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Hershey Boasts Winning Second Quarter, Drops Premium Lines
Posted By master On July 23, 2009 12:00 AM In | No Comments
Hershey, PA — Pointing to its commitment to core brands and heavy support of them through advertising, The Hershey Co. revealed a 5.9 percent net sales increase for the second quarter 2009.
President and CEO David West said advertising increased 46 percent during the period, with emphasis on the Easter selling season, core products and the company's annual S'mores promotion in partnership with Kraft Foods, Inc.
“Where we have focused resources, particularly in the food and convenience channels, results have exceeded our expectations. In convenience, Hershey outpaced category retail takeaway for 11 consecutive four-week periods. In the second quarter, convenience store retail takeaway was up mid-single digits.”
In light of the economy, however, in which consumers are said to be shifting away from higher-end purchases - including candy - West said Hershey will shed premium brands Starbucks and Cacao Reserve in the coming months.
“During these challenging times,” he explained, “consumers continue to turn to the brands they know and love, such as Hershey's, Hershey's Kisses, Reese's and Kit Kat. Our recent performance shows the value and quality our brands offer to consumers and the opportunity that continues to exist.”
West said he is confident the company is well-positioned to continue this growth through the end of 2009.
“We expect consumers to see markedly higher promoted price points in the Halloween and Holiday seasons, which represent approximately one-third of our U.S. revenues in the second half of the year.”
Overall, West indicated he expects full year net sales growth to be within Hershey's stated objective of three to five percent.
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