HERSHEY, PA - The Hershey Company (NYSE:HSY) shares fell sharply today, dropping 6.4%, after the confectioner reported second-quarter earnings that missed analyst expectations and cut its full-year sales and profit forecasts.
The company cited a challenging operating environment with consumers cutting back on discretionary spending as a key factor impacting its performance.
For the second quarter, Hershey posted adjusted earnings per share (EPS) of $1.27, falling short of the consensus estimate of $1.43. Revenue also declined, coming in at $2.07 billion compared to analysts' expectations of $2.3 billion. This represents a significant 16.7% decrease in consolidated net sales, with organic, constant currency net sales also down by 16.8%.
According to Hershey's President and CEO Michele Buck, the drop was partly due to inventory reductions and lower retailer inventory levels, which are expected to shift to the latter half of the year.
Looking ahead, Hershey now anticipates full-year net sales growth of only 2%, a reduction from the previously estimated range of 2-3%. Adjusted EPS for the fiscal year 2024 is projected to be 'down slightly' from the previous guidance of flat. This downward revision in guidance has contributed to the stock's decline as investors adjust to the less optimistic outlook.
Despite the disappointing quarter, Buck remains positive about the future, noting growth in the confection category and building momentum in the Salty Snacks portfolio.
"Our second-half innovation is expected to bring energy to our categories, and we are confident our evolving strategies will meet consumers' changing needs and drive long-term success," Buck stated.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.