HERSHEY, Pa. - The Hershey Company (NYSE:HSY) has announced the acquisition of Sour Strips, a sour candy brand known for its strong social media following. Founded in 2019 by Maxx Chewning, Sour Strips has gained popularity for its bold flavors and unique branding.
The acquisition aligns with Hershey's strategy to diversify its sweets portfolio and tap into new snacking occasions. Chewning, who has been the driving force behind Sour Strips' success, will continue to lead the brand's marketing and innovation under Hershey's umbrella.
Mike Del Pozzo, President of U.S. Confection at Hershey, commented on the acquisition, stating, "The acquisition of Sour Strips expands Hershey's offerings within our growing sweets portfolio with a product that is beloved by consumers." He emphasized the company's enthusiasm in welcoming the Sour Strips team to Hershey.
Maxx Chewning shared his excitement about the partnership, expressing confidence in Hershey's ability to help Sour Strips reach new heights. "Together with Hershey, our team is excited to continue delivering extraordinary experiences to candy enthusiasts around the globe," said Chewning.
The Hershey Company is known for its extensive range of confectionery products and snacks, including iconic brands such as Hershey's, Reese's, and Kit Kat, among others. The company boasts a significant global presence, with over 90 brand names in approximately 80 countries, generating annual revenues of more than $11.2 billion.
With a history spanning over 130 years, Hershey has established a reputation for ethical and sustainable operations. The company's commitment to social responsibility is reflected in its support for the Milton Hershey School, founded in 1909 to provide educational opportunities for children.
The financial details of the acquisition were not disclosed in the press release statement.
In other recent news, The Hershey Company is expecting to maintain steady top-line growth of 2% to 4% for 2025, similar to pricing levels in 2024, as revealed in a recent earnings call. However, the company anticipates significant inflation impacts due to rising cocoa and sugar costs, and is facing increased pricing pressure in international markets, particularly Mexico and Brazil. To navigate these challenges, Hershey is adapting its portfolio in response to consumer behavior changes influenced by GLP-1 drugs and projects cost savings of around $180 million for 2025 from productivity and AAA programs.
Piper Sandler has adjusted its price target on Hershey shares to $168 from $165, maintaining a Neutral rating. The adjustment reflects revised expectations for Hershey's performance through 2025 and 2026, considering potential headwinds like a higher anticipated tax rate and an increase in incentive compensation. Despite these challenges, Piper Sandler has identified growth drivers for Hershey, including new product innovations, increased marketing efforts, and strategies to navigate market challenges and inflationary pressures.
The firm has lowered its earnings per share (EPS) estimates for Hershey from $8.65 to $8.15 for the year 2025 and from $9.45 to $9.35 for 2026. Despite these adjustments, the increase in the price target is based on the firm's 2026 EPS estimates. These are recent developments that provide insights into Hershey's strategies and performance expectations in the face of market challenges.
InvestingPro Insights
The acquisition of Sour Strips by The Hershey Company (NYSE:HSY) comes at an interesting time for the confectionery giant. According to InvestingPro data, Hershey's revenue for the last twelve months as of Q3 2024 stood at $10.97 billion, with a slight decline of 1.69% compared to the previous period. This acquisition could potentially help bolster Hershey's revenue growth in the coming quarters.
Despite the recent revenue dip, Hershey maintains a strong financial position. The company's gross profit margin remains robust at 44.35%, indicating efficient cost management in its core operations. This financial strength could provide Hershey with the flexibility to integrate and grow the Sour Strips brand effectively.
InvestingPro Tips highlight that Hershey "has raised its dividend for 14 consecutive years" and "has maintained dividend payments for 54 consecutive years." These facts underscore the company's commitment to shareholder returns, which could be attractive to investors looking for stable income streams in the consumer goods sector.
It's worth noting that Hershey is currently trading near its 52-week low, with a P/E ratio of 19.93. This could present an opportunity for investors who believe in the company's long-term growth prospects, especially considering its strategic acquisitions like Sour Strips.
For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips for Hershey, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.