Hershey's profit tops estimates on Kit Kat sales, lower costs
Oct 26 (Reuters) - Hershey Co's profit and revenue topped analysts' estimates in the third quarter, as it sold more Hershey's Kisses and Kit Kat, and as the U.S. chocolate maker benefited from lower cocoa prices and cost-cutting efforts.
Hershey said on Thursday sales in North America - which make up the bulk of its revenue - rose 1.6 percent to $1.79 billion in the quarter ended Oct. 1, helped by Kisses and Kit Kat as well as the launch of items such as Chocolate Dipped Pretzels.
Hershey's profit was also boosted by declining cocoa prices, a cost-cutting plan it began implementing last year and layoffs announced earlier this year.
Cost of sales fell 5.2 percent to $1.09 billion in the third quarter.
The price of cocoa, estimated to make up about 10 to 15 percent of Hershey's cost of goods, has fallen more than 30 percent since last summer and could continue to decline in the next few years, analysts have said.
Hershey's net income rose 20 percent to $273.3 million or $1.28 per share in the quarter.
Excluding one-time items, Hershey earned $1.33 per share, beating analysts' average estimate of $1.29, according to Thomson Reuters I/B/E/S.
Net sales rose slightly to $2.03 billion and inched past analysts' expectations of $2.01 billion.
Hershey also announced a $100 million share buyback program. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Supriya Kurane and Sai Sachin Ravikumar)