The Hershey Company (NYSE: HSY), announced its second quarter financial reports on Thursday, showing improving North America and International sales.
The candy company reported $1.64 billion net sales for the second quarter in 2016, a 3.73% increase compared with $1.58 billion for the second quarter in 2015, including a 0.5% benefit from acquisition and a 0.8% headwind of unfavorable foreign currency exchange rate. Reported net income for the second quarter is $145.96 million, versus a net loss of $99.94 million for the second quarter in 2015, due to no goodwill impairment adjustment.
Hershey’s diluted earnings per share for common stocks is $0.68, and the board of directors announced quarterly dividends of $0.618 on the common stock, an increase of 6%, or $0.035 and $0.032 per share respectively.
“The company continues to generate steady free cash flow and has a strong balance sheet,” said John P. Bilbrey, Chairman, President and Chief Executive Officer, “This dividend increase reflects our confidence in Hershey’s marketplace position and long-term growth potential.”
North America, the major market for Hershey, gained 3.2% increase in net sales to $1.44 billion. While International and other segment reported a 7.6% growth in net sales, this segment resulted in $3.46 million loss. Yet, the company said compared to segment loss of $44.5 million in the second quarter of 2015, the new result benefited from improved combined income in Latin America and export markets, and lower direct trade in China.
The company continues to focus on its cost structure and estimate that full-year 2016 productivity and cost saving initiatives will be greater than our previous forecast. Hershey reported a 45.6% gross margin, a 16% operating profit margin, and a 8.9% net margin in the second quarter.
Its shares went up by 2.85% from 108.19 to 111.27 on Thursday.