Major American chocolate company Hershey’s Chocolate has reduced its profit forecast for the year. The company says that its sales have been hurt by weak demand for chocolate in North America, as well as higher market costs associated with the upcoming holiday season.
For the third quarter of this year, Hershey says that it had lower sales than expected because of a decline in the demand for candy, mint and gum. There products accounted for 90% of a United States retail sales for the quarter.
Meanwhile, the company also says that some retailers are reducing their marketing, and fewer shoppers are going to physical stores, as some people have started shopping online.
Perhaps most troubling for Hershey is that consumer preferences are shifting away from candy and other sugary snacks and towards healthier foods. As a result, retailers are more likely to market healthier goods than traditional Hershey’s products.
Internationally, the company has been harmed by slow economic growth in China. In China, the world’s second largest economy, Hershey’s Kisses are said to be a popular gift item.
Overall, Hershey says that it predicts its sales to be stagnant or only slightly up. Earlier this year in August, the company said that it predicted sales growth by up to 2.5%.
Meanwhile, net income for Hershey fell to $154.8 million, which was just 70 cents per share.
Additionally, net sales remained virtually flat at $1.96 billion. This was just short of the $2 billion expectation.
The company expects profits for the upcoming quarter to be $4.10 per share, which is lower than it had stated earlier in the year.
Lately, shares for the company have been down. This is largely because of its lackluster performance. Shares are currently trading at a little under $92.