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Hershey’s second warning
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December 28, 1999: 4:14 p.m. ET
Candy maker issues second warning for its year-end earnings; cites slow sales
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NEW YORK (CNNfn) - Hershey Foods Corp.’s bottom line continued to sour Tuesday as the chocolate and candy maker warned for the second time that its year-end earnings would fall short of expectations.
The Hershey, Pa.-based company said weak December sales should push its 1999 earnings about 10 cents below its previous prediction of a $2.16 per share to $2.20 per share profit.
Analysts polled by research firm First Call Corp. were already not as optimistic as company officials, having projected year-end earnings of $2.12 per share before Tuesday’s warning.
Their outlook was tempered by the fact that Hershey (HSY) already warned investors in September that its year-end earnings would fall about 10 percent short of its original forecast of $2.40 per share.
But the company expected the bulk of that shortfall to occur during the third quarter, as it worked out the problems with several new business systems installed to handle customer service, warehousing and order fulfillment issues.
However, while the company posted strong retail sales during the Halloween season and met revenue expectations for November, December sales have slumped because of what "appears to be in part a consequence of the early customer service and fulfillment issues,” the company said.
Hershey shares immediately fell on the news, shedding 2-1/4 to 47-7/8 in late afternoon trading.
That continued the stock’s gradual downward trend during the past few months. Even before the stock opened for trading Tuesday, it had already lost more than a third of its value since setting its 52-week high of 65-3/4 last December.
Hershey expects to report its fourth-quarter and year-end earnings on Jan. 31, 2000. 
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Hershey Foods Corp.
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