By Savyata Mishra
July 30 (Reuters) - Hershey reported second-quarter sales and profit that exceeded Wall Street estimates on Thursday, driven by higher prices and robust demand for its Reese's chocolates and Dot's Pretzels despite a challenging spending environment.
The confectionery maker has spent the past year raising prices to counter elevated cocoa costs, leaving investors focused on the resilience of demand for its chocolate products.
The better-than-expected results were largely due to a 12%
jump in prices in the quarter, offsetting an 8% decline in overall volumes as shoppers remained value-conscious.
Sales in North America Confectionery, the company's largest business, rose 4.2% year-on-year during the reported quarter, while North America Salty Snacks sales increased 22.9%.
"Hershey is navigating a dynamic environment where the company is taking pricing whilst cocoa commodity costs are improving," RBC analyst Nik Modi said.
The results follow a stronger-than-expected quarter from rival and Cadbury parent Mondelez earlier this week.
Hershey said demand trends in its confectionery business should improve gradually as commodity inflation eases and consumers adjust to prior price increases.
It pointed to momentum in brands including Hershey's, Jolly Rancher and other premium offerings, as well as a slate of product launches and seasonal promotions planned for the second half.
Hershey raised the lower end of its 2026 sales and profit forecast ranges and now expects net sales growth of 4.5% to 5.0% this year, largely in line with analysts' expectations.
It forecast adjusted earnings per share of $8.36 to $8.52, the midpoint of which is slightly below analysts' estimate of $8.48 per share.
"U.S. consumer sentiment remains soft, and shoppers continue to be value-oriented and selective in their spending," CEO Kirk Tanner said in prepared remarks.
Shares of the company fell about 1% in early trading.
Net sales rose 6.6% to $2.79 billion in the quarter ended June 28, topping analysts' estimate of $2.63 billion, according to LSEG data.
Adjusted earnings came in at $1.90 per share, well above the expectation of $1.42 per share.
(Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)
