Retailers, consumers and prices
Check out the better-than-expected results being served up by food companies.
Chocolate maker Hershey posted a quarterly profit above analysts’ expectations, said it was on target to meet its 2010 earnings forecast and boosted its dividend. The company also said it would boost advertising to try to sell more candy, including Almond Joy and York peppermint patties.
Meanwhile, Archer Daniels Midland, one of the largest processors of corn and soybeans, saw its profit slip 2 percent, but the results still topped analysts’ forecasts, and Pepsi Bottling also topped Wall Street’s view as productivity improvements offset a dip in sales. Fruit and vegetable producer Dole Food reported a higher fourth-quarter profit and paid down debt.
Outside the food and beverages sector, Whirlpool’s profit more than doubled on cost cuts and improving sales and the world’s biggest appliance maker offered a stronger-than-expected 2010 forecast. Women’s clothing retailer Ann Taylor said its fourth quarter earnings would top expectations.
Nevertheless, investors have been giving overall U.S. earnings a big yawn up to now, and consumers are saving more and spending less according to the IMF. On the plus side, global employment services company Manpower reported a higher-than-expected profit and said job trends were improving around the world, suggesting the economic recovery would be sustained.
Check out Nestle’s waiting game.
It could take years, but analysts in Europe think that Nestle is waiting for the pressure of competing with two confectionery giants on its home turf to eventually melt Hershey’s resolve, letting Nestle buy the Pennsylvania-based chocolate maker.
While Pennsylvania law says the state’s attorney general would have to approve any deal that dilutes the Hershey Trust’s control over the candy maker, analysts think that eventually the trust will have to look at a Nestle bid.
U.S. chocolate maker Hershey and Italy’s privately owned Ferrero both said separately they were evaluating their options over a possible bid for Cadbury, the world’s No. 2 confectioner, but analysts still see hostile bidder Kraft’s $16.2 billion offer as the front runner.
Reuters and other media have reported Hershey, known for its namesake chocolates and Reese’s peanut butter cups, and Ferrero were discussing a joint bid and the UK Takeover panel asked the companies to clarify their intentions. They gave no hint whether they may be working together on a joint bid.
Check out this morning’s lineup of quarterly results.
Meanwhile, cigarette makers Philip Morris International and Reynolds American topped expectations and raised their full-year forecasts.
Just how “wonderful” consumers think your brand is can help your stock price, especially in a recession, according to a study by market research agencies Kadence, Brand Care and So What Research.
The study looked at consumer perceptions of 650 leading U.S. brands and found there is a link between the affection consumers hold for a brand — or the “wonderfulness” of the brand – and its stock performance.
Check Out how higher commodity costs offset the benefit of a higher prices at Hershey.
Back in August, Hershey announced a roughly 10-percent price increase in the United States as it tried to deal with higher costs for cocoa, corn sweetener, sugar and peanuts.
Seems like the business men who are dealing with the market fallout may be learning something from the fairer sex when it comes using food to boost their mood.
According to a Brand Keys survey, men are reaching for chocolate bars more frequently these days. Every one of the 750 men in the survey, taken Friday through Sunday, said they were eating more chocolate.
When you eat candy, are you a Controller, or an Engaged Exploring Muncher?
Those are just two of the six categories of candy-eaters Hershey has identified as it tries to better focus on the U.S. candy consumer.
As described by CEO David West at an analyst meeting Tuesday, an “Engaged Exploring Muncher” eats twice the normal amount of candy, chooses from a wide menu of brands and is the least concerned about price.
It is also the most profitable segment, which is kind of the point for Hershey as it tries to figure out which consumers to target as it looks to turn around declining market share.
“Loyal Indulgers,” meanwhile, are older consumers who are loyal to brands they have known for a long time. “Practical Value Seekers” like candy, but are looking for a combination of price and value. They also represent the largest segment of candy eaters.
Smaller segments are “Controllers” and “Detached Occasionalists” who eat less candy because of health concerns or just because they aren’t interested in candy.
The last segment is “Confection Loving Moderators.” They like candy, but try to be disciplined in what they eat.
So, which one are you? Be honest.
Check out how high gas and commodity costs are crimping Hershey and Best Buy.
However, the largest U.S. chocolate company, which is meeting with analysts, said the pressures it faces — soaring prices for cocoa , energy and other commodities — remain the same.