Hershey tops quarterly estimates on higher prices, snack demand

By Savyata Mishra

July 30 (Reuters) - Hershey ‌reported second-quarter ​sales and ​profit that exceeded Wall Street estimates on Thursday, driven by higher prices and robust demand for its Reese's chocolates and Dot's ‌Pretzels despite a challenging spending environment.

The confectionery maker has spent the ⁠past year raising prices to counter elevated cocoa costs, leaving investors focused on the resilience of ‌demand for its chocolate products.

The ‌better-than-expected results were largely due to a 12% jump in prices in the quarter, offsetting an 8% decline in overall volumes as shoppers remained value-conscious.

Sales ​in North America Confectionery, the company's largest business, rose 4.2% year-on-year during the reported quarter, while North America Salty Snacks sales increased 22.9%.

"Hershey is ⁠navigating a dynamic environment where the company is taking pricing whilst cocoa commodity costs are improving," RBC analyst ​Nik Modi said.

The results follow a stronger-than-expected quarter from rival and Cadbury parent Mondelez earlier this week.

Hershey said demand trends ​in its confectionery business should improve gradually as ‌commodity inflation eases and consumers adjust to prior price increases.

It pointed to momentum in brands including Hershey's, Jolly Rancher and ⁠other premium offerings, as well as a slate of product launches and seasonal promotions planned for the second half.

Hershey raised the lower end of its 2026 sales and profit ⁠forecast ranges and now expects net sales growth of 4.5% to 5.0% this year, largely ​in line with analysts' expectations.

It forecast adjusted earnings per share of $8.36 to $8.52, the midpoint of which is slightly below analysts' estimate of $8.48 per share.

"U.S. consumer sentiment remains soft, and shoppers ‌continue to be value-oriented and selective in their spending," CEO Kirk Tanner said in prepared remarks.

Shares of the company fell ‌about 1% in early trading.

Net sales rose 6.6% to $2.79 billion in the quarter ended ⁠June 28, topping analysts' estimate ‌of $2.63 billion, according to LSEG ​data.

Adjusted earnings came in at $1.90 per share, well above the expectation of $1.42 per share.

(Reporting by Savyata Mishra in Bengaluru; Editing by ‌Pooja Desai)

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