Chocolate company Hershey (NYSE:HSY) will be reporting results this Wednesday before market hours. Here’s what investors should know.
Hershey met analysts’ revenue expectations last quarter, reporting revenues of $2.81 billion, down 13.8% year on year. It was a satisfactory quarter for the company, with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ gross margin estimates.
Is Hershey a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Hershey’s revenue to grow 22.3% year on year to $2.54 billion, a reversal from the 16.7% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.00 per share.
Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 5 downward revisions over the last 30 days (we track 13 analysts). Hershey has missed Wall Street’s revenue estimates five times over the last two years.
Looking at Hershey’s peers in the shelf-stable food segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Lamb Weston delivered year-on-year revenue growth of 4%, beating analysts’ expectations by 5.7%, and McCormick reported flat revenue, in line with consensus estimates. Lamb Weston traded up 19.3% following the results while McCormick was also up 3.6%.
Read our full analysis of Lamb Weston’s results here and McCormick’s results here.
There has been positive sentiment among investors in the shelf-stable food segment, with share prices up 3.8% on average over the last month. Hershey is up 10.9% during the same time and is heading into earnings with an average analyst price target of $165.57 (compared to the current share price of $184.03).
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