Confectionery giant Hershey has recorded a sharp rise in second-quarter sales, but profit tumbled as the chocolate maker faced higher cocoa prices, supply chain costs and unfavourable commodity hedging impacts.
The company posted net sales of US$2.61 billion, up 26 per cent from the same period last year, driven by strong demand for seasonal products like Easter season and early Halloween shipments.
Despite the revenue growth, net income fell 65 per cent to $62.7 million.
Hershey said strong volume growth, particularly in its North American confectionery business, was offset by a steep drop in gross margins due to rising input costs and mark-to-market losses on commodity derivatives.
“Investments in our brands and impactful innovation, coupled with effective execution, are driving solid sales and share gains across both our US confection and salty snacking businesses,” said Michele Buck, The Hershey Company president and CEO.
“Looking ahead, we remain committed to delivering balanced growth and have taken pivotal steps toward mitigating cocoa inflation through strategic pricing, enhanced productivity, and technology-enabled efficiency and speed.”
Earlier this year, Hershey also appointed Kirk Tanner as its new president and CEO, effective August 18, succeeding Buck.
