The Hershey Co. posted good results for the most recent quarter, but executives warn that they may not be able to fill demand for upcoming holidays.
Net sales were up 19% to $2.37 billion, and net income was up 5.5% to $315.6 million, in the second quarter compared with the same period last year. Hershey has raised its guidance for the full year from sales and earnings growth of 10% to 12% up to 12% to 14%.
Sales increased across all of Hershey’s major segments year-over-year. North American confectionery was up 13%, international up 21%, and salty snacks almost doubled, buoyed by the acquisition of Dot’s and other businesses.
However, CEO Michele Buck noted that the company will face a challenge in fulfilling holiday demand. She said at an earnings call that the company expects strong growth for Halloween and the winter holidays, but added, “Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints.” The problem is that many of Hershey’s regular and seasonal products are made on the same processing lines, and production has to be balanced to improve availability of regular products while building inventory for the holidays.
