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Hershey outlook turns sour
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September 13, 1999: 11:00 a.m. ET
Per-share net seen 8%-10% below forecasts due to shipping problems
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NEW YORK (CNNfn) - Hershey Foods Corp. said Monday its fiscal year earnings will fall 8 percent to 10 percent below analysts' expectations due to problems with its new business systems in the areas of customer service, warehousing and order fulfillment.
The bulk of the shortfall will occur in the third quarter, the Hershey, Pa.-based candy maker added.
Judging from the early morning performance of the company's stock, however, investors didn't seem initially perturbed. Shares of Hershey (HSY) were up 9/16 at 52-3/8. But that's still well below their 52-week high of 75-13/16.
Analysts polled by forecast-tracking firm First Call had expected Hershey to earn 78 cents a share in the third quarter and $2.36 for the year. The company originally had forecast it would earn $2.40 per share for the year.
"We are going through a very challenging period in providing the order fulfillment and customer service levels which customers have come to expect from Hershey. While order patterns have remained strong, we have been unable to fill them completely, in a timely fashion," Chairman and CEO Kenneth L. Wolfe said. "We have put in place an action plan to resolve our order backlog and get us back on schedule."
He noted, however, that in light of demand for the Back-To-School/Halloween period and the upcoming Christmas season, it will be mid- to late October before the company is fully back on schedule. 
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Hershey
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