Hershey eliminating 300 jobs

Candy-maker Hershey Co. is eliminating 300 jobs after struggling with slowing growth in China.

Also, Hershey said Friday that it cut its profit forecast. Earnings per share in 2015 will be from $4.10 to $4.18, excluding some items, down from $4.30 to $4.38. Analysts had estimated $4.32.

Along with the cutbacks, Hershey announced leadership changes. Chief financial officer Patricia Little will take on responsibility for mergers and acquisitions, which Hershey said will be "an important driver" of the company's success.

Steve Schiller, a regional president, is taking a new position as president of China and Asia for the company. The company also created a global leadership job focused on expansion in emerging markets, and is searching for candidates for the position.

The job cuts will result in pretax charges of as much as $120 million, or 35 cents a share, mostly in cash and this year. The changes will save from $65 million to $75 million before taxes, primarily in 2016.

Sales this year will rise as much as 5 percent, excluding the effect of unfavorable currency-exchange rates. The company had projected a gain of as much as 7 percent.

Hershey's chocolate sales growth in China trailed its expectations in April and May, hurt by increased competition in the chocolate category and a cooling economy that is restraining consumers' spending. The company said it would focus on gaining distribution in smaller stores and pushing core products and brands that deliver the highest return.

"They haven't been overly successful in terms of getting a handle on local tastes," said Erin Lash, an analyst at Morningstar Inc. who estimates that China accounts for about 5 percent of Hershey's sales. "It's a very difficult undertaking."

Hershey also said it was "moderating" its forecast for sales from Shanghai Golden Monkey Food Joint Stock Co., the privately held candymaker it agreed to acquire in December 2013.

Pennsylvania-based Hershey, which makes brands such as Almond Joy and Twizzlers in addition to its iconic chocolate bars, bought 80 percent of the Chinese company last year and is scheduled to take the final 20 percent on the one-year anniversary of the initial close. Hershey said it is working with Shanghai Golden Monkey to "reassess the value of the business."

Hershey shares fell 3.5 percent to $89.04 at the close. It was the biggest one-day drop in almost five months for Hershey, which has now slipped 14 percent this year.