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The cocoa crisis doesn’t appear to be keeping Hershey from “sharing goodness,” nor raising its prices.
Hershey stock was up slightly in Friday afternoon trading, after the company reported nearly a 9% increase in sales for its first quarter, primarily due to higher prices, it said in its earnings report.
“While we are experiencing unprecedented volatility in our largest commodity, we are focused on executing the things within our control with excellence,” said Michele Buck, Hershey’s CEO during the company’s earnings call on Friday.
Even with inflation keeping customers weary of spending on everything from fast food to clothing, the Pennsylvania-based company is still seeing a demand for its chocolates and candy. It said it benefited from the Valentine’s Day holiday season the most this year, with sales up 6.5%. Meanwhile, its Easter sales were slightly lower than it expected.
The demand buoyed Hershey’s, and helped it beat Wall Street’s expectations. For the first quarter, it generated revenue of $3.25 billion, about $3.07 earnings per share. Analysts forecasted it would earn $3.11 billion, approximately $2.76 earnings per share, according to FactSet.
That sweet outlook comes at a time when cocoa prices have soared. In March, spot prices for cocoa reached nearly $10,000 a metric ton as plant diseases and droughts ravaged West Africa. More than a month later, cocoa prices have eased, trading below $8,000 a metric ton.
But even so, the company is planning ahead, Hershey’s Buck said during the earnings call. “Cocoa is critical to our long-term business resilience and success, and as such, we have dedicated resources and strong investments in place to ensure we have a resilient supply chain for the future,” she said.