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Hershey misses sales target in Q2

'Macroeconomic headwinds in the U.S. continued to be an issue for many retailers and consumers,' said Hershey CEO
'Macroeconomic headwinds in the U.S. continued to be an issue for many retailers and consumers,' said Hershey CEO

Hershey has fallen slightly short of its net sales growth target in the second quarter but expects a strong Halloween and Christmas.       

Group net sales rose by 4.4% to $1.6bn in the second quarter of 2014, while net income grew 5.4% to $168m.

The company had targeted net sales growth between 5-7%. Hershey’s leading US market share of 31.1% was however unchanged.

Hershey president and CEO John P. Bilbrey said: “Our Easter sell through was very good and we gained 1.1 market share points in this important season. We expect our seasonal momentum to continue in the second half of the year as retail customer orders for Halloween and Holiday products are solid.”

Price hike

Hershey last week introduced an 8% price hike for its instant consumables, multi-pack, packaged candy and grocery lines in the US, Puerto Rico and export markets.

Bilbrey said today: “Across all channels we are working with retail customers this year and into 2015 to ensure that the implementation of the price increase we announced last week is supported with merchandising, programming and innovation.”

Outlook

Hershey is still targeting full-year 2014 net sales growth between 5-7%.  It said today that  full year net sales would be at the low end of its target.

The company said sales growth would be driven by Halloween and Christas sales as well as innovations such as York Minis and Hershey’s Spreads.

The company is planning a Reese’s spread later in the year and will also rollout of Ice Breakers Cool Blasts Chews and Brookside Crunchy Clusters.

Hershey said that full year adjusted earnings per share-diluted growth would be at low end of its 9 to 11% target, partly due to rising commodity costs.

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