Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
Ahead of the deadline, U.S. President Donald Trump told reporters that Huawei was a national security threat.Technologyread more
Baidu is gearing up to release its second-quarter earnings on Monday with the market expecting a sharp decline in profit.Technologyread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Stocks in Asia edged up Monday afternoon as U.S. Treasury yields bounced higher after plunging last week.Asia Marketsread more
The problem with tanking equities lies elsewhere, writes Michael Ivanovitch, because traders see no end to America's unfolding trade disputes with Europe and China.World Economyread more
Beijing wants to use reforms to support a slowing economy.China Marketsread more
Trump said Cook made a "good case" that it would be difficult for Apple to pay tariffs, when Samsung does not face the same hurdle because much of its manufacturing is in...Technologyread more
The yield on the benchmark 10-year Treasury note briefly fell below the 2-year rate on Wednesday, a phenomenon in the bond market known as yield curve inversion, which is...Marketsread more
Despite aggressive strides, Waymo needs one thing before their self-driving cars become a seriously useful transportation system: people. We talked to the ones closest to it.Technologyread more
The hearing will now begin next Monday to allow time for the completion of a previous trial that revolves around former 1MDB unit SRC International, a Kuala Lumpur High Court...Asia Newsread more
Hershey's candy sales will suffer as consumers move towards healthier snacks, according to one Wall Street firm.
UBS lowered its rating to sell from neutral for the food company, citing the firm's negative consumer survey results for chocolate sales.
"Hershey's portfolio is over-exposed to slowing category consumption, intensifying competition, and rising cocoa prices," analyst Steven Strycula wrote in a note to clients Tuesday. "And our UBS Evidence Lab report [survey] identifies reduced purchase frequency for everyday chocolate as preferences shift consumption to healthier snack alternatives and online purchases. These longer-tailed trends carry negative margin mix and potential distribution losses for Hershey."
Strycula lowered his price target to $90 from $106 for Hershey, representing 9 percent downside to Monday's close.
The company's shares are down 3.4 percent Tuesday after the report. Its stock declined 12.5 percent so far this year through Monday versus the S&P 500's 2 percent drop.
UBS' survey of consumers points to "flat to negative" chocolate sales growth for 2018 and 2019, according to the analyst. Strycula said U.S. chocolate sales constitute 74 percent of the company's revenue. He noted that cocoa and cocoa butter prices are up 30 percent year-to-date and represent 15 percent to 20 percent of Hershey's costs.
"Our data analysis highlights increased US promotional activity in chocolate as vendors compete for distribution in a decelerating consumption category," he wrote.
Hershey sent the following statement when asked for comment:
"Our vision is to be an innovative snacking powerhouse. We are working to delight consumers across more snacking occasions beyond confection, and we leverage our advantaged business model and capabilities with a goal to deliver top quartile net sales growth and shareholder return. In a highly competitive and difficult growth environment, we have consistently delivered top and bottom line growth and maintained market share. Our very profitable North American business distinguishes us from many of our peers.
If you look specifically within the combined chocolate and non-chocolate candy segments, where we drive the majority of our U.S. sales, category growth for the full-year 2017 was 2.5%. This is greater than the growth of all snacks combined at nearly 2%, and underscores the important role the confectionery category continues to play with consumers and our retail customers even as we expand across snacks to capture more consumer snacking occasions. "