NEW YORK - Hershey Co (NYSE:HSY) reported third-quarter earnings that fell short of analyst expectations on Thursday, sending shares down 4% in early trading.
The chocolate and snack maker posted adjusted earnings per share of $2.34, missing the consensus estimate of $2.56. Revenue declined 1.4% YoY to $2.99 billion, also below analysts' projections of $3.08 billion.
Hershey cited historically high cocoa prices and a challenging consumer environment for the weaker-than-expected results. Organic, constant currency net sales decreased 1.0% as price increases of approximately 2% were more than offset by lower volumes across segments.
"While year-to-date results have been affected by historically high cocoa prices and a challenging consumer environment, we are laser-focused on controlling what we can," said Michele Buck, Hershey's President and CEO.
Gross margin contracted 460 basis points to 40.3% as higher commodity costs, unfavorable input cost timing, and fixed cost deleverage outweighed price increases and productivity gains.
For the full year, Hershey now expects net sales growth of 6-7%, down from its previous outlook of 8%. The company maintained its adjusted EPS growth forecast of 11-12%.
Looking ahead, Buck said Hershey's priorities are to drive top-line and market share growth by "winning in-store with key customers, expanding our chocolate portfolio, accelerating sweets, and maximizing our seasonal strength."
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