Hershey exceeded Wall Street expectations for first-quarter sales and profit on higher prices and steady consumer demand for its chocolate and candy.
The results, posted on Friday, showed that the company saw minimal resistance as its customers have been willing to spend on increased prices.
Packaged food companies, such as Mondelēz and Hershey introduced price hikes over the past few quarters to protect margins as the cost of commodities such as sugar and cocoa increased.
Hershey has seen a surge in demand during significant holidays such as Easter, with customers stocking up on products such as Reese’s Peanut Butter Cups and Hershey’s kisses.
Higher-Priced Snacks
The results echo those of Mondelēz which saw upbeat first quarter results earlier in the week.
The Cadbury owner banked on consistent demand for its higher-priced products.
Hershey’s net sales rose 8.9% from the previous year to $3.25 billion in the three months ending 31 March.
This beat analysts’ expectations of $3.11 billion, according to data from the London Stock Exchange Group.
Net sales for confectionary products in the North America market – Hershey’s largest – accounted for about 80% of its revenue.
In monetary terms, that revenue rose to $2.70 billion from $2.45 billion a year earlier.
Excluding items, it earned $3.07 per share, above market estimates of $2.76.
The company’s organic price rose 5.2% while organic volume increased 3.4%.
Hershey’s gross margins decreased 170 basis points to 44.9% in the first quarter.
Shares for the company rose about 3% in premarket trading.
Read More: Mondelēz International Beats Q1 Market Expectations
