Hershey's profit beats on cost cuts, strong U.S. demand

REUTERS - Hershey Co, the maker of Reese's Peanut Butter Cups and Hershey's Kisses, reported a higher-than-expected quarterly profit on Wednesday, helped by cost-cutting and on strong demand in the United States.

Sales in North America, Hershey's largest market, rose 2.2 percent to $1.47 billion in the second quarter ended July 2.

Hershey, apart from implementing a cost-cutting plan last year, has also been launching new and reinvented products like Snack Mix, Snack Bites and Hershey's Cookie Layer Crunch bars to differentiate itself from other players in North America.

The company said acquisitions such as its buy of the barkTHINS brand, added 0.5 percent to its sales in the quarter.

The company, in February, said it would cut its global workforce by about 15 percent under its new Chief Executive Michele Buck as part of a restructuring program to build recovery in demand in North America.

Excluding certain items Hershey earned $1.09 per share, beating analysts' average estimate of 90 cents per share, according to Thomson Reuters I/B/E/S.

Hershey also raised its quarterly dividend to 65.6 cents for its Class A shares and 59.6 cents for its Class B shares from 61.8 cents on Class A shares and 56.2 cents on Class B.

The company also forecast full-year net sales growth of about 1 percent, down from its previous forecast around the low end of the 2-3 percent range.

Hershey's net income rose to $203.5 million, or 95 cents per share, in the second quarter ended July 2, from $146 million, or 68 cents per share, a year earlier.

Net sales rose 1.5 percent to $1.67 billion. Analysts on average had expected $1.66 billion.

Hershey's shares rose marginally to $107.70 in premarket trading.

(Reporting by Gayathree Ganesan in Bengaluru; Editing by Sai Sachin Ravikumar and Martina D'Couto)