(Reuters) -Hershey Co forecast full-year profit above Wall Street expectations on Thursday, after the Kit Kat maker beat estimates for quarterly profit on strong holiday demand and higher prices for its chocolates and candies.
Packaged food makers are grappling with rising prices for commodities such as sugar, wheat and soy, as well as soaring shipping and labor expenses as supply chains were strained during the pandemic.
To counter inflation, Hershey, like its peers, Campbell Soup Co, Kraft Heinz Co and Unilever PLC, has been bumping up product prices in recent months.
“Pricing will be an important lever for us this year and is expected to drive most of our growth,” said Chief Executive Officer Michele Buck.
However, Buck cautioned that a surge in Omicron cases has hit the company’s facilities as well as its suppliers due to higher absenteeism, and has pressured production at the facilities.
She expects this to impact the speed at which the chocolate maker can rebuild inventories and accelerate investments in demand-generating activities, which will likely be limited until the second half of the year.
The Pennsylvania-based company expects an annual adjusted profit of between $7.84 and $7.98 per share, compared with estimates of $7.57 per share.
Net sales rose to $2.33 billion in the quarter ended Dec. 31, from $2.19 billion a year earlier, compared with estimates of $2.27 billion, according to Refinitiv IBES data.
Net income attributable to the company rose to $355.6 million, or $1.62 per share, in the fourth quarter, from $291.4 million, or $1.39 per share, a year earlier.
Excluding one-time items, the company earned $1.69 per share, beating the average analyst estimate of $1.62 per share, according to Refinitiv IBES data.
(Reporting by Mehr Bedi in Bengaluru; Editing by Amy Caren Daniel)