Hershey, PA — The Hershey Co. has laid out its “Margin for Growth” program, which aims to provide the company with flexibility and fuel to continue brand and capability investments to reach its long-term projection of increasing net sales by 2 percent to 4 percent. Net sales for 2017 are estimated to rise 2 percent to 3 percent.
The multiyear program is designed to improve overall operating profit margin through supply chain optimization, a streamlined operating model and reduced administrative expenses, the candymaker reports. Savings are expected to come to fruition primarily in 2018 and 2019.
“We’re making progress against the ‘Margin for Growth’ related initiatives that should give us the flexibility to invest in certain parts of our business,” says Michele Buck, president and CEO. “Our objective is to ensure that we always have the right level of innovation, marketing plans, and consumer and customer expertise to drive net sales growth, especially in our North America confectionery and snacks business.”
She adds the company is working to return its international businesses to profitability. Combined, these efforts are expected to result in an adjusted operating profit margin between 22 percent and 23 percent by 2019.
Hershey estimates that implantation of the program will result in a 15 percent reduction of its global workforce, primarily driven by hourly employees outside of the U.S.