The Hershey Company
) recently announced the pricing of senior notes worth $250
million due 2023. The notes carry an interest rate of 2.625%.
Hershey intends to use the net proceeds to meet general corporate
Hershey reported cash and cash equivalents of $730.1 million as
of March 31, 2013. The present issuance of senior notes will
further increase its liquidity strength.
Hershey invests in core brand marketing and conducts advertising
and promotional campaigns to stimulate sales of its products. The
company intends to make further investment in brand building in
As a result, advertising expenses (as a percentage of
revenues) are expected to increase 20% year over year in fiscal
2013, mainly to support the Brookside product launch, new product
launches in both the U.S. and international markets and
accelerated advertising investments in key international
Specifically, the company will increase promotional efforts
for the Hershey's brand in China and Hershey's Mais in Brazil.
The increased liquidity strength will help the company execute
its brand building plans in the upcoming quarters.
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As a result, during its first quarter 2013 earnings release on
Apr 25, Hershey once again raised its full-year 2013 earnings
guidance as it expects to gain from increased marketing
investments in new products and international markets, lower
input costs and other cost savings despite a challenging
macroeconomic environment. The company now expects earnings in
the range of $3.61-$3.65 per share up from the prior expectation
of $3.56-$3.63 per share.
Hershey carries a Zacks Rank #2 (Buy). Hershey's strong brand
positioning, strategic marketing investments in core brands,
disciplined innovation, and consumer capabilities make it
Some consumer staples companies that are currently doing well and
have a bright outlook include
Flower Foods Inc.
) carrying a Zacks Rank #1 (Strong Buy) and
J&J Snack Foods Corp.
The Coca Cola Company
) carrying a Zacks Rank #2 (Buy).