Your Chocolate Cravings May Get Costlier: Cocoa Shortage Sends Prices Skyrocketing To All-Time Highs
Portfolio Pulse from Benzinga Neuro
Cocoa prices have doubled in the past year, reaching a record high of $5,600 a metric ton due to extreme weather conditions in West Africa, impacting production. This surge is expected to increase chocolate prices, affecting manufacturers like Hershey Co (HSY), which has already warned of potential earnings growth impediment in 2024 due to historic cocoa prices. Hershey's recent earnings report showed stable Q4 earnings amid slow sales growth and rising cocoa costs.
February 09, 2024 | 7:54 am
News sentiment analysis
Sort by:
Descending
NEGATIVE IMPACT
Hershey Co faces potential earnings growth challenges in 2024 due to the historic high cocoa prices, as indicated in its recent earnings report. The company reported stable Q4 earnings amid slow sales growth and rising cocoa costs.
The doubling of cocoa prices directly impacts Hershey's cost of goods sold, as cocoa is a primary raw material for chocolate manufacturing. The company's warning about potential earnings growth challenges in 2024 due to these high prices, along with the analyst's caution regarding margin pressure, suggests a negative short-term impact on Hershey's stock price. The recent earnings report showing stable earnings amid rising cocoa costs further supports this analysis.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100