Bad News Chocolate And Coffee Lovers: Prices Are Only Going Higher
Portfolio Pulse from Aaron Bry
Coffee and cocoa bean prices are surging due to supply concerns, with New York cocoa futures reaching their highest levels since the 1960s. Extreme weather conditions, aging trees, and steady demand are driving prices up. Hershey Co (HS) and Starbucks Corp (SBUX) are facing higher operating costs, impacting their stock prices negatively. Hershey's stock is down over 5% in the last month, while Starbucks' stock has fallen more than 7%. The rise in commodity prices, including copper and gold, is also noted.
April 13, 2024 | 1:49 pm
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NEGATIVE IMPACT
Hershey Co faces higher cocoa prices, impacting earnings and causing a stock price decline of over 5% in the last month.
Hershey Co's stock decline is directly linked to the rising costs of cocoa, a key input for their products. The company's efforts to manage chocolate bar prices amidst these rising costs suggest significant pressure on earnings, leading to a negative short-term impact on the stock.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Starbucks Corp is experiencing higher operating costs due to increased coffee prices, contributing to a stock decline of more than 7% in the last month.
Starbucks Corp's stock performance is negatively affected by the rising costs of coffee. As a major expense for the company, these increased costs are likely to pressure earnings and contribute to the stock's underperformance in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90