Hershey To Raise Prices, Cut Full-Year Profit Outlook

Hershey, PA (AHN) - Hershey Co. announced Friday a plan to raise product prices by 11 percent as ever-increasing costs led the company to reduce profit targets for the year.

The candy and chocolate maker said it will raise prices across its entire domestic portfolio of products. The company said the increases will be immediate as it struggles to offset the rising price of sugar and cocoa.

"Commodity costs have been volatile over the last several years and continue to remain at levels that are well above historical averages," Hershey's President and Chief Executive David J. West said, according to the Associated Press.

Hershey said it now expects earnings for 2008 to be at the lower end of the $1.85 to $1.90 a share forecast it previously offered. It also expect sales volume in the fourth quarter to be lower than originally forecast due to the price increases.

The company also revised 2009 sales growth expectations to 2 or 3 percent, from original estimates of 3 to 5 percent growth.

Shares of Hershey fell 5.8 percent to $39.20 in Friday afterhours trading.