In a call with investors Thursday, Hershey CEO Michele Buck said the company won’t be able to meet demand as Halloween and the holiday season approach.
She said the snacks company had about 10% more inventory this year than last, but supply chain issues continued to hamper inventory.
“Seasonal consumer engagement is expected to remain high, and we expect high single-digit sales growth for our Halloween and holiday seasons,” Buck said. “Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints.”
Buck said the company is taking steps to address inventory shortages.
“As trends began to improve and the labor market became increasingly difficult, we struggled to effectively bring production back to our historic levels,” Buck said. “We have taken many steps to address these issues, including deploying lean manufacturing expertise and teams in the factory, and streamlining the portfolio to reduce complexity and increase production. We are seeing improvements every week, and this will remain a key area for our supply chain teams until our production and service levels are optimized.
Buck said inflation has also impacted business. She said more customers choosing to eat at home rather than in restaurants could increase demand. However, she noted that higher prices affect Hershey’s costs.
“We recognize that inflation is putting pressure on many Americans, and we remain committed to ensuring our products remain an affordable treat,” Buck said. “We expect approximately 20% of our products to continue to retail at $2 or less, and we will continue to provide innovative offerings at a wide range of price points to meet the needs of our consumers.”