Dive Brief:
- Hershey is raising prices by 8% for its candies, citing rising costs for ingredients and transportation.
- The maker of brands such as Reese's Peanut Butter Cups, Krackel, and the eponymous chocolate bar said spot prices for commodities such as cocoa and dairy have "have increased meaningfully since the beginning of the year."
- Hershey also suggested that rising costs will hurt its numbers. The company said it now expects both sales growth and earnings growth to be near the low end of previously estimated ranges.
Dive Insight:
When Hershey reported earnings in late April, it said it was confident that it would meet its projections for the rest of 2014, despite the tough pricing environment.
Something, obviously, has changed in recent weeks. But besides the price of commodities, it's unclear what or to what degree. But Wall Street seemed to take the news in stride: Share prices were flat to slightly higher in after-hours trading.