THE BUSINESSWEEK 50 RANKINGS + 25

44

Hershey

An ambitious restructuring plan and a move into new-product lines such as premium chocolate and snacks for nutrition-conscious consumers have Hershey predicting a sweet future. CEO Richard Lenny has also bolstered sales of higher-margin single-serve snacks aimed at on-the-go consumers and is making changes in distribution by expanding the brand’s presence beyond grocery stores and mass merchant chains to home-improvement and other specialty stores. Overseas, Hershey faces strong competition from Mars and Cadbury Schweppes, but a venture with Korea’s Lotte Confectionery will help it make inroads in China and other Asian markets. To increase its competitiveness, Hershey over the next three years plans to cut its workforce by 10.7%, or 1,500, and shift more of its production overseas. These moves should bring savings of $170 million to $190 million by 2010.

Overall Grade

A-

Market Data

HSY

Market Value
(2/28/2007)

$12.2 Billion

Profitability*

50.9%

A-

Sales Growth Rate**

6.1%

C+

12-Month Sales

$4.9 Billion

12-Month Net Income

$0.6 Billion

Total Return Past 12 Months

5.5%

Past 36 Months

34.6%

Economic SectorConsumer Staples
IndustryPackaged Foods & Meats
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE

Richard H. Lenny

Richard H. Lenny, 55

CEO since 2002


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Data as of 2/28/07 provided by Standard & Poor's Compustat