HERSHEY, Pa. (AP) — Hershey's expansion into China hasn't been so sweet.
The maker of Reese's peanut butter cups, Twizzlers licorice and other candies and chocolates said sales in China during the country's New Year holiday were weaker than it expected. Sales in China fell 47 percent in its first quarter from the same period a year ago. That number excludes sales of Golden Monkey products, a Chinese food company that Hershey bought a controlling stake in late last year.
Hershey said a slowdown in China's economy is keeping people from buying its goods. It will expand into more Chinese cities and will increase taste tests in stores.
Shares of The Hershey Co. fell $3.61, or 3.7 percent, to $94.72 in morning trading Thursday.
The Hershey, Pennsylvania-based company also posted disappointing financial results for its first quarter Thursday, and cut its sales growth outlook for the year.
It reported first-quarter earnings of $244.7 million, or $1.10 per share. Earnings, adjusted for non-recurring gains, were $1.09 per share. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.15 per share.
Hershey posted revenue of $1.94 billion in the period, also missing Wall Street forecasts. Four analysts surveyed by Zacks expected $1.96 billion.
It now expects revenue to rise between 4.5 percent and 5.5 percent, down from its previous forecast of a 5.5 percent to 7.5 percent rise. Analysts expected revenue to rise 5.8 percent to $7.86 billion. The company kept its earnings outlook for the year unchanged from its previous forecast. It expects full-year earnings in the range of $4.30 per share to $4.38 per share. Analysts expected earnings of the year of $4.35 per share.
Hershey said it will be introducing new products this year, including Kit Kat White Minis and Hershey's Caramels. In March, Hershey bought jerky maker Krave in an effort to add protein to its product lineup.