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$HSY announced an evolution to its U.S. creative agency roster. As of January 2018, $HSY will consolidate creative campaign work for a number of its iconic brands with its existing roster agencies, Anomaly and CP B. $HSY said Arnold has been a valued partner for over a decade and Arnold will continue to work on $HSY's brands through end of 2017.
$HSY said that in China, as part of its margin for growth and margin expansion program, the company has started immediately taking the necessary steps to reset its investment in that marketplace. Therefore, $HSY is focused on a multi-year program, but beginning now to focus on a couple of key provinces on its core portfolio.
$HSY stated that the company is feeling good with the programs that it has on the core brands. On the non-chocolate sweets area, the company is planning on accelerating its growth trajectory. Consequently, the company expects to increase its investments there.
Chocolate maker $HSY's earnings in 1Q17 almost halved, despite it posting a 2.8% increase in net sales to $1.88Bil. Net income was $125MM or $0.58 per share, compared with $229.8MM or $1.06 per share in the prior-year quarter. EPS, adjusted for one-off items, was $1.31.
Over the long term, $HSY expects annual constant currency net sales growth of 2% to 4%, driven primarily by its North America business. $HSY reaffirmed its long-term adjusted diluted EPS growth target of 6% to 8%, also driven mainly by the advantages of the company's North America business and the "Margin for Growth" related initiatives.
$HSY expects to reduce its global workforce by about 15%, driven primarily by its hourly headcount outside of the US. This is part of $HSY's "Margin for Growth" program, which is expected to enable investments in business model and generate about 22% to 23% adjusted operating profit margin by 2019 end.
$HSY said Steven Schiller is named President, International and Terry O'Day is the new SVP, Chief Product Supply and Technology Officer. The appointments will be effective March 1. Meanwhile, Chief Knowledge and Technology Officer Waheed Zaman will retire from the company, effective March 31. $HSY is now on a hunt for a Chief Growth Officer.
$HSY announced the new executive leadership team that incoming CEO Michele Buck has chosen. Todd Tillemans is appointed as President, U.S. and he will join $HSY on April 3 to lead the company's flagship U.S. business including core confection, its portfolio across snacking, and its sales and go-to-market teams.
$HSY said investment tax credits are a driver of the tax improvement. The company is focused on improving the mix of international operations and is also taking advantage of its R&D investments. $HSY is making sure that the changes it is making are sustainable and not highly volatile to its tax rate.
For 4Q16, excluding the negative impact from FX rates of 3.2 points, $HSY’s International and Other segment net sales increased 2.7%. Volume was off 10BP as solid Latin America, India and select export market performance was offset by lower sales in China. Net price realization was a 2.8 point benefit.
During 4Q16, $HSY’s North America segment net sales increased 3.8% driven by a 4.1 point contribution from volume. Acquisitions were a 1 point benefit and net price realization was a 1.3 point headwind due to planned higher levels of direct trade supporting increased in-store merchandising and display activity.