由于干旱和不稳定的降雨以及全球主要可可产区的作物病害导致供应减少，近期可可价格飙升，这可能给这些公司带来更多麻烦。Hershey and Mondelez will announce first-quarter results this week.
The Zhitong Finance App learned that two chocolate producers, Hershey (HSY.US) and MDLZ.US (MDLZ.US), will announce their first-quarter results this week, and investors will pay close attention to how they deal with the recent sharp rise in cocoa and sugar prices.
The two companies have been struggling to cope with rising costs over the past few quarters, and they have passed on some of the cost increases to consumers by raising prices.
Recent spikes in cocoa prices due to droughts and erratic rainfall, as well as crop diseases in major cocoa-growing regions around the world have reduced supply, which could cause more trouble for these companies.
Furthermore, sugar prices have also risen sharply in recent months.
Sean King, an analyst at Columbia Threadneedle Investments, said, “Many investors are watching and wondering how consumers are reacting to the current chocolate prices in the market and how this will affect the two companies' decisions to raise prices in the future.” The company also holds shares in Hershey and Mondelez.
Cocoa prices have almost tripled this year, according to Jefferies data. Cocoa currently accounts for about 20% and 10% of Hershey's and Mondelez sales costs (COGS), respectively.
Cocoa prices have soared in the past year
Arun Sundaram of CFRA Research said: “Normally, these companies first bear the higher cost of cocoa before raising prices to retail customers.” He added that prices are likely to strengthen in the second half of the year.
According to data from market research firm Circana, in the 13 weeks ending March 24, US chocolate sales fell 1.8%, while prices rose 6.3%.
“The big question is whether the price-related increase will be enough to offset the drop in sales we might see this year,” Sundaram noted.
What about the fundamentals?
Mondelez will announce its latest quarterly results on April 30. The market expects the company's sales to remain flat, with earnings per share falling slightly to 89 cents for the first time in 14 quarters.
Mondelez's organic sales increased 1.3% in 2023, while prices rose 13.4%.
Hershey will release its earnings report on May 3. The market expects quarterly sales to increase by 4.2%, and earnings per share will fall for the first time in 25 quarters to $2.76.
Hershey's organic sales fell 1.3% in 2023, while prices rose 8.3%.
What do you think of Wall Street?
Mondelez's stock price has fallen 4.3% over the past year, and Hershey's stock price has fallen by nearly 32%.
Mondelez's stock price has performed better than in the past year
Overall, Wall Street analysts gave Yizi a “buy” rating, with an average target price of $82; the average target price for Hershey was $208.
