Hershey Shares Plummet Following Guidance Downgrade and Q2 Earnings Disappointment

HERSHEY, PA – The Hershey Company experienced a significant decline in its stock today, falling by 6.4% after reporting second-quarter earnings that did not meet analyst expectations. Additionally, the company has revised its full-year sales and profit forecasts downward.

A challenging operating environment, coupled with consumers reducing discretionary spending, has greatly impacted Hershey’s performance.

For the second quarter, Hershey reported adjusted earnings per share (EPS) of $1.27, which was below the consensus estimate of $1.43. The company’s revenue also fell short, totaling $2.07 billion compared to the anticipated figure of $2.3 billion. This marks an alarming 16.7% decrease in consolidated net sales, with organic and constant currency net sales down by 16.8%.

Michele Buck, Hershey’s President and CEO, indicated that part of the decline was due to inventory reductions and decreased levels of retailer inventory. These factors are expected to shift towards the latter half of the year.

Looking forward, Hershey anticipates full-year net sales growth of only 2%, a decrease from the earlier expectation of 2-3%. The adjusted EPS for fiscal year 2024 is now projected to be slightly lower than the previous guidance, which had anticipated stability. This change in projection has led to a decline in the company’s stock as investors respond to the less favorable outlook.

Despite the disappointing results for the quarter, Buck maintains a positive perspective about the future, pointing to growth in the confectionery category and increased momentum in the Salty Snacks segment.

“Our second-half innovation is expected to invigorate our categories, and we are confident that our evolving strategies will address consumers’ changing needs and foster long-term success,” Buck stated.