing in Q1 and Q2 2.7 billion dollars and 2.4 billion dollarsboth higher than consensus estimates.
Its EPS is generally in line with market expectations. In 2021, the company’s EPS stood at $7.19up +14.31% from the previous year and +34.14% three years ago. In 2022, it achieved EPS for both Q1 and Q2 $2.53 and $1.80 in that order, it also beat analysts’ expectations.
The company is to announce it Q3 financial results on 27Thursday October. The general forecast for sales and EPS they are 2.6 billion dollars and $2.10, respectively. Sentiment remains upbeat. His strategy effectiveness in product marketing, price, placement, and distribution, as well as promotion and advertising, play a major role in improving Hershey’s global competitiveness as well as achieving its goals and vision.
According to Zacks’ findings, Hershey has done a better job in its financials compared to its industry. This year, its growth rate has reached 14.35%, which is higher than its industry (11.70%) and the S&P 500 (8.62%). Based on this result, Zacks ranks the company at #2 (Buy).
#Hershey (ŘL.s) share price has traded in a strong bullish trend since gaining support in May 2018, with the lowest print remaining at $89.01. To date, the total gains are over 150%. After Q1/2022, the company’s share price was consolidated in a range. The lowest level reached 19Thursday May, in $201.30before rebounding to a peak of 24Thursday August in $234.44. This price together with $231.90 it forms the nearest resistance zone, behind which it follows $241.40 and 254 dollars. You can find the nearest support at 221 dollars. A break of this level could mean that the bears will continue to test minor support at $231.50then the lows of the consolidated zone at $201.30.
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