Hershey warns it won’t ‘fully meet consumer demand’ this Halloween, Christmas
Hershey Co. is warning of an upcoming Halloween horror, announcing Thursday that it will not meet demand for the holiday season and Christmas holidays this year.
Like many manufacturers, Hershey’s has been hit by supply chain issues and the war in Ukraine, making ingredients like cocoa, edible oil and other food ingredients hard to find.
“Seasonal consumer engagement is expected to remain high, and we expect high single-digit sales growth for our Halloween and holiday seasons,” CEO Michele Buck said on the second quarter earnings call. the company’s quarter this week. “Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints.”
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Hershey president and CEO Michele Buck said those issues, along with the company’s focus on meeting demand outside of holiday periods, would lead to a likely shortage over Halloween, but added that sales will still be higher than last year.
The period around the Halloween holiday in October is the busiest time of year for Hershey, accounting for about 10% of the company’s annual sales, as children and their parents stock up on bars Twizzlers, Jolly Ranchers and Kit Kat.
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Still, shares of maker Reese’s Peanut Butter Cup rose 2.5% in morning trading after the company raised its earnings and sales forecast, benefiting from price increases amid resilient demand for its chocolates. and sweets.
Hershey’s net sales rose more than 19% to $2.37 billion in the quarter ended July 3, beating analyst estimates of $2.22 billion, according to IBES data from Refinitiv.
While Hershey expects greater consumer reaction to higher prices in the second half, the company is counting on price increases to drive growth.
The 128-year-old company raised its 2022 adjusted earnings per share growth forecast to 12% to 14% from 10% to 12%. Hershey also said it now expects net sales growth of between 12% and 14%, down from 10% to 12% previously estimated.
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“Historically, Hershey’s sales growth has been driven by higher prices and not necessarily volume … The company is entering this period in a position of strength with this expertise,” said Arun Sundaram, analyst at CFRA Research.
Hershey Co. did not immediately respond to Fox News’ request for comment.
Reuters contributed to this report.