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Business Briefing

Hershey Trims Forecast and Plans to Cut 300 Jobs

The chocolate maker Hershey trimmed its full-year revenue forecast for the third time, hurt by weak sales in China, and said it would cut 300 jobs by the end of the year under a new cost-cutting program. First-quarter sales in China were half what they were for the first quarter a year ago, and April and May sales there missed expectations, the company said. Hershey’s Kisses are more popular as gifts than as items of personal consumption in China, but slowing economic growth led Chinese consumers to cut spending even in the festive Chinese New Year period in February. Hershey wants China to become its No. 2 market behind the United States by 2017 and expects sales of $450 million in the country this year, but analysts have warned that the company could struggle to hit the target. Hershey also said it was reassessing the value of Chinese candy maker Shanghai Golden Monkey Food, which it agreed to buy for $584 million in 2014. Hershey is scheduled to acquire the remaining 20 percent stake in SGM in September. The full-year sales growth forecast was cut to a range of 2.5 to 3.5 percent from a range of 4.5 to 5.5 percent. Hershey’s “disappointing performance” in China has left it ripe for potential shareholder activism, Philip Van Deusen, director of research at Tigress Financial Partners, said. Other analysts disagreed, noting that 80 percent of the company’s voting rights are controlled by the Hershey Trust.

A version of this article appears in print on  , Section B, Page 2 of the New York edition with the headline: Hershey Trims Forecast and Plans to Cut 300 Jobs. Order Reprints | Today’s Paper | Subscribe

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