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Investing.com -- The Hershey Company (NYSE: HSY) reported third-quarter earnings that surpassed analyst expectations, with revenue climbing 6.5% to $3.18 billion compared to the consensus estimate of $3.11 billion. The chocolate and snack maker posted adjusted earnings per share of $1.30, beating the analyst forecast of $1.06.
The company’s strong performance was driven by effective pricing strategies and innovation across its business segments. Organic, constant currency net sales increased 6.2%, primarily due to net price realization of approximately 6%, while volume remained slightly positive. Following the announcement, Hershey shares edged up 0.8% in trading.
"Third quarter results surpassed expectations, as strong innovation, strategic brand investments, and market leading execution drove momentum across business segments," said Kirk Tanner, The Hershey Company President and Chief Executive Officer. "Based on our results year-to-date, we are raising our full year outlook for net sales and earnings per share."
The North America Confectionery segment, Hershey’s largest business unit, saw sales increase 5.6% to $2.62 billion, while North America Salty Snacks delivered a robust 10% growth to $321 million. The International segment posted the strongest growth rate at 12.1%, reaching $244.8 million.
Despite the sales growth, Hershey faced significant margin pressure. Adjusted gross margin fell 850 basis points to 31.8% compared to the same quarter last year, as higher commodity and tariff costs along with unfavorable mix offset pricing benefits and productivity improvements.
Based on its year-to-date performance, Hershey raised its full-year outlook, now expecting net sales growth of approximately 3%, up from its previous guidance of "at least 2%." The company also narrowed its adjusted earnings per share decline forecast to 36-37%, compared to the previous range of 36-38%.
The guidance update does not include effects from Hershey’s proposed acquisition of LesserEvil, which is still pending.