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Key Takeaways
- Historically high cocoa prices and soft consumer demand negatively affected Hershey’s earnings and revenue.
- Two of the candy and snacks maker’s three units posted sales declines.
- Hershey also reduced its full-year forecast.
Hershey Co. (HSY) Thursday posted lower-than-estimated third-quarter results on soaring cocoa prices and weak consumer spending and also lowered its projections for sales and earnings for the year.
The maker of its eponymous candy bars and Kisses reported quarterly adjusted earnings per share (EPS) of $2.34, with revenue falling 1.4% to $2.99 billion. Both were short of forecasts.
Hershey reduced its full-year sales outlook to “flat” from the previous 2% gain. It sees adjusted EPS growth “down mid-single-digits” percent compared to the earlier “down slightly.”
Stock Trading at a Three-Year Low
Chief Executive Officer (CEO) Michele Buck said the company’s year-to-date results “have been affected by historically high cocoa prices and a challenging consumer environment.”
“Our priorities are to drive top-line and market share growth by winning in-store with key customers, expanding our chocolate portfolio, accelerating sweets, and maximizing our seasonal strength,” Block added.
During the third quarter, sales at the north American confectionary segment edged up 0.8% while sales at the salty snacks unit slumped 15.5%. International sales fell 3.9%.
TradingView
Hershey shares fell 2.3% Thursday and are down around 7% this year. The stock is trading at its lowest levels in three years.