Bad news for chocolate lovers -- your favorite indulgence is about to get more expensive.
Hershey Co., the nation's leading candy producer, said Tuesday it is raising prices of chocolates such as Kisses, Reese's, Mounds bars and other candies by 8% to combat increasing food, utility and transportation costs.
The costs for cocoa, dairy and nuts have "increased meaningfully since the beginning of the year," said Michele Buck, president of Hershey's North America, explaining that prices of these commodities "have been volatile and remain at levels that are above historical averages."
Cocoa futures jumped to almost a three-year high this month because of increased demand and weather issues in major cocoa-producing countries.
The company said it expects higher commodity costs to eat into profit margins, as well as significant commodity cost increases to continue into 2015.
Given these trends, the candy maker said it expects 2014 sales growth around the low end of its 5% to 7% target, and predicts adjusted earnings growth for the year will be near the low end of its 9% to 11% target.
Hershey projects second-quarter sales will increase about 4.5%. It also expects adjusted earnings of 75 cents to 77 cents a share for the quarter.
Analysts polled by Thomson Reuters had projected earnings of 76 cents a share on revenue of $1.6 billion.
Hershey said the price increase won't show up in its financial results until 2015.
Customers who buy directly from Hershey will be able to buy products at the old price for the next four weeks.
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