Record cocoa prices heading into Valentines Day proves to be a headache for sweets king Hershey
Hershey is cautioning on its 2024 profit growth as the company contends with rising cocoa costs that are leading to increased prices for chocolate
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Hershey is cautioning on its 2024 profit growth as the company contends with rising cocoa costs that are leading to higher prices for chocolate.
Cocoa futures prices have doubled over the past year and hit an all-time high of $5,874 per metric ton on Friday. Bad weather in West Africa is being blamed for damaging crop yields, which is pushing cocoa prices higher.
“The magnitude and pace of recent price increases seem to be unprecedented,” wrote Citi analyst Thomas Palmer.
With less than a week to go until Valentine's Day, chocolate is on the minds of many consumers. But with inflation concerns still top of mind, many shoppers are pulling back on their spending and eyeing rising food prices cautiously.
Still, Hershey CEO Michele Buck is trying to ease consumers' minds.
“Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business,” Buck said during the company’s quarterly earnings conference call.
Hershey Co. anticipates its full-year earnings per share being relatively flat, partly due to higher cocoa and sugar costs.
Margins may also face some pressure.
“The confection business is going to bear the brunt of the margin impact due to cocoa,” Chief Financial Officer Steven Voskuil said on the call.
Hershey's stock ended Friday down 3.4%.