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Hershey (HSY) Lined Up for Q4 Earnings: Key Factors to Note
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The Hershey Company (HSY - Free Report) is likely to witness a year-over-year rise in the top and the bottom line when it reports fourth-quarter 2021 earnings on Feb 3. The Zacks Consensus Estimate for revenues is pegged at $2,265 million, suggesting a rise of 3.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings has increased by 1.2% over the past 30 days to $1.63 per share, indicating a 9.4% jump from the figure reported in the prior-year period. The confectionary products and pantry items company has a trailing four-quarter earnings surprise of 4.4%, on average. Hershey delivered an earnings surprise of nearly 4% in the last-reported quarter.
Hershey Company The Price, Consensus and EPS Surprise
Hershey has been gaining on favorable demand due to increased away-from-home consumption. A focus on innovation and prudent acquisitions have been adding to HSY’s brand strength. Apart from this, strategic pricing initiatives have been working well amid elevated costs.
Hershey has been undertaking buyouts to augment its portfolio strength as well as boost revenues. In December 2021, Hershey acquired Dot’s Pretzels LLC, the owner of Dot’s Homestyle Pretzels, a leading brand in the pretzel category. The addition of Dot’s Pretzels is a perfect match for Hershey’s growing salty snacking portfolio. The company also purchased Pretzels Inc. from an affiliate of Peak Rock Capital. The acquisition will further expand HSY’s snacking and production capabilities. On Jun 25, 2021, Hershey concluded the acquisition of Lily's, a leading better-for-you (“BFY”) confectionery brand. The buyout is in tandem with Hershey’s focus on creating an impressive BFY confection portfolio as part of its multi-pronged BFY snacking strategy. The acquisition of Lily's benefited net sales by 1.4 points in the third quarter of 2021.
Talking of innovation, on its third-quarter earnings call, management highlighted that Reese’s brand continued to witness double-digit growth. The brand saw almost 20% growth on a two-year basis, backed by media support, new packaging, seasonal gains, pricing and innovation. Retail sales for the company’s SkinnyPop and Pirate’s Booty brands increased more than 20% in the third quarter. Hershey expanded its presence in BFY confection and gummy sweets. Management stated that its Zero-Sugar chocolate and Jolly Rancher Gummies innovation are yielding. Such upsides also bode well for the quarter under review.
Hershey has been grappling with higher selling, marketing and administrative expenses for a while. In the third quarter, adjusted gross margin contracted 110 basis points to 44.3% due to higher logistics, labor and packaging costs due to supply-chain bottlenecks and an unfavorable mix. The company said that it expects fourth-quarter gross margin to contract similar to the third quarter’s level. Management expects supply-chain costs, mainly logistics, labor and packaging to remain higher, at least through the first half of 2022. That said, Hershey’s strategic pricing initiatives have been aiding its performance.
Better-than-expected consumer demand, an improved tax outlook and an optimized brand investment prompted HSY to lift the 2021 net sales and earnings forecast when it reported third-quarter results. Management now envisions full-year net sales growth in the band of 8-9% and adjusted earnings between $6.98 and $7.11 per share.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Hershey this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Hershey currently has a Zacks Rank #3 and an Earnings ESP of +0.61%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Other Companies Likely to Post a Beat
The Estee Lauder Companies (EL - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings has moved down by a couple of cents in the past seven days to $2.62 per share, calling for a 0.4% rise from the year-ago quarter’s reported number.
The Estee Lauder Companies’ top line is also expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.5 billion, suggesting a rise of 12.8% from the figure reported in the prior-year quarter. EL delivered an earnings beat of 37%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coty Inc. (COTY - Free Report) has an Earnings ESP of +37.14% and a Zacks Rank #3. Coty is anticipated to register top-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.6 billion, indicating an improvement of 13.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Coty’s bottom line has remained unchanged in the past 30 days at 12 cents per share. However, the consensus estimate for earnings suggests a decline of 29.4% from the year-ago quarter’s reported figure. Coty delivered an earnings beat of 66.4%, on average, in the trailing four quarters.
Service Corporation International (SCI - Free Report) has an Earnings ESP of +17.39% and a Zacks Rank #3. Service Corporation is anticipated to register growth in the top line but a decline in the bottom line when it reports fourth-quarter 2021 results. The Zacks Consensus Estimate for quarterly revenues is pegged at about $1 billion, indicating a rise of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Service Corporation’s bottom line has jumped 11.1% in the past 30 days to $1.00 per share. The consensus estimate suggests a drop of 11.5% from the year-ago quarter’s reported figure. SCI has delivered an earnings beat of 45.6%, on average, in the trailing four quarters.
