Canada markets closed
  • S&P/TSX

    20,633.27
    -128.76 (-0.62%)
     
  • S&P 500

    4,538.43
    -38.67 (-0.84%)
     
  • DOW

    34,580.08
    -59.71 (-0.17%)
     
  • CAD/USD

    0.7786
    -0.0022 (-0.28%)
     
  • CRUDE OIL

    66.22
    -0.28 (-0.42%)
     
  • BTC-CAD

    63,736.66
    +2,211.12 (+3.59%)
     
  • CMC Crypto 200

    1,367.14
    -74.62 (-5.18%)
     
  • GOLD FUTURES

    1,782.10
    +21.40 (+1.22%)
     
  • RUSSELL 2000

    2,159.31
    -47.02 (-2.13%)
     
  • 10-Yr Bond

    1.3430
    -0.1050 (-7.25%)
     
  • NASDAQ

    15,085.47
    -295.85 (-1.92%)
     
  • VOLATILITY

    30.67
    +2.72 (+9.73%)
     
  • FTSE

    7,122.32
    -6.89 (-0.10%)
     
  • NIKKEI 225

    28,029.57
    +276.20 (+1.00%)
     
  • CAD/EUR

    0.6878
    -0.0027 (-0.39%)
     

Halloween trick-or-treating to soften Hershey's supply chain troubles

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
FILE PHOTO: Hershey's chocolate bars are shown in this photo illustration in Encinitas
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

By Mehr Bedi

(Reuters) - With costumed trick-or-treaters raring to go door to door this year after a pandemic-ridden 2020, candy maker Hershey Co is expected to bump up its annual sales forecast even as supply chain bottlenecks plague the industry.

Hershey has about 70% of its manufacturing capacity in the United States, and that is expected to help it deliver its Kisses and Reese's in time for what is expected to be the biggest Halloween in terms of spending.

The period around the October holiday is Hershey's busiest time of the year, making up about 10% of the company's annual sales.

Graphic - Halloween spending forecasts over the years: https://graphics.reuters.com/HERSHEY-RESULTS/byprjramape/chart.png

Consumer spending on Halloween-related items is expected to reach an all-time high of $10.14 billion this year, according to a National Retail Federation (NRF) survey, compared with $8.05 billion spent in 2020.

"There's going to be a lot of pent-up demand this Halloween, because many people couldn't celebrate last year. Coupled with that, in general the consumer is in a very healthy position and vaccination rates have been growing," CFRA analyst Arun Sundaram said.

THE CONTEXT

Growing global supply chain issues and worker shortages triggered by the pandemic have hurt packaged food makers. The companies are also taking a hit to their margins due to soaring prices of commodities such as sugar, cocoa beans, wheat and edible oils.

"Hershey would have an easier time navigating the (supply chain) crisis given that the company has less complexities in its supply chain compared to other packaged food companies who have a more global presence," Sundaram added.

NRF data suggests more U.S. consumers are ready to celebrate Halloween this year after a year of limited trick-or-treating.

THE FUNDAMENTALS

** Analysts forecast annual revenue of $8.82 billion for Hershey, which will report quarterly results before markets open on Thursday

** Full-year adjusted profit is estimated to be $6.91 per share

Graphic - Hershey likely to bump annual sales forecast on record Halloween spend: https://graphics.reuters.com/HERSHEY-RESULTS/jnvwewozlvw/chart.png

WALL STREET SENTIMENT

** The current average analyst rating for Hershey is "hold", with a median price target of $185.00

** The company's shares have risen nearly 20% this year

QUARTER STARMINE REFINITIV IBES ACTUAL BEAT, SURPRI

ENDING SMARTESTIMATE® ESTIMATE MET, SE %

MISSED

Jun. 30 2021 1.42 1.43 1.47 Beat 3

Mar. 31 2021 1.79 1.80 1.92 Beat 6.7

Dec. 31 2020 1.42 1.43 1.49 Beat 4.5​

Sep. 30 2020 1.72 1.72 1.86 Beat 8.3

(Reporting by Mehr Bedi in Bengaluru; Editing by Sweta Singh and Shounak Dasgupta)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting