© Reuters. FILE PHOTO: An employee shows a Hershey’s chocolate bar made in USA in the “American lifestyle” store in Berlin, Germany, August 13, 2018. REUTERS/Fabrizio Bensch/File Photo
(Reuters) -Hershey beat Wall Street expectations for quarterly sales on Thursday, riding on benefits from higher prices of its chocolates and candies.
Shares of the 129-year-old company rose about 2% before the bell.
When supply chain disruptions and the Russia-Ukraine war pushed up prices of everything from transport to commodities like sugar, many packaged food companies including Hershey raised the prices of their products to offset the impact of these rising costs.
However, several rounds of price hikes in the last two years have now hit demand and customers have started to push back on pricier consumables like chocolates and candies at a time when they struggle with higher interest rates and grocery prices.
Overall organic prices rose by 9.8% in the third quarter, while organic volumes increased by only 0.9%.
The company’s net sales rose to $3.03 billion in the quarter ended Oct. 1, from $2.73 billion a year earlier. Analysts on average had expected $2.95 billion, according to LSEG data.