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The Hershey Co. announced sales and earnings for the second quarter ended June 29, 2008. Consolidated net sales were $1,105,437,000 compared with $1,051,916,000 for the second quarter of 2007. Net income for the second quarter of 2008 was $41,467,000 or $0.18 per share-diluted, compared with $3,554,000 or $0.01 per share-diluted, for the comparable period of 2007.

For the second quarters of 2008 and 2007, these results, prepared in accordance with generally accepted accounting principles ("GAAP"), include net pre-tax charges of $39.3 million and $124.4 million, or $0.11 and $0.34 per share, respectively. The majority of these charges were associated with the Global Supply Chain Transformation program announced in February 2007. Net income from operations, which excludes the net charges for the second quarters of 2008 and 2007, was $66,952,000 or $0.29 per share-diluted in 2008, compared with $81,671,000 or $0.35 per share-diluted in 2007.

"Hershey’s second quarter results reflect the progress the company continues to make in the marketplace," said David J. West, president and chief executive officer, in a prepared statement. "Sales increased by 5.1 percent, driven by organic sales gains of 3.5 percent from pricing and overall growth in core brands and new products, offset by softness in snacks and refreshment. The Godrej Hershey Ltd. venture in India accounted for the remaining growth. Gross margin expanded slightly as pricing and supply chain savings offset higher commodity costs and the impact of integrating our business in India. Second quarter profitability, which was in line with our expectations, was curtailed by increased brand support, including costs associated with new product introductions, greater levels of retail coverage and investments within key international markets.

"U.S. retail takeaway in the second quarter, excluding the effect of Easter timing, increased 5.0 percent in channels that account for over 80 percent of our retail business. As a result, non-seasonal everyday market share was about equal to the prior year’s second quarter in the channels measured by syndicated data. The results have been positive where we have focused our resources. In the U.S., advertising and consumer brand-building investment increased by about 30 percent in the second quarter. Activity was primarily concentrated in the Reese’s and Hershey’s franchises, including Hershey’s Bliss, and Starbucks Chocolates.

"We’re pleased with our U.S. marketplace performance in the second quarter as we improved in all classes of trade. The category has and will continue to grow. We expect Hershey’s year-over-year core brand marketplace performance improvement to continue, benefiting from the new approach of our consumer-driven demand model."

For the first six months of 2008, consolidated net sales were $2,265,779,000 compared with $2,205,025,000 for the first six months of 2007. Reported net income for the first six months of 2008 was $104,712,000 or $0.46 per share-diluted, compared with $97,027,000, or $0.42 per share-diluted, for the first six months of 2007.

For the first six months of 2008 and 2007, these results, prepared in accordance with GAAP, include net pre-tax charges of $69.9 million and $164.8 million, or $0.20 and $0.44 per share, respectively. The majority of these charges were associated with the Global Supply Chain Transformation program announced in February 2007.