(Reuters) - Hershey exceeded Wall Street expectations for first-quarter sales and profit on Friday, benefiting from higher prices and steady consumer demand for its chocolates and candy.

WHY IS IT IMPORTANT?

Hershey has seen minimal resistance as its customers have been willing to spend on higher priced chocolates and candy.

CONTEXT

Packaged food companies such as Mondelez ( MDLZ ) and Hershey implemented price hikes over the past few quarters to offset costs of commodities, including sugar and cocoa.

Hershey has seen a demand surge during significant holidays such as Easter and Thanksgiving, with consumers stocking up on favorites such as Reese's peanut butter cups and Hershey's Kisses.

The results echo sentiments of rival Mondelez ( MDLZ ) which saw upbeat first-quarter results on Tuesday, banking on consistent demand for its higher-priced products.

BY THE NUMBERS

Hershey's net sales rose 8.9% from a year earlier to $3.25 billion in the three months ended March 31, compared with analysts' expectations of $3.11 billion, according to LSEG data.

Net sales for confectionary products in the North America market, Hershey's largest and accounted for about 80% of its revenue, rose to $2.70 billion from $2.45 billion a year earlier.

Excluding items, it earned $3.07 per share, above market estimates of $2.76.

The company's organic price rose 5.2% while organic volume increased 3.4%.

The company's gross margin decreased 170 basis points to 44.9% in the reported quarter.

MARKET REACTION

Shares of the Pennsylvania-based company rose about 3% in premarket trading.