Hershey(HSY) ZACKS·2024-09-27 16:10Core Viewpoint - The Hershey Company has faced significant challenges in the past six months, with a stock price decline of 0.7%, contrasting with the broader industry and S&P 500 performance [1] Financial Performance - Hershey's stock closed at 211.92, and has fallen below critical technical thresholds [2] - Analysts have revised down the Zacks Consensus Estimate for fiscal 2024 by 0.7% to 9.32 per share, indicating projected year-over-year earnings declines of 1.04% and 1.83% respectively [3] Market Challenges - The company experienced a 20.7% decline in North American confectionery net sales in Q2 2024, reflecting weakened consumer demand [4] - Rising input costs, particularly for cocoa and sugar, have led to a 200 basis point contraction in adjusted gross margin year-over-year in Q2 [5] Segment Performance - Despite challenges, the confectionery segment has shown resilience with a 2% increase in retail sales in the Candy, Mint & Gum category year-to-date [6] - The North America Salty Snacks segment performed well with 8% retail sales growth in Q2 2024, contributing to a 22-basis point market share gain [7] Innovation and Future Outlook - Hershey's innovation pipeline for the second half of 2024 includes new products expected to drive sales and momentum, particularly in the gummy and sweets segment [8] - The company anticipates mid-single-digit sales growth for the North America Salty Snacks segment in full-year 2024, driven by innovation [7] Investment Considerations - Current pressures from rising input costs and shrinking margins make Hershey's stock less attractive for new investors, although its core business remains strong [9]