Hershey (NYSE:HSY) lowered its annual organic net sales growth forecast on Thursday, citing financial pressures on consumers that could affect spending on Halloween candy. The company’s shares declined approximately 1% following the announcement.
The confectionery manufacturer reduced its organic net sales growth target to approximately 3%, pointing to reduced demand in convenience stores as consumers adjusted their budgets to account for higher gasoline prices, inflation and interest rates.
Hershey reported third-quarter net sales of $3.28 billion, slightly above analysts’ consensus estimate of $3.25 billion, according to LSEG data.
Halloween Candy Sales Face Consumer Spending Pressures
Hershey executives said the final days before Halloween on Saturday, October 31, would be important for seasonal candy purchases, particularly among consumers buying larger packages shortly before the holiday.
Chief Executive Officer Kirk Tanner commented during the company’s earnings call:
“Now we need consumers to show up, we need them. The last few days are really critical.”
Tanner also said:
“Halloween participation is expected to be in line with 2025, though financial pressures could shape final purchase decisions.”
According to a National Retail Federation survey, U.S. consumers were expected to spend approximately $13.5 billion on Halloween, compared with $13.1 billion the previous year.
As an example of current retail pricing, a 51.03-ounce assortment of Hershey Halloween candy containing 165 pieces was listed at approximately $23.87 on Walmart’s website on Thursday morning.
Convenience Store Candy Sales Decline Nearly 5%
Hershey reported that sales of candy, gum and mints at U.S. convenience stores fell nearly 5% year over year in September, with the decline continuing into October.
The company attributed part of the slowdown to consumers allocating more of their spending toward gasoline and other essential expenses.
Convenience stores were identified as a particularly affected retail channel, contributing to Hershey’s decision to reduce its annual organic sales growth forecast.
To support demand, the company plans to increase marketing activity and introduce products including Hershey Crème Filled Bars and Reese’s Oreos, with promotional efforts extending into 2027.
Higher Prices Accompany Declining Sales Volumes
Hershey reported an 11% increase in net pricing during the third quarter, while organic sales volume declined approximately 7%.
The figures continued a pattern of higher selling prices and lower volumes observed over several quarters.
Executives indicated that the company was not planning broad price reductions to increase sales volumes.
Instead, Hershey intends to use promotions and alternative package sizes to address consumer affordability concerns.
The company also identified higher freight costs, inflation and pressure on household budgets as factors that could limit earnings growth in 2027.
Third-Quarter Revenue Exceeds Estimates as Earnings Outlook Rises
Hershey reported third-quarter net sales of $3.28 billion, exceeding the $3.25 billion consensus estimate.
Despite reducing its organic net sales growth forecast to approximately 3%, the company increased its annual earnings per share growth target.
Hershey attributed the revised earnings outlook partly to tariff refunds and declining cocoa prices.
The company’s updated guidance reflects expectations for lower organic sales growth alongside changes in input costs and other factors affecting profitability.
Meanwhile, fellow confectionery manufacturer Mondelez International (NASDAQ:MDLZ), the parent company of Toblerone, was scheduled to report its quarterly results after Thursday’s market close.