The Hershey Company has announced that its consolidated net sales reached $1.97bn in the first quarter, 4.9% higher than the same period last year.
The Pennsylvania-based chocolate maker said that its North American net sales were up 4.4% to $1.75bn, lifted by its recent acquisition of Amplify Snack Brands, the company behind SkinnyPop popcorn and Tyrrells crisps.
Hershey also said that its core brands performed well and that its investment in new products was helping to encourage growth in the US.
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“First-quarter net sales and earnings per share were in line with our expectations as we continue to make progress in our key strategic focus areas,” said Michele Buck, President and CEO.
“We continue to drive growth in our core chocolate brands,” she added. “The Amplify acquisition is on track and delivering accelerated earnings accretion in 2018. We are transforming the international business model, delivering another quarter of profitable growth. And despite heightened cost pressures, we continue to invest in the business and deliver strong earnings growth.”
The chocolate giant bought Amplify Snack Brands for $1.6bn last December, in a bid to diversify its portfolio and make in “an innovative snacking powerhouse.”
According to Hershey, the deal is expected to generate $20mn in annual synergies over the next two years.
Hershey also said it plans to invest in operational improvements by increasing capital spending by $25 million from its share of the corporate tax cut passed late last year. The company said it expects to spend $355 million to $375 million on total capital additions this year, including software.
“We have a strong track record of consistently delivering earnings without compromising key business initiatives and investments, and we plan to do so again this year," Buck added.
"We are taking swift action to mitigate the cost headwinds that many in the industry are facing. We believe our focus on in-year margin improvement will benefit the company over the long term and enable us to achieve our goals. We are excited about our brand activations, innovation, and in store merchandising for the rest of the year and believe these activities will drive consumer engagement and growth across our portfolio."