Hershey Foods (NYSE: HSY) reported Q2 EPS of $1.31, $0.18 better than the analyst estimate of $1.13. Revenue for the quarter came in at $1.71 billion versus the consensus estimate of $1.74 billion.

2020 Full-Year Financial Outlook Summary:

The operating environment continues to evolve, and the company’s performance improved over the course of the second quarter. The impact of recent spikes in coronavirus cases on consumer mobility, retail operations, government regulations, and the macroeconomic environment, however, remains unclear. As a result, the company is not providing new fiscal 2020 guidance at this time.

The company does expect accelerated sales growth in the second half of the year based on momentum exiting the second quarter, assuming no significant disruption to current consumer trends. The company also expects pricing and cost management to drive margin expansion in the second half of the year. We remain confident that our healthy balance sheet and strong cash flow will enable us to meet current business needs, invest for the future and return cash to stockholders.

In the North America segment, the company expects stronger second half sales growth driven by continued elevated at-home consumption, price realization, the replenishment of retailer and distributor inventory levels, and recovering sales in food service and specialty retail channels. The company does not currently expect seasonal performance to have a material effect on second half financial results, though the ramifications of a resurgence of COVID-19 cases on consumer participation in seasonal activities and the resulting retail impact remains uncertain.

In the International and Other segment, the company expects a slower recovery given current travel, retail, government and macroeconomic trends. Sales trends are expected to improve versus the second quarter; however, will fall short in the second half versus the prior year by double digits.

The company expects:

An adjusted effective tax rate of approximately 16 to 17 percent; and
Total cash returns to stockholders of approximately $800 million, comprised of dividends of approximately $650 million and share repurchases of $150 million completed earlier this year.

In addition, the company now expects foreign currency exchange to be a 70 basis point headwind on full year net revenue based on current exchange rates.

The company reaffirms its long-term financial objectives and capital allocation priorities remain unchanged.

For earnings history and earnings-related data on Hershey Foods (HSY) click here.