Overall, Hershey’s first quarter performance was relatively in line with expectations, with a modest impact from COVID-19. However, international sales did fall.
That’s according to The Hershey Company net sales and earnings report for the first quarter, which ended March 29, 2020.
Specifically, the company had $2.037 billion in net sales in the first quarter of 2020, up about 1 percent compared to the $2.016 billion in sales during the same period a year ago.
And Hershey’s North America net sales were $1.844 billion in the first quarter of 2020, an increase of 2.1 percent versus the same period last year.
But first-quarter 2020 net sales for Hershey’s “International and Other” segment decreased 8.1 percent, versus the same period last year, to $192.5 million. And, “International and Other” segment income decreased 20.9 percent to $16 million in the first quarter of 2020, driven by softness in China due to the impact of COVID-19, the company said.
Hershey also said retail foot traffic and takeaway have been volatile, and consumer shopping and consumption behaviors are evolving in light of social distancing protocols.
“The length and severity of the pandemic and associated changes to consumer behaviors remain uncertain,” Hershey said.
As for the rest of 2020, Hershey said that the situation with COVID-19 is evolving rapidly. And with, “the high degree of uncertainty, the company does not believe that it can estimate the full financial impacts with reasonable accuracy, and therefore believes it is prudent to withdraw fiscal 2020 full-year guidance at this time.”
Hershey also said it believes it has sufficient liquidity to satisfy its cash needs, as supported by access to bank lines of credit and an unsecured revolving credit facility.
The company reaffirms its long-term financial objectives of net sales growth in the range of 2 percent to 4 percent, and an increase in earnings per share of 6 percent to 8 percent.
Michele Buck, The Hershey Co. president and CEO, released the following statement as part of the first quarter report:
“We had a solid start to the year with our business performing as expected prior to the impact of COVID-19. Our best wishes go out to those being affected by this pandemic, and our heartfelt thanks to those working tirelessly to help us persevere through it. At Hershey, we have an opportunity to help ensure a steady food supply and create some economic stability for our employees and the farmers, suppliers and partners that rely on us. We take great pride and passion in our ability to make moments of goodness during this time when physical connection is limited. The team has demonstrated relentless energy and dedication to plan and adapt while continuing to operate safely. The situation continues to evolve rapidly, and it is difficult to predict the future with much certainty. But we have more than 125 years of experience managing through challenging, fast-moving and unprecedented moments in time. We continue to focus on making the best long-term decisions for all our key stakeholders and believe this resilience will make us stronger in the days and years ahead.”