The first quarter was a sweet one for The Hershey Co.
The candy maker said Tuesday its first-quarter profit rose 24 percent as higher prices and cost cutting helped offset rising ingredient costs. The company raised its sales forecast for the year, which sent shares up 6 percent near an all-time high that was set nearly seven years ago.
Most food makers have been increasing prices to offset rising ingredient costs. Last year Hershey, famous for its chocolate bars, Hershey's Kisses and Reese's peanut butter cups, raised prices by nearly 10 percent to offset rising prices for raw materials including sugar, fuel and packaging.
The company said higher prices helped offset slightly lower volume and sent revenue up 11 percent. The Hershey, Pa.-based company has also been boosting advertising spending in the U.S. and abroad.
"Hershey's strong start to the year is the result of our continued strategy of disciplined investment in core brands in both the U.S. and key international markets," said CEO John Bilbrey.
He said Easter sales were likely "solid," but since the holiday fell on April 8 and the quarter ended April 1, the total effect was not felt during the quarter.
Hershey said that net income rose to $198.7 million, or 87 cents per share, for the quarter ended April 1. That is up from $160.1 million, or 70 cents per share, a year ago. Excluding one-time items, earnings totaled 96 cents per share. Analysts expected 81 cents per share, according to FactSet.
Revenue rose 11 percent to $1.73 billion. Analysts predicted revenue of $1.66 billion.
Hershey says it expects adjusted net income for the year to rise 10 percent to 12 percent, up from a prior estimate of 9 percent to 11 percent. It expects a 7 percent to 9 percent sales increase. It's the third time the company has raised its sales forecast for the year — in the prior quarter it said it expected a 6.5 percent to 8.5 percent rise.
Hershey plans to roll out new products in the current quarter including Rolo Minis, Ice Breakers Duos and Hershey's Simple Pleasures, flavored milk chocolate that has 30 percent less fat than other milk chocolate.
Its shares rose $3.71, or 6 percent, to close at $66 Tuesday after rising as high as $66.94 earlier in the session. The stock's all-time high was $67.37 set on May 31, 2005, according to Fact Set.