Hershey’s Stock In The Red After Weaker-Than-Expected Q3 Report, Lowered Outlook: Retail Investors Left Bitter

Shares of American confectionary major Hershey Co ($HSY) were trading in the red on Thursday after the firm reported third-quarter results that fell short of Wall Street expectations and revised down its full-year outlook.

Consolidated net sales declined 1.4% year-over-year (YoY) to $2.99 billion, below an analyst estimate of $3.08 billion. Earnings per share (EPS) came in at $2.34 versus an estimate of $2.56. Net income fell 13% YoY to $446.3 million.

The firm’s margins took a hit during the quarter, declining 360 basis points to 41.3%, driven by higher commodity costs, unfavorable input cost timing, fixed cost deleverage, and unfavorable mix that more than offset net price realization.

Hershey’s North America Confectionery segment net sales grew 0.8% to $2.48 billion during the quarter while North America Salty Snacks segment’s net sales declined 15.5% to $291.8 million. The firm’s International segment sales decreased 3.9% to $218.4 million.

Investors were also disappointed with the firm’s revised outlook for the full-year earnings. It now expects net sales growth to remain flat compared to a previous guidance of a 2% growth. Adjusted EPS is expected to be down mid-single digits compared to a marginal drop expected earlier.

CEO Michele Buck acknowledged that the company’s results this year so far have been affected by historically high cocoa prices and a challenging consumer environment. “Our priorities are to drive top-line and market share growth by winning in-store with key customers, expanding our chocolate portfolio, accelerating sweets, and maximizing our seasonal strength,” Buck said.

Following the announcement, retail sentiment on Stocktwits fell to a one-year low into the ‘extremely bearish’ territory (8/100) from ‘neutral’ a day ago, accompanied by high retail chatter.

Retail users on Stocktwits are expressing disappointment on the stock following the earnings release.

Shares of the firm have lost over 9% since the beginning of the year.

Also See: Zillow Stock Rockets 22% Following Strong Earnings: Retail Stays Exuberant

For updates and corrections email newsroom@stocktwits.com