US confectionery giant Hershey has downgraded its sales outlook for 2017, blaming a tough retail climate.
Commenting on its second-quarter results, released today (26 July), Hershey said it now expects its net sales growth in 2017 to be around 1%, including unfavourable foreign currency exchange rates of about 0.25 percentage points.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
This is lower than Hershey’s previous forecast for 2017 net sales growth, which was around the low end of the 2% to 3% range.
Hershey said “broader industry challenges at the retail level will persist over the remainder of the year”.
In March, Hershey’s peer Lindt & Sprungli revealed the American chocolate market as a whole declined in 2016 for the first time in recent years.
In the six months to 2 July 2017, Hershey recorded operating profit of US$507.3m compared to $602.3m in the first half of 2016 while net income attributable to The Hershey Company was also down, standing at $328.5m, versus $375.8m for the first six months of 2016.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataHershey said this half year period saw long-lived asset impairment charges of $208.7m.
The Reese’s owner’s second-quarter net sales reached $1.66bn, compared to $1.64bn for the second quarter of 2016 (up 1.5%). Reported net income was $203.5m, versus $146m for the comparable period of 2016. Q2 operating profit was US$315.3m against a figure of US$262.7m for the comparable period last year.
Commenting on the second-quarter results, president and CEO Michele Buck said: “Second-quarter results were solid and we’re making progress against our strategic initiatives in a rapidly changing marketplace.”
