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.
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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.
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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.”
