(Reuters) – Hershey Co (N:) on Friday beat quarterly profit and sales estimates and reinstated its full-year outlook boosted by strong Halloween sales and demand for chocolate chips and syrups from people taking up baking while stuck at home due to virus-driven lockdowns.
U.S. retail sales rose 6.6% in the quarter to Oct. 4, driven by strong sales of Hershey’s chocolate brands, which increased 9.8%, and baking items including peanut butter, syrup, chips and cocoa, which rose 15.7%, the company said.
Demand was also boosted by parents who bought more Twizzlers, Jolly Ranchers and Reese’s Peanut Butter Cups at a time social distancing restrictions meant fewer trips to grocery stores and spending Halloween at home instead of going trick-or-treating.
“We saw lower participation in trick or treat in the final two weeks (of Halloween season), but overall, the category showed resilience in a very volatile environment with COVID-19 case counts rising significantly across the country,” Chief Executive Officer Michele Buck said in prepared remarks.
Halloween net sales rose “slightly” above prior year and resulted in an estimated 400 basis point increase in seasonal market share gains.
Halloween, typically the candy industry’s biggest holiday season by sales, represents a tenth of Hershey’s roughly $8 billion in annual revenue.
Net sales rose 4% to $2.22 billion in the third quarter ended Sept. 27, beating analysts expectations of $2.16 billion, per Refinitiv data. Organic sales – which excludes the impact of M&A and currency fluctuations- rose 3.8%
Excluding items, the company earned $1.86 per share, above the $1.72 estimate.
Hershey also reinstated its full-year outlook it had pulled in April.
It forecast full-year net sales to rise about 1% anticipating organic sales growth in the fourth quarter to be similar to that in the third quarter. Adjusted earnings per share is expected to rise between 7% and 8% or to $6.18 and $6.24 per share.
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