The company, a top stock pick for many Wall Street food analysts, also reported third-quarter sales and earnings that met analysts' estimates.
"Results were slightly better than our expectations, as both U.S. chocolate and non-chocolate candy categories continue to grow greater than the historical average despite macroeconomic challenges," said John Bilbrey, Hershey's chief executive.
The maker of Reese's peanut butter cups, Twizzlers and Kit Kat bars stood by its full-year profit growth goal, but raised its sales target. It now expects 2011 sales to increase about 7%, instead of 6%.
Net income was $196.7 million, or $0.86 per share, in Hershey's third quarter, up from $180.2 million, or $0.78 per share, a year earlier.
Excluding one-time items, earnings were $0.84 per share.
Net sales rose 5% to $1.62 billion, due entirely to price increases. Sales volume declined, as those price increases curbed demand. Foreign exchange rates lifted sales by 0.6 percentage points.
Analysts on average were expecting earnings of $0.84 per share on sales of $1.62 billion, according to Thomson Reuters I/B/E/S.
Like most packaged food and beverage makers, Hershey has raised prices on its products to offset soaring costs for ingredients such as cocoa and dairy. Yet a nearly 10% increase, put through in March, has outpaced the smaller increases more common in other food categories.
The company stood by its full-year earnings target, which calls for growth of about 10%, "Halloween got off to a solid start and we now anticipate higher seasonal sales for the full year," Bilbrey added.
For 2012, the company said it expects "the economic environment to remain challenging." Still, Hershey expects net sales and earnings growth to be within its long-term targets, which call for increases of 3-5% for sales and 6-8% for earnings.
From the October 27, 2011, Prepared Foods' Daily News.