By Aatrayee Chatterjee
(Reuters) -Hershey Co expects annual revenue and profit at the upper end of its previous forecast on Thursday, on the back of higher prices as well as resilient demand for its candy and chocolates.
Packaged food makers including Hershey, Mondelez (NASDAQ:MDLZ), Conagra Brands (NYSE:CAG) Inc and General Mills (NYSE:GIS) have all been steadily increasing product prices to protect profits amid rising costs.
"Pricing will drive year-over-year sales growth for the next several quarters," said Arun Sundaram, analyst at CFRA Research.
The company saw volume growth on strong consumer demand as well as earlier shipments that were originally planned for the second quarter, said Chief Financial Officer Steve Voskuil.
While inflation has hammered spending power, consumers have been willing to pay more for their favorite snack and chocolate brand.
Candy and snacking products see steady demand, "largely owing to their limited vulnerability to private label or store brands," Sundaram added.
The Kisses chocolates maker now expects full-year 2023 net sales to grow about 8%, compared to the previous forecast of 6%-8%. Hershey estimates adjusted profit per share to rise by 11%, compared with the prior forecast of 9%-11%.
Shares of the Pennsylvania-based company rose 1.3% in premarket trading.
Excluding one-time items, the company earned $2.96 per share, compared with estimates of $2.66.
The company's net revenue rose 12.1% to $2.99 billion in the first quarter, while analysts on average expected $2.91 billion, according to Refinitiv data.
(Reporting Aatrayee Chatterjee in Bengaluru; Editing by Krishna Chandra Eluri)