By Juveria Tabassum
Oct 29 (Reuters) - Hershey on Thursday warned that increased pressure on shoppers due to gas prices, inflation and interest rates could impact how much consumers spend on candy this Halloween.
The company's shares fell 1% after it lowered its annual organic net sales growth target to about 3%, citing weakness in channels such as convenience stores, where customers were budgeting for higher gas prices.
The Milk Duds maker was banking on last-minute shoppers looking for bulk packs
of candy ahead of Halloween on Saturday, October 31, executives said on a post-earnings call.
"Now we need consumers to show up, we need them. The last few days are really critical," said Hershey CEO Kirk Tanner.
A 51.03-ounce pack of Hershey assorted Halloween candy with 165 pieces cost about $23.87 on Walmart's website as of Thursday morning.
Toblerone parent Mondelez International reports quarterly results after markets close on Thursday.
CANDY DEMAND SOFTER AT CONVENIENCE STORES
Hershey said sales of candies, gums and mints at US convenience stores declined nearly 5% from a year earlier in September, with the weakness continuing into October.
"Halloween participation is expected to be in line with 2025, though financial pressures could shape final purchase decisions," Tanner said.
Hershey is betting on fresh offerings like Hershey Crème Filled Bars and Reese's Oreos to boost demand, alongside more marketing efforts to drive demand in the season and into 2027.
Consumers were approaching Halloween with affordability in mind and were expected to spend about $13.5 billion — similar to last year's $13.1 billion, according to a survey from the National Retail Federation.
VOLUMES FALL AGAIN, NO PRICE CUTS IN SIGHT
Net price was up 11% in the reported quarter, while organic volume declined about 7%, following a pattern across several quarters, but Hershey was not looking at overall price cuts to drive volume.
Instead, executives said it would look to promotions and different pack sizes to meet consumers' need for affordability.
Higher freight costs, inflation and consumer pressures have become more challenging and could "restrain" earnings growth in 2027, Hershey warned.
The company's third-quarter net sales of $3.28 billion edged past estimates of $3.25 billion, according to data compiled by LSEG.
Hershey also raised its annual earnings per share growth target, citing tariff refunds and deflation in cocoa prices.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Jonathan Ananda)
