Confectionery giant Hershey has raised its annual forecasts for sales and profit after posting better-than expected results, benefiting from strong demand for its chocolates and candies during what it said was its 'biggest ever' Halloween season.
Demand for the company's products such as Reese's Peanut Butter Cups and KitKat chocolates strengthened around the October holiday after the pandemic curtailed trick-or-treating events last year.
"As we head into the final days of Halloween, sales and sell through are both looking strong," chief executive Michele Buck said. "We expect this strength to flow into the holiday season as more family gatherings occur this year."
The company said category sales in early and mid-season rose 18% compared with last year, and 12% versus 2019, with trick-or-treat participation also expected to rebound to pre-pandemic levels.
Halloween Spend Increases
Consumer spending on Halloween-related items is anticipated to reach an all-time high of $10.14 billion (€8.69 billion) this year, versus the $8.05 billion in 2020, according to a National Retail Federation survey.
Like other packaged food makers, Hershey has been raising prices in recent months to offset rising costs for raw materials and freight due to global supply chain disruptions triggered by the pandemic.
The chocolate maker said elevated consumer demand was expected to offset the higher costs.
Hershey forecast 2021 net sales to grow 8% to 9%, higher than its previous range of growth between 6% and 8%.
It also expects adjusted earnings per share to range between $6.98 and $7.11, higher than the prior $6.79-$6.92 outlook.
Net sales rose about 6.3% to $2.34 billion (€2.00 billion) in the third quarter, compared with estimates of $2.33 billion, according to Refinitiv IBES data.
"We are raising both sales and earnings guidance for 2021 to reflect elevated consumer demand across markets, an improved tax outlook and optimized brand investment, which, collectively, are expected to more than offset higher supply chain costs and inflation," said Buck.
Last month, Hershey and Barry Callebaut announced an extension of their supply agreement.