Hershey CEO Warns Candy Demand Is Sliding as Shoppers Pull Back
HSY is trading near its 52-week low of $156.16 (5.1% above the low).
Summary
Hershey's CEO says shoppers are cutting back on candy, with U.S. candy, gum and mint sales in convenience stores down nearly 5% industry-wide in September. Kirk Tanner blamed the cumulative pressure of higher gas prices, inflation and interest rates, and said the same caution is carrying into October. That is a demand warning layered on top of this morning's Q3 report, where volume already fell about 10% even as adjusted EPS of $2.64 and sales of $3.28B came in and full-year adjusted EPS growth guidance was raised. The tension is that the profit beat and raised outlook rest on margin recovery, not volume — and the CEO is now saying the volume side is getting worse, not better. Convenience stores are a high-margin channel for candy, so a mid-single-digit industry decline there hits mix as well as top line. Watch whether the raised full-year guidance survives if October softness persists into the holiday season.
At the time of this announcement, HSY was trading at $164.20 on NYSE in the Manufacturing sector, with a market capitalization of approximately $33B. The 52-week trading range was $156.16 to $239.48. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.