(Bloomberg) -- Hershey Co. cut its outlook for growth in net sales growth and earnings as consumer pullback drives down volume sales, while “historically high” cocoa costs have driven price hikes.
The company reported third-quarter adjusted earnings per share of $2.34, below the $2.56 that analysts surveyed by Bloomberg expected.
The company now sees flat full-year net sales growth, down from about 2% in August.
Net sales were $2.99 billion in the quarter ending Sept. 29, falling short of the $3.07 billion analysts expected. Organic sales in constant currency fell 1%.
The shares fell 0.4% at 10:43 a.m. in New York. Through Wednesday’s close, the stock was down 5.2% year to date.
On the company earnings call, Chief Executive Officer Michele Buck said “pressure in the snacking categories are really driven by the consumers feeling pressured financially.”
Hershey has been hit by a year of record high cocoa prices, which have come down from their peaks but remain significantly elevated compared to prior years. Sugar costs are also high.
Higher input costs have left Hershey to raise prices, as well as to diversify its portfolio away from chocolate, such as with the launch of a Shaquille O’Neal gummy candy partnership. But as consumers watch their budgets more closely, discretionary items like candy have been on the chopping block.
(Updates with new details, share move and CEO comments.)
©2024 Bloomberg L.P.