Hershey has cut its long-term earnings growth targets ahead of a meeting with financial analysts in New York today (17 June).
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Hershey stood by its 2008 EPS forecast of US$1.85 to $1.90 before one-time items.
However, following a review of growth targets launched in October, Hershey has set a new long-term earnings growth target of 6-8%. It had previously aimed to achieve earnings growth of 9-11%.
The company also said it is eyeing annual sales growth of 3-5%, compared with the previous 3-4% target.
In an attempt to reinvigorate lacklustre sales, Hershey plans to increase its advertising spend by 20% per year over the next two years.
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By GlobalDataThe US confectioner has struggled to deal with increased costs while also loosing market share in the US to the likes of Mars.
In April, Mars acquired Wm Wrigley for $23bn, sparking speculation that the sector could be in for further consolidation, with Hershey viewed as a potential target.
However, LeRoy Zimmerman, chairman of the Hershey Trust, ruled out any possibility of Hershey being sold in a comment piece printed over the weekend.
“The trust is committed to retaining its controlling interest in the company,” Zimmerman wrote in the Harrisburg, Pennsylvania Patriot-News. “This is first and foremost a principle grounded in Milton Hershey’s philanthropic legacy. It also is rooted in constraints of Pennsylvania law and practical business imperatives. Simply put: We will not sell The Hershey Co.”
The Hershey trust controls 78% of Hershey’s voting stock.
