Hershey Dips As It Cuts Outlook Again, Citing China Woes

Hershey Co HSY dipped nearly 4 percent Friday after the company once again trimmed its outlook for growth, citing slow sales in China.

The confectionary company, which had lowered its outlook in April on disappointing results in China, also unveiled a cost-cutting plan Friday that will shed about 300 workers this year aimed at saving $65 million to $75 million, mainly in 2016.

Hershey, which employed about 20,800 full-time workers as of December 31, said the restructuring will require charges of between $0.29 and $0.35 a share, most of which will be taken in 2015.

An economic downturn in China is "affecting consumer shopping behavior" according to Hersey, which said chocolate growth in China was below expectations in April and May.

The company is also endeavoring to reassess the value of its Golden Monkey Food Joint Stock Co. unit.

Hershey is slated in September to pay $98 million to acquire the remaining 20 percent stake in Golden Monkey. Hershey paid $394 million to acquire its current stake in September 2014.

Hershey on Friday cut its 2015 net sales growth forecast to between 2.5 percent and 3.5 percent, from its April forecast of between 4.5 percent and 5.5 percent.

The company now expects 2015 adjusted earnings of between $4.10 and $4.18 a share, up about 4 percent from a year earlier.

Wall Street on average expects 2015 earnings of $4.31 a share on revenue of $7.77 billion.

Hershey, off about 14 percent year-to-date, traded recently at $89.05, down $3.21.