Rising costs for commodities like cocoa and corn sweeteners continue to pressure margins at Hershey's. In response to these increasing costs, Hershey lowered its outlook and decided to boost wholesale prices by 10%.
Price increases helped buoy Hershey Co.'s second-quarter sales; the company announced in January that it would boost prices by 13%. Unfortunately these price increases were not enough to boost profitiablitiy as earnings from continuing operations fell 12%.
Mars' agreement to purchase Wrigley fueled speculation of more consolidation in the candy business. If Hershey were bought by a competitory (such as Cadbury Schweppes), Hershey shareholders might get a nice premium on their shares.
Hershey's first-quarter net income dropped 32% on sliding profit margins as the company dealt with higher commodity costs. HSY's weak earnings show that its efforts to pass costs on to customers are not yet effective. In January, the company, which makes Hershey's Kisses and Reese's peanut butter cups, raised wholesale prices by about 13% on one-third of its domestic candy line to help offset increased costs for ingredients, fuel, utilities and transportation. Regardless, gross margin fell to 32.4% from 35.9%
Analyst at Bernstein downgraded Hershey, citing commodity cost pressures and slowing growth
All but two of Hershey's board members resign, a testament to the growing tension between the company's controlling Trust and its management team
Hershey Co. reported its third-quarter profits dropped 66% because of higher expenses and stiffer competition
Hershey's announces joint venture plan with Indian company, Godrej Beverages and Food Ltd.
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