Hershey Warns of Weak Halloween Sales, Nudges Up Outlook

Core Insights - Hershey Co. reported disappointing Halloween sales in the US but raised its annual outlook due to price increases [1][4] - The company is experiencing a shift in consumer behavior towards cheaper and trendier sweets, influenced by higher cocoa costs [3][5] Sales Performance - Halloween sales are expected to be soft this season, with about a third of sales typically occurring in the final week when Halloween falls on a Friday [3] - Halloween accounts for nearly 18% of annual US candy sales, second only to Christmas [1] Financial Outlook - Hershey now anticipates full-year net sales growth of 3%, up from a previous estimate of 2% [4] - The company has increased its projection for adjusted earnings per share [4] Pricing Strategy - Hershey implemented double-digit price hikes in July due to high cocoa costs, resulting in approximately 7 points of price realization in North American confections last quarter [5] - The optimistic outlook reflects the company's ability to navigate economic pressures on US consumers [5] Consumer Trends - Despite economic pressures, the company remains optimistic about consumer resilience in its category [6] - Many food companies are seeing lower-income consumers focusing on essentials, but Hershey's category is showing resilience [6] Tariff Impact - Hershey expects tariff expenses to be between $160 million and $170 million, a reduction of $10 million due to lower Canadian retaliatory tariffs [6] Diversification - Hershey is perceived as less diversified compared to competitors like Mondelez International Inc. [7] - The company recently acquired LesserEvil, which produces organic snacks, and its sales of salty snacks in North America rose 10% last quarter, exceeding the overall growth rate [7]