Yahoo Finance Hershey Looks Delectable on Lucrative Buyouts & Strong Brands
The Hershey Company HSY has been benefiting from well-chalked measures to boost portfolio strength, including acquisitions and innovations. These factors have been driving the company’s revenues. Further, Hershey’s enhanced pricing policies and efforts to augment operating efficiency have been yielding.
Factors Driving Growth
Buyouts have played an important role in augmenting Hershey’s revenues. In this regard, the company’s acquisition of ONE Brands, LLC, completed in September 2019, is bolstering the nutrition bar category. In fact, ONE Brands is expected to have a positive impact of 1 point on net sales in 2020. In August 2019, the company announced minority investments in Fulfil Holdings Ltd. and Blue Stripes L.L.C., both of which are slowly picking up pace in the snacking space.
Hershey acquired Pirate Brands from B&G Foods BGS in September 2018 to bolster its snacking business. Additionally, the company has been gaining from Amplify Snack Brands, which was acquired in January 2018 to expand in the snacking category. Moreover, the acquisition of New York-based premium chocolate snacking brand, barkTHINS, (April 2016) has been aiding the company’s better-for-you snacks portfolio. Other food companies like Smucker SJM and Mondelez MDLZ are also benefiting from acquisitions.
Coming back to Hershey, it regularly brings innovation to its core brands to meet consumer demands and needs that are not addressed by its current portfolio. In this respect, it is optimistic about its Kit Kat Duos innovation along with the expansion plans of the THiNS platform. Further, the company expects to launch York THiNS and Reese's white THiNS by March. Moreover, an important strategy of the company is to create a unique and holistic portfolio for every season, which can meet consumers’ seasonal shopping needs.
Moreover, Hershey is progressing well with its efforts to enhance operating efficiency. In this respect, the company’s SKU rationalizing efforts have been fruitful. In addition, Hershey has been gaining from its Margin for Growth multi-year program. The program is intended to improve overall operating margin through supply chain optimization, streamlining the operating model and reduction of administrative expenses. Additionally, the company has undertaken initiatives to improve the price mix. We note that Hershey’s continued focus on augmenting net price realization is expected to support gross margin growth in the future.
We believe that these upsides are likely to help the company maintain its solid footing.
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Hershey Company (The) (HSY) : Free Stock Analysis Report
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