The Hershey Co (HSY, Financial) shares declined by 3% after the company released Q3 2024 earnings results and full-year guidance, cutting both its earnings and forecast. The company identified historically high cocoa prices and an unfavorable consumer climate as the main threats.
The combined net sales for Q3 2024 amounted to $2.07 billion, a 1.4% decrease compared to 2023, and consolidated net sales, excluding the impact of acquisition and currency fluctuations, were 1.0% lower. Net income for the quarter was $446.3 million, or $2.20 per diluted share, a decrease of 12.7% compared to the prior year. Adjusted earnings per share reached $2.34, down by 10.0%.
In response to sustained economic challenges, Hershey has readjusted its projected full-year results for 2024. It now expects 0% net sales growth this year instead of the earlier forecast of 2%. The target for this year's reported earnings per share was also lowered from a decline of 3%-1% to a range between 9% and 6% down. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are anticipated to be 2%-4% lower than previously estimated.
The revised guidance reflects interest expenses of $170 million and capital expenditures of $575 million to $600 million, driven by additional core confection capacity. Hershey's AAP plans include increasing sales through in-store display activity, a commitment to expanding the chocolate portfolio and leveraging seasonal candy strength. The Agility & Automation Initiative will save around $100 million this year.
