Hershey(HSY) ZACKS·2024-11-06 14:25Core Insights - The Hershey Company (HSY) is expected to report revenue growth of 1.4% year-over-year, with a consensus estimate of 2.50 per share, indicating a decline of 3.9% from the previous year [1] Revenue and Earnings Expectations - The revenue estimate for Hershey reflects a modest growth trajectory despite challenges in consumer spending [1] - The earnings estimate suggests a potential decline, contrasting with the revenue growth expectations [1][3] Factors Impacting Performance - Hershey's sales have been negatively affected by a slowdown in discretionary spending, particularly in convenience stores, which traditionally contributed to strong sales [3] - The company faces pressure on its gross margin due to rising input costs, which are outpacing the benefits from price increases and productivity improvements [4] - An adjusted gross margin contraction of 230 basis points to 42.6% is anticipated for the upcoming quarter [4] Segment Performance - Despite the overall challenges, the confectionery segment is expected to show resilience, with projected sales growth of 4.6% in North America for Q3 2024 [5] - Innovations and effective pricing strategies are contributing positively to Hershey's portfolio strength [5] Earnings Prediction - Current models do not predict an earnings beat for Hershey, with a Zacks Rank of 4 (Sell) and an Earnings ESP of -1.89% [6]