Hershey Foods (NYSE: HSY) reported Q1 EPS of $1.10, $0.03 better than the analyst estimate of $1.07. Revenue for the quarter came in at $1.83 billion versus the consensus estimate of $1.9 billion.

GUIDANCE:

Hershey Foods sees FY2016 EPS of $4.24-$4.28, versus the consensus of $4.34. Constant currency net sales growth expected to be around 2.5%, including a net benefit from acquisitions, primarily barkTHINS, of about 0.5 points; unfavorable foreign currency exchange rates estimated to be a 1.0 point headwind.

“Our first-quarter efforts were focused on ensuring successful sell-in and sell through of Easter candy and making progress against strategic initiatives that are expected to benefit net sales and earnings growth over the remainder of the year,” said John P. Bilbrey, Chairman, President and Chief Executive Officer, The Hershey Company. “First-quarter net sales were relatively in line with our overall forecast and operating income was slightly ahead, driven by greater than expected productivity and cost savings. Easter performance was solid versus our forecast but non-seasonal candy, mint and gum (CMG) shipments were below plan. However, the non-seasonal softness was more than offset by the timing of some merchandising program net sales that occurred in the first quarter that were initially expected to ship in the second quarter. Our updated outlook for the full year reflects the modest non-seasonal CMG category and Hershey trends through the April year-to-date period. North America CMG investments, including new products, advertising, and increased levels of merchandising and display, are expected to accelerate in the second quarter and over the remainder of the year. Given the quality and level of these investments, there could be upside to our outlook if non-seasonal CMG marketplace performance is better than the first quarter trends. Building on our snacks strategy, today we announced that we purchased Ripple Brand Collective, LLC, a privately held company that owns the barkTHINS mass premium chocolate snacking brand. Since its launch in 2013, barkTHINS has quickly become a favorite snack brand due to its commitment to using simple ingredients, fair trade cocoa and non-GMO certification. barkTHINS is a very attractive and uniquely crafted brand that essentially created the chocolate 'thins' category, a new form of chocolate snacking. We look forward to building barkTHINS by leveraging Hershey’s scale at retail.”

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