Chocolate giant Hershey (HSY) has managed to report better-than-expected first-quarter financial results despite the price of cocoa reaching all-time highs in recent months.
The Pennsylvania-based company behind Kit Kat chocolate bars and Milk Duds candy reported earnings per share (EPS) of $3.07 U.S., which was much better than the $2.76 U.S. forecast on Wall Street.
Revenue in the quarter totaled $3.25 billion U.S., topping consensus expectations of $3.10 billion U.S.
The company attributed the results to higher prices, which it has passed onto consumers as cocoa prices have skyrocketed.
A combination of drought, flooding and disease has wiped out the cocoa crop in West Africa over the last year, pushing up cocoa prices to a record high above $10,000 U.S. per ton.
The price of cocoa has declined in recent weeks to around $8,000 U.S. a ton as commodities traders exit their positions in chocolate’s active ingredient.
The drop in cocoa prices provides some relief to Hershey, which maintained its forward guidance for this year.
The company continues to call for earnings to be flat in 2024 versus 2023, and for sales to grow by 2% to 3% this year. The guidance largely matches Wall Street’s outlook.
Hershey’s stock has declined nearly 30% over the last 12 months to trade at $195.88 U.S. per share.