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Hershey (HSY) Lined Up for Q4 Earnings: Key Factors to Note
The Hershey Company (HSY - Free Report) is likely to witness a year-over-year rise in the top and the bottom line when it reports fourth-quarter 2021 earnings on Feb 3. The Zacks Consensus Estimate for revenues is pegged at $2,265 million, suggesting a rise of 3.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings has increased by 1.2% over the past 30 days to $1.63 per share, indicating a 9.4% jump from the figure reported in the prior-year period. The confectionary products and pantry items company has a trailing four-quarter earnings surprise of 4.4%, on average. Hershey delivered an earnings surprise of nearly 4% in the last-reported quarter.
Hershey Company The Price, Consensus and EPS Surprise
Hershey Company The price-consensus-eps-surprise-chart | Hershey Company The Quote
Key Factors to Consider
Hershey has been gaining on favorable demand due to increased away-from-home consumption. A focus on innovation and prudent acquisitions have been adding to HSY’s brand strength. Apart from this, strategic pricing initiatives have been working well amid elevated costs.
Hershey has been undertaking buyouts to augment its portfolio strength as well as boost revenues. In December 2021, Hershey acquired Dot’s Pretzels LLC, the owner of Dot’s Homestyle Pretzels, a leading brand in the pretzel category. The addition of Dot’s Pretzels is a perfect match for Hershey’s growing salty snacking portfolio. The company also purchased Pretzels Inc. from an affiliate of Peak Rock Capital. The acquisition will further expand HSY’s snacking and production capabilities. On Jun 25, 2021, Hershey concluded the acquisition of Lily's, a leading better-for-you (“BFY”) confectionery brand. The buyout is in tandem with Hershey’s focus on creating an impressive BFY confection portfolio as part of its multi-pronged BFY snacking strategy. The acquisition of Lily's benefited net sales by 1.4 points in the third quarter of 2021.
Talking of innovation, on its third-quarter earnings call, management highlighted that Reese’s brand continued to witness double-digit growth. The brand saw almost 20% growth on a two-year basis, backed by media support, new packaging, seasonal gains, pricing and innovation. Retail sales for the company’s SkinnyPop and Pirate’s Booty brands increased more than 20% in the third quarter. Hershey expanded its presence in BFY confection and gummy sweets. Management stated that its Zero-Sugar chocolate and Jolly Rancher Gummies innovation are yielding. Such upsides also bode well for the quarter under review.
Hershey has been grappling with higher selling, marketing and administrative expenses for a while. In the third quarter, adjusted gross margin contracted 110 basis points to 44.3% due to higher logistics, labor and packaging costs due to supply-chain bottlenecks and an unfavorable mix. The company said that it expects fourth-quarter gross margin to contract similar to the third quarter’s level. Management expects supply-chain costs, mainly logistics, labor and packaging to remain higher, at least through the first half of 2022. That said, Hershey’s strategic pricing initiatives have been aiding its performance.
Better-than-expected consumer demand, an improved tax outlook and an optimized brand investment prompted HSY to lift the 2021 net sales and earnings forecast when it reported third-quarter results. Management now envisions full-year net sales growth in the band of 8-9% and adjusted earnings between $6.98 and $7.11 per share.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Hershey this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Hershey currently has a Zacks Rank #3 and an Earnings ESP of +0.61%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Other Companies Likely to Post a Beat
The Estee Lauder Companies (EL - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings has moved down by a couple of cents in the past seven days to $2.62 per share, calling for a 0.4% rise from the year-ago quarter’s reported number.
The Estee Lauder Companies’ top line is also expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.5 billion, suggesting a rise of 12.8% from the figure reported in the prior-year quarter. EL delivered an earnings beat of 37%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coty Inc. (COTY - Free Report) has an Earnings ESP of +37.14% and a Zacks Rank #3. Coty is anticipated to register top-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.6 billion, indicating an improvement of 13.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Coty’s bottom line has remained unchanged in the past 30 days at 12 cents per share. However, the consensus estimate for earnings suggests a decline of 29.4% from the year-ago quarter’s reported figure. Coty delivered an earnings beat of 66.4%, on average, in the trailing four quarters.
Service Corporation International (SCI - Free Report) has an Earnings ESP of +17.39% and a Zacks Rank #3. Service Corporation is anticipated to register growth in the top line but a decline in the bottom line when it reports fourth-quarter 2021 results. The Zacks Consensus Estimate for quarterly revenues is pegged at about $1 billion, indicating a rise of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Service Corporation’s bottom line has jumped 11.1% in the past 30 days to $1.00 per share. The consensus estimate suggests a drop of 11.5% from the year-ago quarter’s reported figure. SCI has delivered an earnings beat of 45.6%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.