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Hershey results disappoint as demand hurt by China

China one of biggest markets of American chocolate company

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A file photo of Hershey's Chocolate Kisses are seen coming off a pretend production line at Hershey's Chocolate World in Hershey, Pennsylvania. Photo: AP

Hershey, the maker of Hershey’s Kisses and Reese’s Peanut Butter Cups, posted quarterly sales below Wall Street estimates, hurt by a drop in demand in China, one of its biggest markets.

The Pennsylvania-based company’s shares fell as much as 3.8 per cent to US$101.61 in morning trading on Friday, but pared some losses to trade marginally up later in the session.

China sales fell 16.6 per cent, in the fourth quarter ended December 31, hurt by macroeconomic conditions in the country, Hershey said.

The company has struggled to increase its business in the world’s most populous country since an acquisition of local chocolatier Shanghai Golden Monkey in 2014 went awry.

Hershey took a big write down for the acquisition and its sales in the Chinese market have decreased for several quarters. Shopping for chocolate in China has largely moved online, hurting Hershey’s investments in brick-and-mortar outlets such as supermarkets and hypermarkets, Berenberg analyst Fintan Ryan told Reuters.

A woman shops inside the Hershey Store in New York. Photo: Reuters
A woman shops inside the Hershey Store in New York. Photo: Reuters
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