The company, which makes Hershey Kisses and Reese's peanut butter cups, also said profit fell 65 percent in the fourth quarter, hit by charges for the overhaul of its supply chain, impairment charges in its Brazil operations and flat sales.
CHICAGO (Reuters) - Hershey Co <HSY.N> on Thursday forecast a drop in 2008 earnings as it tries to fix its U.S. candy business, which has been losing market share to rival Mars Inc, while it also copes with rising costs.
The company, which makes Hershey Kisses and Reese's peanut butter cups, also said profit fell 65 percent in the fourth quarter, hit by charges for the overhaul of its supply chain, impairment charges in its Brazil operations and flat sales.
The company's primary goal in 2008 is to stabilize its U.S. business. Hershey plans to spend more on marketing and new products, including a new line of chocolates developed with Starbucks Corp <SBUX.O>, David West, the company's new chief executive, said in a release.
For 2008, the company forecast a 3 percent to 4 percent increase in sales and said earnings would be $1.85 to $1.90 before one-time items. The company reported earnings of $2.08 on that basis for 2007 and analysts on average forecast $2.16 a share for 2008.
!ADVERTISEMENT!Hershey's profit was $54.3 million, or 24 cents a share, in the fourth quarter, compared with $153.6 million, or 65 cents as share, a year earlier.
Excluding one-time items, earnings were 54 cents a share, a penny below the average analyst estimate compiled by Reuters Estimates.
Sales were $1.34 billion, about flat with a year earlier.
The stock has lost about 28 percent of its value in the past year.
(Reporting by Brad Dorfman; Editing by Derek Caney)
