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Posted by Daniel Workman Jul 20, 2007 |
Some analysts chose to focus on the fact that Hershey made only US$3.6 million or a penny a share for the latest quarter ending July 1.
Sure that's a steep decline from the US$97.9 million profit or 41 cents a share in the same period last year. But the fact is that Hershey has invested heavily to upgrade its production lines and to promote a growing portfolio of over 50 world-class brands of chocolate. Hershey is also building up its online chocolate sales, which also takes both time and money.
Excluding what Hershey spent on changes to its production and supply chain processes, the company would have made $81.7 million or 35 cents a share. Revenue was consistent at $1.05 billion.
Face it. Hershey is changing its focus to premium dark chocolate made from the best cocoa beans imported from the top cocoa exporting countries. Chocolates with higher percentage cocoa content demand loftier prices from the growing cohort of wealthy baby boomers around the world.
It should not be surprising that a gargantua like Hershey needs time to transition its well-established brands to the more sophisticated tastes of premium dark chocolate lovers.
That Hershey has announced an entry into the fast-growing gourmet chocolate market with Starbucks-branded chocolates shows foresight into, and the ability to keep up with, worldwide demand for premium dark chocolate.