Hershey, the confectionery company known for its popular Reese’s peanut butter cups and Hershey’s chocolate bars, has announced a decline in profit for the fourth quarter. The decrease can be attributed to rising costs of cocoa and sugar, which have caused the company’s margins to shrink.
In the quarter that ended on December 31, Hershey reported a net income of $349.04 million, or $1.70 per share. This is a drop from the $396.3 million, or $1.92 per share, recorded in the same period last year. Analysts had estimated earnings of $1.95 per share, indicating that Hershey fell short of expectations.
Although revenue saw a slight increase from $2.65 billion to approximately $2.66 billion, it was still below projections of $2.72 billion set by analysts polled by FactSet.
Hershey anticipates a net sales growth of 2% to 3% for the full year, driven primarily by net price realization. However, the company expects earnings per share to remain relatively flat due to ongoing challenges posed by higher cocoa and sugar costs, as well as one-time expenses associated with cost-savings initiatives.
Despite the limitations imposed by historic cocoa prices, Chief Executive Michele Buck remains optimistic about the company’s prospects. Buck believes that Hershey’s strong marketing strategies, focus on innovation, and investments in brand development will help drive top-line growth and cater to evolving consumer needs. Additionally, Hershey plans to enhance its productivity and implement transformative measures to strengthen its business and achieve outstanding long-term performance.
