© Reuters. FILE PHOTO: An employee shows an American-made Hershey’s chocolate bar at the ‘American lifestyle’ store in Berlin, Germany August 13, 2018. REUTERS/Fabrizio Bensch
By Uday Sampath Kumar
(Reuters) – Hershey Co raised its full-year sales and profit forecast on Friday, signaling strong demand for Halloween candy that is expected to continue into the holiday season despite higher selling prices.
Halloween is the busiest time of year for Hershey, accounting for about 10% of its annual revenue, with sales benefiting months in advance as retailers place advance orders to stock up on Twizzlers bars , Jolly Ranchers and Kit Kat.
After two years of pandemic restrictions on tips and tricks, demand for candy this year is expected to have risen sharply, with the National Retail Federation (NRF) forecasting record sales of $3.1 billion.
Hershey estimated its Halloween retail sales rose by a high single-digit percentage, even as ingredient shortages and supply constraints hampered growth.
“We expect this category momentum to continue into the holiday season, and the product has already hit stores and is selling well,” said CEO Michele Buck.
Buck added that further price increases and new manufacturing lines should boost Hershey’s sales next year, but demand would likely slow as consumers become more price-conscious.
The maker of Reese’s Peanut Butter Cup said its overall average selling prices rose 7.7% in the third quarter through Oct. 2, while sales volumes rose 4.1%.
It reported adjusted earnings of $2.17 per share on revenue of $2.73 billion during the same period.
Analysts had expected earnings of $2.10 per share on revenue of $2.62 billion, according to Refinitiv data.
Hershey raised its net sales growth forecast for 2022 from 14% to 15%, from 12% to 14%. He expects adjusted earnings per share to grow 14% to 15%, versus the previous forecast of 12% to 14%.
Other packaged food makers, including Cadbury maker Mondelez (NASDAQ:) International and Kellogg (NYSE:) Co, have also raised their sales forecasts in recent days as they see little impact on demand. price increases.