The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Hershey met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted.
Gross margins were steady, operating margins contracted, net margins dropped.
Hershey recorded revenue of $1.75 billion. The 11 analysts polled by S&P Capital IQ expected revenue of $1.74 billion on the same basis. GAAP reported sales were 7.5% higher than the prior-year quarter's $1.62 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.87. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.86 per share. GAAP EPS of $0.78 for Q3 were 9.3% lower than the prior-year quarter's $0.86 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 42.5%, about the same as the prior-year quarter. Operating margin was 18.4%, 220 basis points worse than the prior-year quarter. Net margin was 10.1%, 200 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.69 billion. On the bottom line, the average EPS estimate is $0.76.
Next year's average estimate for revenue is $6.58 billion. The average EPS estimate is $3.23.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 525 members out of 633 rating the stock outperform, and 108 members rating it underperform. Among 197 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 170 give Hershey a green thumbs-up, and 27 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hershey is outperform, with an average price target of $72.93.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.