Hershey’s may run out of Halloween candy: CEO

No kisses for you!

In an announcement scarier than Chucky’s nuptials, Hershey revealed in a second-quarter earnings call that its chocolate delights might be in short supply come Halloween.

Hershey CEO Michele Buck predicted that supply chain issues, production capacity and other factors will crimp availability, making it tough to supply candy during this year’s holiday season, starting in late October.

“We will not be able to fully meet consumer demand,” Buck warned on the call, according to CNN.

Everything from increased candy demand amid coronavirus-induced lockdown stress, to the war in Ukraine, to pandemic-wrought supply-chain issues, to production capability at home, was having an impact, she said.

Cocoa supplies, as well as those for edible oil and other ingredients, are crunched because of global supply chain disruptions from the pandemic and the Russia-Ukraine war, Reuters noted. The situation forced Hershey and other manufacturers to seek alternate sources, at higher cost — cost that they’ll take out of consumers’ hides.

In terms of its own production process, Hershey has one set of manufacturing lines for regular and seasonal products, meaning it must choose between everyday demand, and holiday production, CNN said.

“We had a strategy of prioritizing everyday on-shelf availability,” Buck said on the analyst call. “That was a choice that we needed to make. It was a tough decision.”

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The company is adding manufacturing lines, CNN reported, in an effort to meet heightened demand that appears to be holding steady.

Halloween marks the candy maker’s busiest time of year, furnishing about 10% of the company’s annual sales, Reuters noted. Besides famed Hershey’s Kisses, Reese’s Peanut Butter Cups and other chocolaty treats, the company makes Twizzlers, Jolly Ranchers and Kit Kat bars, among many other snacks.

Supply-chain setbacks notwithstanding, Hershey beat Wall Street earnings predictions, reporting a second-quarter profit of $315.6 million, or $1.53 per share, with adjusted earnings of $1.80 per share, a 22.4% increase over the same period last year.

Net sales rose 19.3%, to $2.37 billion for the quarter ended July 3, higher than analysts’ predictions of $2.22 billion, Reuters said.

The company’s outlook was equally sweet, with Buck foretelling increased sales fueled by price increases. Hershey expects this year’s sales to top last year’s despite price hikes for consumers.

“Historically, Hershey’s sales growth has been driven by higher prices and not necessarily volume,” Arun Sundaram, a research analyst with the Center for Financial Research and Analysis, told Reuters. “The company is entering this period from a position of strength with that expertise.”