Hershey forecast annual profit below Wall Street estimates as record cocoa prices weigh on the Kit Kat maker's margins.
Packaged food companies including Hershey have had to raise prices to combat high raw material costs, especially for cocoa, whose prices nearly tripled in 2024.
Lower supply for a fourth consecutive season in West Africa following dry weather is also said to impact prices.
Hershey's results also echoed that of larger rival Mondelēz, which forecast a bigger-than-estimated drop in its annual profit, anticipating more pressure from surging cocoa prices.
Hershey now forecasts 2025 adjusted earnings per share to be between $6.00 and $6.18, well below analysts' expectations of $7.34 per share, according to estimates compiled by LSEG.
Cocoa Prices
Company CEO Michele Buck said she expects the surge in cocoa prices to put "significant pressure on 2025 earnings."
Hershey saw a rebound in demand with volumes rising 6% in the quarter, mainly due to strength in its North America salty snacks business. Overall prices remained high, rising 3% in the quarter ended 31 December.
Its fourth-quarter sales rose nearly 9% to $2.89 billion (€2.78 billion) from a year ago, compared with estimates of $2.84 billion (€2.73 billion)
On an adjusted basis, the company earned $2.69 per share for the quarter, beating expectations of $2.37 per share.
In January, the chocolate maker announced the departure of CEO Michele Buck, who has held the position for more than seven years, effective 30 June 2026.
Buck, a consumer packaged goods veteran with nearly two decades at the company, will continue as CEO until her successor is appointed. She will then transition to a senior advisor role until her retirement, the company said.
