Chilling Thing Hershey Just Said About American Consumers

[marmar]

Chilling Thing Hershey Just Said About American Consumers
by Wolf Richter • October 29, 2015


When sweets-maker Hershey reported third quarter earnings on Wednesday, it left a bitter aftertaste: for the fifth quarter in a row, it cut its forecast. As JPMorgan analyst Kenneth Goldman put it during the call: “It feels like every quarter, something unexpected starts to bite.”

Sales were down slightly, though year-to-date sales were still up 1.2%, a sign the trend is getting more “challenging.” Versions of that word cropped up eight times during the call.

“Headwinds” cropped up four times, “tough” or “tougher” three times. “Macroeconomic” was dragged out eight times, usually in conjunction with “environment” – as in “given the macroeconomic environment” – but also with “challenges” and “winds,” as in CEO John Bilbrey’s elegant, “It’s been unusual in 2015, been some macroeconomic winds.”

CFO Patricia Little was able to put them into one sentence (earnings call transcript via Seeking Alpha): “Lower consumer trips and the macroeconomic environment continue to be a challenge within the retail environment….”

Upon these kinds of encouraging words, shares plunged 6.5% for the day and are off 20% from their high in January. ....................(more)

http://wolfstreet.com/2015/10/29/chilling-thing-hershey-just-said-about-american-consumers/

[Erich Bloodaxe BSN]

1. Maybe more and more consumers are hearing that they're sourcing cocoa from West Africa, notorious

for it's child slave labour on cocoa farms.

ETA - original article worth a read, points the finger more at the 1%-99% split.

[marmar]

2. Perhaps, but the larger issue is dwindling disposable income.

[Erich Bloodaxe BSN]

3. Yeah, just edited my comment after reading the article. nt

[daleanime]

4. True....

[roody]

6. +1

[liberal N proud]

5. Those catch words must be used by all the corporate earning report writers

It's sounds like the same bullshit we here from our earning reports every quarter. It gives them opportunities to enhance their resources (fewer manufacturing facilities or just fewer human resources).

Been through it so many times, it becomes a broken record and every time a communication from the leadership comes down, you can play catch word bingo.

Consumers may not being buying less, they are just buying less in the retail stores and companies that sell impulse items like candy are going to feel the pain!

The industry I am in is suffering from the same thing in addition to some changes in electronics that changes the needs for some of our products.

[Demeter]

7. I get mad every time they shrink the bar size