In a call with investors on Thursday, Hershey CEO Michele Buck said the company will be unable to meet demand heading into the Halloween and holiday seasons.
She said the snack company has about 10% more inventory this year than last, but supply chain issues continue hindering stock.
“Seasonal consumer engagement is expected to remain high, and we expect high single-digit sales growth for both our Halloween and holiday seasons,” Buck said. “Despite this strong growth, we will not be able to fully meet consumer demand due to capacity constraints.”
Buck said the company is taking steps to address inventory shortages.
“As trends began to improve, and the labor market became increasingly difficult, we struggled to efficiently ramp up production back to our historical levels,” Buck said. “We have taken a lot of action to address these issues, including deploying manufacturing expertise and lean teams to the plant, and streamlining the portfolio to reduce complexity and increase output. We are seeing improvement every week, and this will remain a key focus area for our supply chain teams until our production and service levels are optimized.”
Buck said inflation has also had an impact on business. She said that more customers opting to eat at home rather than at restaurants could increase demand. However, she noted that higher prices are affecting Hershey’s costs.
“We recognize inflation is pressuring many Americans, and we remain committed to making sure our products remain an affordable treat,” Buck said. “We expect approximately 20% of our products to continue to retail at $2 or less, and we will continue to bring innovative offerings at a wide range of price points to meet the needs of our consumers.”