Food Business News - August 7, 2018 - 26
AMPLIFY SNACK BRANDS
Management seeks M.&A. targets in the United States
HERSHEY, PA. - The Hershey Co. benefited
from its acquisition of Amplify Snack
Brands earlier this year during the second
quarter of fiscal 2018. The company's sales
rose 5.6% during the quarter ended July 1.
"Hershey snacking sales grew 0.3%
for the 12 weeks ending July 15, driven by
strong Amplify growth," said Michele
Gross Buck, president and chief executive officer, during a July 26 conference
call to discuss quarterly results. "Skinny
Pop, ready-to-eat popcorn, grew 8.3%
during the same time frame, gaining 1.2
points of marketplace share.
"This growth was balanced across
class of trade and driven by gains in both
household penetration and purchase
frequency. The category remains healthy
with growth of approximately 4% yearto-date. We have good visibility into
second-half plans and expect both Skinny Pop and ready-to-eat popcorn category
strength to sustain as we move throughout the year. Our expansion to participate
in broader snacking will continue to be
an important lever in our growth."
Confectionery category growth was
0.6% in measured channels during the
12 weeks ended July 15 and was pressured, according to the company. Candy,
mint and gum category sales were down
0.4% during the same period.
"...We expected softer first-half
performance due to a shorter Easter and
promotional and innovation timing," Ms.
Buck said. "While measured channels
are a little soft, we are seeing growth in
untracked channels, as consumers' purchase patterns become increasingly fluid.
Our core franchises grew 1.3% during
Hershey's core franchises
grew 1.3% during the
12 weeks ended July 15,
driven by Reese's
Acquisition amplifies Hershey's
this period, driven by Reese's and Ice
Breakers Gum. Reese's growth accelerated driven by the limited roll-out of Reese's
Outrageous innovation and additional
media supporting a new campaign."
During the quarter, The Hershey Co.
reported net income of $226,855,000, equal
to $1.11 per share on the common stock and
an increase compared to the same period
of the previous year when the company
earned $203,501,000, equal to 98c per share.
Sales rose to $1,751,615,000 during
the second quarter from $1,662,991,000
during the second quarter of fiscal 2017.
Ms. Buck expressed optimism about
the company's full-year outlook but added management is focused on improving
Hershey's gross margins.
"While our margin performance
is not yet where we wanted to be, we
delivered second-quarter results in line
with our April outlook, and our plans and
full year estimate remain unchanged,"
she said. "This operating environment
requires an agile approach to portfolio
strategy and pricing. We continued to
take a proactive approach to optimize our
portfolio and deliver increased profitability. Our s.k.u. (stock-keeping unit) rationalization efforts are a great example,
and we are encouraged by early results."
A week earlier management
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