4 November (Reuters) – On Friday, Hershey Co boosted its yearly sales and profit predictions, indicating that robust Halloween candy demand will extend into the holiday season despite higher selling prices.
Halloween is Hershey’s busiest season, accounting for roughly 10% of the company’s yearly income, with sales benefitting months in advance as stores make early orders to stock up on Twizzlers, Jolly Ranchers, and Kit Kat bars.
After two years of pandemic trick-or-treating restrictions, candy consumption for this year’s holiday is projected to have grown dramatically, with the National Retail Federation (NRF) predicting record high sales of $3.1 billion.
Hershey predicted that their Halloween retail sales increased by a high single-digit percentage, despite ingredient shortages and supply difficulties.
“We expect this category momentum to continue throughout the Holiday season,” CEO Michele Buck stated.
Buck went on to say that while more price rises and new manufacturing lines were projected to improve Hershey’s sales next year, demand would likely drop as customers become more price conscious.
The creator of Reese’s Peanut Butter Cups reported a 7.7% increase in worldwide average selling prices in the third quarter ended Oct. 2, while sales volumes grew by 4.1%.
In the same quarter, it posted adjusted profits of $2.17 per share on revenue of $2.73 billion.
According to Refinitiv statistics, analysts predicted a profit of $2.10 per share on revenue of $2.62 billion.
Hershey increased its outlook for 2022 net sales growth to 14% to 15%, up from 12% to 14%. It forecasts adjusted profit per share to increase by 14% to 15%, up from 12% to 14% before.
Other packaged food companies, like Cadbury maker Mondelez International (MDLZ.O) and Kellogg Co (K.N), have boosted their sales predictions in recent days, citing a lack of impact from price hikes on demand.