People love their sweets, and they’re not just indulging in them at home during the pandemic, Hershey CEO Michele Buck said.
“We’re seeing this unique period where there is both a continuance of that at-home consumer behavior, as well as increasing away-from-home behavior,” Buck said on CNBC’s “Closing Bell.”
“Consumers are participating in seasons, they are telling us they’re doing more movie nights at home, they’re making more s’mores at home [and] at the same time, we’re seeing growth in our food service and our own retail businesses, which are away from home.”
With both of these trends in its favor, Hershey raised its sales forecast for the year to a range of 4% to 6%, up from 2% to 4%. Earnings, meanwhile, should climb between 9% and 12% to a range of $6.64 to $6.86 per share.
On Thursday, the chocolatier said its first-quarter net income rose to $395.8 million, or $1.90 per share, on revenue of $2.3 billion. On an adjusted basis, its earnings per share were $1.92.
The company’s stock closed up 3.4% at $164.22 on the news, putting its market value at nearly $34 billion. Since the start of the year, Hershey shares have gained 8%. On Thursday, its stock hit an intraday high of $165.50.
Buck also said it has put two price increases in place this year on its seasonal candy business and its non-chocolate and grocery business. Buck attributed these price hikes to higher costs for packaging and freight. This past winter’s storms in Texas led to higher resin prices and limited availability, she said.
Buck added that Hershey had one of its strongest Easters in history as consumers are hanging onto traditions and rituals during the pandemic, strengthening sales of seasonal items. She expects this upcoming Halloween will follow a similar pattern.
“It was a strong Halloween last year, despite the environment, and the early signals that we’ve seen this year with our retail partners is that there’s a lot of belief that consumers will be interested in a strong Halloween this year,” she said, citing how well vaccine distribution is going so far as one factor driving the trend.