Home Consumer Hershey Warns Of Halloween Candy Shortage

Hershey Warns Of Halloween Candy Shortage

An employee shows a Hershey's chocolate bar made in USA in the
An employee shows a Hershey's chocolate bar made in USA in the "American lifestyle" store in Berlin, Germany, August 13, 2018. REUTERS/Fabrizio Bensch

 Hershey Co (HSY.N)said it would fall short of meeting demand for the all-important Halloween and Christmas holiday seasons this year, blaming a scarcity of raw ingredients and difficulties in securing suppliers.

Pandemic-induced global supply chain disruptions and the Russia-Ukraine war have crunched supplies of cocoa, edible oil and other food ingredients, pinching production lines of packaged food companies around the world.

Hershey Chief Executive Officer Michele Buck said those issues, along with the company’s focus on meeting demand during non-holiday periods, would lead to a likely shortage during Halloween, but added that sales will still top last year.

The period around the Halloween holiday in October is Hershey’s busiest time of the year, making up about 10% of the company’s annual sales, as kids and their parents stock up on Twizzlers, Jolly Ranchers and Kit Kat bars.

Still, shares of the Reese’s Peanut Butter Cup maker rose 2.5% in morning trading after the company lifted its profit and sales forecasts, benefiting from price hikes amid resilient demand for its chocolates and candies.

Hershey’s net sales rose over 19% to $2.37 billion in the quarter ended July 3, beating analysts’ estimates of $2.22 billion, according to IBES data from Refinitiv.

While Hershey expects more consumer pushback over higher prices in the second half of the year, the company is relying on price increases to boost growth.

“Historically, Hershey’s sales growth has been driven by higher prices and not necessarily volume … The company is entering this period from a position of strength with that expertise,” CFRA Research analyst Arun Sundaram said.

Reporting by Mehr Bedi in Bengaluru; Editing by Vinay Dwivedi and Maju Samuel

Reutersposted on  SouthFloridaReporter.comJuly 31, 2022

Republished with permission


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