Consolidated net sales were $1236031000 comparedwith $1160342000 for the first quarter of 2008

Consolidated net sales were $1,236,031,000 comparedwith $1,160,342,000 for the first quarter of 2008. Reported net income for thefirst quarter of 2009 was $75,894,000, or $0.33 per share-diluted, compared with$63,245,000, or $0.28 per share-diluted, for the comparable period of 2008. For the first quarters of 2009 and 2008, these results, prepared in accordancewith generally accepted accounting principles (“GAAP”), include net pre-taxcharges of $19.0 million and $30.7 million, or $0.05 and $0.09 pershare-diluted, respectively. These charges were associated with the GlobalSupply Chain Transformation (“GSCT”) program.

Adjusted net income, whichexcludes these net charges, also referred to in this release as “net income fromoperations,” was $85,992,000 or $0.38 per share-diluted in the first quarter of2009, compared with $83,915,000, or $0.37 per share-diluted in the first quarterof 2008, an increase of 2.7 percent in earnings per share-diluted Total GSCT program costs to date are $549.0 million. The forecast for totalcharges related to the program is now $615 million to $665 million and includes$40 million to $65 million of non-cash pension settlement charges, discussed inprior quarters and described in Appendix A. For 2009, total GAAP charges relatedto the GSCT program are expected to be $85 million to $120 million, includingnon-cash pension settlement charges of $40 million to $50 million. First Quarter Performance and Outlook”Hershey`s first quarter results represent a good start to 2009,” said David J.West, President and Chief Executive Officer. “Performance was solid with gainsin net sales, profitability and U.S market share.

Net sales increased by 6.5percent driven by the pricing action announced in August 2008 and a longerEaster season, partially offset by unfavorable foreign currency exchange ratesand volume declines driven by pricing elasticity “U.S. retail takeaway for the 12-weeks ended March 22, 2009, excluding theimpact of Easter seasonal activity in the year ago and current period was up 7.4percent, in channels that account for over 80 percent of our retail business Inthe channels measured by syndicated data, U.S. market share, including Easterseasonal activity in the year ago and current period, increased 0.5 points. Thisperformance reflects solid market share gains within our core chocolate andsugar confectionery businesses as we gained market share in all classes of tradeon both an everyday and seasonal basis. Convenience store results wereparticularly strong with retail takeaway up high single digits driven by pricingand a comparison to soft performance in the year ago period. Hershey seasonalperformance was also strong as we gained market share in the Valentine`s period.Preliminary data indicate an Easter season market share gain as well.

Drivingthe successful core brand performance in the quarter was our balanced commitmentto brand-building initiatives, including advertising, up about 40 percent versusthe year ago period, seasonal programs and retail coverage. “First quarter profitability benefited from net price realization, better volumetrends than we had initially expected and supply chain efficiencies andproductivity. A portion of these gains was offset by higher commodity andpension costs as well as increased levels of brand-building investment spending.”We have good U.S. marketplace momentum as we enter the second quarter.Incremental year-over-year advertising, in-store programming and focused retailexecution will continue throughout the remainder of 2009. However, as wepreviously reported, we expect that consumers will now begin to see higherpromoted retail price points on our seasonal and everyday take-home packagedcandy through the balance of the year We still expect full year net salesgrowth of 2-3 percent. We continue to estimate that our year-over-year annualpension and commodity cost increases will be significant.

To date, dairy costsare favorable versus our initial estimates. If dairy spot market prices remainat current levels for the balance of the year, we would expect theyear-over-year annual commodity cost impact to be somewhat less than our initialestimate of $175 million. Therefore, despite the uncertainty related to volumedeclines due to pricing elasticity, we have confidence that earnings pershare-diluted from operations will increase, but less than the long-termobjective of 6-8 percent,” West concluded. Note: In this release, Hershey has provided income measures excluding certainitems described above, in addition to net income determined in accordance withGAAP. These non-GAAP financial measures, as shown in the attached pro formasummary of consolidated statements of income, are used in evaluating results ofoperations for internal purposes. These non-GAAP measures are not intended toreplace the presentation of financial results in accordance with GAAP.