USA – Hershey, an American multinational confectionery company, has noted that its business has been impacted by new trends including consumers pulling back on discretionary spending but its confident the operating environment will remain dynamic.
In the second-quarter 2024 consolidated results, the Pennsylvania-based chocolate manufacturers has reported a net sales decrease of 16.7% to US$2 billion.
Operating profit was US$287.8 million, a decrease of 48.7% versus the second quarter of 2023, resulting in a reported operating profit margin of 13.9%.
This was majorly due to volume declines, derivative mark-to-market losses, and higher commodity costs, which more than offset price realization and productivity gains.
In the quarter, net sales for Hershey’s International segment decreased 8.9% versus the same period last year to US$204.8 million.
The International segment also had a decrease of US$16.1 million versus the prior year period driven by volume declines and higher commodity costs, which more than offset higher net pricing realization.
“Today’s operating environment remains dynamic with consumers pulling back on discretionary spending. Our business has been impacted by these trends, but we are pleased to see continued growth in the confection category and momentum building in our Salty Snacks portfolio,” said Michele Buck, The Hershey Company President and Chief Executive Officer.
” Our second-half innovation is expected to bring energy to our categories, and we are confident our evolving strategies will meet consumers’ changing needs and drive long-term success.”
Hershey’s North America Confectionery segment net sales were $1,579.8 million in the second quarter of 2024, a decrease of 20.7% versus the same period last year.
Meanwhile, Hershey has launched a new licensing partnership with Kent Precision Food Groups to develop Candy Shop Cocoa, a collection of cocoa kits.
The kits are available in Hershey-inspired flavors, including Hershey’s Milk Chocolate, Reese’s Peanut Butter Cup, York Peppermint Pattie, and Hershey’s Cookies ‘N’ Creme. The products will hit shelves at major retailers nationally in September.
All the Candy Shop Cocoa flavors will be made with Hershey’s cocoa and real milk and are manufactured for and distributed by Kent Precision Foods Group, under license by The Hershey Company. Each kit features eight cocoa mixes, and prices will vary by retailer.
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