Hershey's tepid annual forecasts overshadow quarterly profit beat

Reuters | Updated: Jul 25, 2019, 17:14 IST

(Adds details on forecast, segment sales, share movement)July 25 (Reuters) - Chocolate maker Hershey Co cut its full-year sales forecast on Thursday, overshadowing a better-than-expected quarterly profit and sending its shares down 3%.The company said it expected full-year sales to grow 2% compared to prior forecast of an increase of as much as 3%. It also forecast full-year adjusted profit below analysts expectation of $5.75 per share.Hershey and other package food makers have been facing a dearth of drivers, higher diesel prices and rising prices for some commodities, which has led to record shipping costs.To overcome that, the company raised product prices by an average of 2.5% earlier this year. The efforts helped Hershey's adjusted gross profit margin to expand 200 basis points to 46.5% in the quarter.Net income attributable to the company rose 38% to $312.8 million, or $1.48 per share, in the second quarter ended June 30, from a year earlier.Excluding items, it earned $1.31 per share and beat analysts' average estimate of $1.18 per share.However, sales in North America, its biggest market, rose just 0.5% to $1.57 billion in the quarter. Total sales rose about 1% to $1.77 billion, in line with the average analyst estimate, according to IBES data from Refinitiv.(Reporting by Soundarya J in Bengaluru; Editing by Arun Koyyur)

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