Hershey announces job cuts, issues profit warning

STORY: Shares of Hershey jumped as much as nearly 8% Thursday morning, after the confectionery giant announced a new two-year restructuring program that it said would generate about $300 million in pre-tax savings.

The stock initially fell in the pre-market after the candy maker forecast sales and profit for this year that was below Wall Street expectations.

But shares reversed course after the market opened as Hershey outlined the restructuring plan, which it said will impact less than 5% of the company's workforce.

Hershey said sales in the fourth quarter of 2023 missed estimates as inflation-weary customers cut back spending on the company's expensive chocolates and candies.

Cadbury chocolate maker Mondelez International also posted a drop in volumes for the fourth quarter as price hikes deterred customers from spending on its products.

One analyst tells Reuters consumers are spending less during non-seasonal periods.

Hershey CEO Michele Buck said the company expects higher cocoa prices to limit its earnings growth in 2024.