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The
company also reported lower-than-expected sales for the third
quarter due to weak demand for candy, mint and gum, which
accounted for 90 percent of U.S. retail sales in the quarter.
Hershey attributed the fall in sales to some retailers cutting
down on marketing and fewer shoppers visiting stores.
A shift in consumer preference from candies and other sugary
snacks to healthier foods has forced retailers to limit their
marketing efforts on such products.
Slowing growth in China has also reduced spending on items such
as Hershey's Kisses chocolates, which are popular gift items in
the world's second-largest economy.
Hershey said it expected sales to be flat to slightly up this
year, down from the 1.5-2.5 percent growth it forecast in
August. This is the fifth time the company is cutting its sales
forecast.
Profit is now expected to be $4.10 per share compared with the
$4.10-$4.18 it anticipated earlier, as it expects to "markedly"
ramp up spending during the holiday quarter.
Net income fell to $154.8 million, or 70 cents per share, in the
third quarter ended Oct. 4, from $223.7 million, or $1 per
share, a year earlier.
Net sales were nearly flat at $1.96 billion, missing analysts'
average expectation of $1.98 billion, according to Thomson
Reuters I/B/E/S.
Excluding items, the company earned $1.17 per share, beating
expectations by 4 cents.
Shares of the company, which is also known for its Reese's
Peanut Butter Cups, were down 2.6 percent at $91.86 in premarket
trading on Wednesday.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by
Maju Samuel and Saumyadeb Chakrabarty)
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