The Hershey Company
) launched a new product, Hershey's Simple Pleasures, which
contains 30% less fat compared to other leading milk chocolates.
This is the company's first new launch in five years.
The company is innovating new higher-quality products in order
to ensure stable growth. The company realizes that customers are
health conscious and aware of portion control. In fact, there is a
large population who love chocolates but refrain in order to
maintain a healthy lifestyle. These customers are the potential
clientele for Simple Pleasures.
This low fat chocolate is expected to widen the company's
customer base and increase its net sales in the upcoming quarters
of 2012, thus helping the company achieve its fiscal target.
For 2012, the company expects adjusted earnings to be in the
range of $3.11-$3.17 per share. The adjusted earnings per share are
expected to grow in the range of 10-12% year over year compared to
previous expectations of 9-11%. The Zacks Consensus Estimate is 61
cents for the second quarter of 2012, and $3.21 for FY2012.
We appreciate the company's investment in brand building and
product innovation, which eventually should result in consistent
growth over the long term. However, on the flip side, increasing
advertising expenses and rising cost of input commodities --
particularly cocoa, milk and fuel -- can have a negative impact on
margins of the company.
The Hershey Company carries a Zacks #2 Rank in the near term
Based in Hershey, Pennsylvania, The Hershey Company is the
largest producer of chocolates in North America. The company offers
more than 25 brands including Hershey's, Hershey's Kisses,
Hershey's Bliss, Hershey's Special Dark and Kit Kat.
HERSHEY CO/THE (HSY): Free Stock Analysis
To read this article on Zacks.com click here.