By Micah Maidenberg
Hershey Co. said the retailers that make up its customer base bought more of its chocolate and snacks in the first quarter, even though it pushed up prices on those items.
The maker of chocolate Kisses and Reese's peanut butter cups on Thursday said volumes were up 1.7% for the quarter. In North America, the company's largest market, volumes gained 1.4%, as prices ticked up 0.4%.
Last summer, the company told retailers and shareholders it would raise prices by 2.5% on average, an increase that began to take effect earlier this year.
More costly chocolate supported Hershey's adjusted gross profit margin, a key measure of profitability, which was up 0.8 percentage points from a year earlier to 45.7%. Hershey said more favorable raw-material costs helped improve its margins.
Shares of Hershey, up 9% so far this year, gained 3% in premarket trading Thursday on light volume.
The Hershey, Pa., company depends on chocolate for most of its sales, but has moved to develop its savory-snacks portfolio. Last year, it acquired Pirate's Booty cheese puffs from B&G Foods Inc. The company also purchased Amplify Snack Brands, which owns SkinnyPop popcorn and other snacks.
Overall, sales rose about 2% from the first quarter last year to $2.02 billion. Analysts expected $1.99 billion in sales, according to FactSet.
Hershey reported a profit of $304.4 million, or $1.45 a share, down from $350.2 million, or $1.65 a share, a year earlier.
After adjustments related to derivatives and acquisitions, the company recorded earnings of $1.59 a share, more than the $1.46 a share analysts predicted.
Earlier this month, Hershey said it had hired a new finance chief and appointed a new executive to lead its international business as president.
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