Hershey Co., hampered by sluggish chocolate sales in China, on Friday lowered its sales and earnings targets for the year and announced plans to cut about 300 jobs.
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The maker of America's top-selling chocolate brand, Reese's, as well as its namesake candy bar, cited lower-than-expected chocolate growth in China in April and May. The candy company also has been struggling with sluggish sales in certain U.S. stores and international markets lately, on top of rising costs for ingredients such as dairy and cocoa.
Shares of Hershey, down 11% this year, fell 2.4% to $90.02 a share in premarket trading.
As part of its efforts to grow its international business, Hershey said its finance chief, Patricia Little, would now head up mergers and acquisitions.
"M&A will continue to be an important driver of Hershey's future success, " Hershey said in a release.
In January, Hershey announced plans to buy Krave Pure Foods Inc., a maker of premium beef jerky, giving the candy company a taste of the emerging meat-snack market.
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Hershey said it is also reassessing the value of Shanghai Golden Monkey, including the remaining 20% that the U.S. company is scheduled to buy in September. Hershey agreed to buy the Chinese candy maker in late 2013 for nearly $500 million.
For the year, Hershey said it now expects sales to grow 2.5% to 3.5%, down from its previous forecast for 4.5% to 5.5% growth. The forecast includes a benefit of 1.5 percentage points from acquisitions and divestitures and a hit of 1.5 percentage points from foreign exchange.
The company had cut the forecast in April, as foreign-currency impacts and softness in China weighed on results in its first quarter.
Excluding the impact of currency, sales are expected to increase about 4% to 5% this year, down from its previous forecast for 6% to 7% growth.
The company also slashed its adjusted earnings forecast to $4.10 a share to $4.18 a share, down from its previous forecast of $4.30 a share to $4.38 a share.
As a result of its streamlining efforts, Hershey said it expects to save $65 million to $75 million, mostly in 2016. But the company said it would take charges of $100 million to $120 million, or 29 cents to 35 cents a share, related to the job cuts. Hershey said it would offer buyouts to employees first.
"Removing cost and complexity from our business will make us more flexible to quickly react to changing consumer and competitive marketplace trends," Chief Executive John P. Bilbrey said in a news release.