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Halloween trick-or-treating to soften Hershey’s supply chain troubles

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With costumed trick-or-treaters raring to go door to door this year after a pandemic-ridden 2020, candy maker Hershey Co is expected to bump up its annual sales forecast even as supply chain bottlenecks plague the industry.

Hershey has about 70% of its manufacturing capacity in the United States, and that is expected to help it deliver its Kisses and Reese’s in time for what is expected to be the biggest Halloween in terms of spending.

The period around the October holiday is Hershey’s busiest time of the year, making up about 10% of the company’s annual sales.

 

Graphic – Halloween spending forecasts over the years: https://graphics.reuters.com/HERSHEY-RESULTS/byprjramape/chart.png

 

Consumer spending on Halloween-related items is expected to reach an all-time high of $10.14 billion this year, according to a National Retail Federation (NRF) survey, compared with $8.05 billion spent in 2020.

“There’s going to be a lot of pent-up demand this Halloween, because many people couldn’t celebrate last year. Coupled with that, in general the consumer is in a very healthy position and vaccination rates have been growing,” CFRA analyst Arun Sundaram said.

THE CONTEXT

Growing global supply chain issues and worker shortages triggered by the pandemic have hurt packaged food makers. The companies are also taking a hit to their margins due to soaring prices of commodities such as sugar, cocoa beans, wheat and edible oils.

“Hershey would have an easier time navigating the (supply chain) crisis given that the company has less complexities in its supply chain compared to other packaged food companies who have a more global presence,” Sundaram added.

NRF data suggests more U.S. consumers are ready to celebrate Halloween this year after a year of limited trick-or-treating.

THE FUNDAMENTALS

** Analysts forecast annual revenue of $8.82 billion for Hershey, which will report quarterly results before markets open on Thursday

** Full-year adjusted profit is estimated to be $6.91 per share

 

Graphic – Hershey likely to bump annual sales forecast on record Halloween spend: https://graphics.reuters.com/HERSHEY-RESULTS/jnvwewozlvw/chart.png

 

WALL STREET SENTIMENT

** The current average analyst rating for Hershey is “hold”, with a median price target of $185.00

** The company’s shares have risen nearly 20% this year

QUARTER STARMINE REFINITIV IBES ACTUAL BEAT, SURPRI

ENDING SMARTESTIMATE® ESTIMATE  MET, SE %

MISSED

Jun. 30 2021 1.42 1.43 1.47 Beat 3

Mar. 31 2021 1.79 1.80 1.92 Beat 6.7

Dec. 31 2020 1.42 1.43 1.49 Beat 4.5​

Sep. 30 2020 1.72 1.72 1.86 Beat 8.3

 

(Reporting by Mehr Bedi in Bengaluru; Editing by Sweta Singh and Shounak Dasgupta)

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Tentative deal between union workers and beef producer Cargill struck | CTV News – CTV News Calgary

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With less than a week to go before workers were set to go on strike at Cargill’s High River, Alta. beef processing plant, the company says a tentative deal has been reached.

The company announced the development on Wednesday and says it is “encouraged by the outcome” of recent talks.

“After a long day of collaborative discussion, we reached an agreement on an offer that the bargaining committee will recommend to its members. The offer is comprehensive and fair and includes retroactive pay, signing bonuses, a 21 per cent wage increase over the life of the contract and improved health benefits,” Cargill wrote in a statement to CTV News via email.

The company adds it also “remains optimistic” a deal can be finalized before the strike deadline.

“(We) encourage employees to vote on this offer which recognizes the important role they play in Cargill’s work to nourish the world in a safe, responsible and sustainable way. While we navigate this negotiation, we continue to focus on fulfilling food manufacturer, retail and food service customer orders while keeping markets moving for farmers and ranchers,” it wrote.

The United Food and Commercial Workers’ Union (UFCW) Local 401 was expected to go on strike on Dec. 6.

It rejected the most recent attempt at a deal on Nov. 25 by a 98 per cent margin.

‘FAIR OFFER’

According to a statement from UFCW Local 401, the negotiating team engaged in “a marathon day” of talks with the company on Tuesday.

“Late in the evening, our bargaining committee concluded that they were in receipt of a fair offer and that they were prepared to present that offer to their coworkers with a recommendation of acceptance,” it wrote in a statement.

The union says the tentative deal will “significantly improve” the lives of Cargill workers and will be the ‘best food processing contract in Canada.”

Highlights from the deal include:

  • $4,200 in retroactive pay for many employees;
  • $1,000 signing bonus;
  • $1,000 COVID-19 bonus;
  • More than $6,000 total bonuses for workers three weeks before Christmas;
  • $5 wage increase for many employees;
  • Improved health benefits; and
  • Provisions to facilitate a new culture of health, safety, dignity and respect in the workplace

While UFCW Local 401 president Thomas Hesse calls the deal “fair,” he will support workers on the picket line if they decide to reject the proposal.

“If they do accept it, I’ll work with them every day to make Cargill a better workplace,” Hesse said in a statement. “I will do as our members ask me to do.

“I respect all of the emotions that they feel and the suffering that they have experienced.”

Employees are expected the vote on the new deal between Dec. 2 and 4.

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Afterpay delays vote on $29 billion buyout as Square awaits Spain’s nod

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Afterpay Ltd will delay a shareholder meet to approve Square Inc’s $29-billion buyout of the Australian buy now, pay later leader, as the Jack Dorsey-led payment company awaits regulatory nod in Spain.

The investor meet was set for Dec. 6, but Afterpay said it would likely take place next year as Square, which has rebranded itself to Block Inc, is likely to get an approval from the Bank of Spain only in mid-January.

The delay is unlikely to impact the completion of Australia‘s biggest deal, which is set for the first quarter of 2022, Afterpay said.

“We continue to believe the risks of the transaction closing are minimal,” RBC Capital Markets analyst Chami Ratnapala said in a brief client note.

Meanwhile, Twitter Inc co-founder Dorsey is expected to focus on Square after stepping down as chief executive of the social media platform as it looks to expand beyond its payment business and into new technologies like blockchain.

Afterpay shares fell more than 6%, far underperforming the broader Australian market, tracking Square’s 6.6% drop overnight in U.S. market on worries over the Omicron variant.

 

(Reporting by Nikhil Kurian, Sameer Manekar and Indranil Sarkar in Bengaluru; Editing by Anil D’Silva, Rashmi Aich and Arun Koyyur)

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Canada Goose under fresh fire in China over no-return policies

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China’s top consumer protection organisation has warned Canada Goose Holdings Inc against “bullying” customers in China with its return policies, just three months after the winterwear brand was fined for false advertising.

The premium down jacket manufacturer has been a hot topic on Chinese social media in recent days over its handling of a case involving a customer who wanted a refund of her purchases amounting to 11,400 yuan ($1,790.17) after finding quality issues.

She said she was told by Canada Goose that all products sold at its retail stores in mainland China were strictly non-refundable, according to her account which went viral online.

State-backed media such as the Global Times newspaper later cited Canada Goose as denying that it had a no-refund policy and that all products sold at its retail stores in mainland China were refundable in line with Chinese laws. The company did not respond to Reuters’ request for comment.

That has not failed to quell criticism of the brand.

“No brand has any privileges in front of consumers,” the government-backed China Consumer Association (CCA) said in an opinion piece posted on its website on Thursday morning.

“If you don’t do what you say, regard yourself as a big brand, behave arrogantly and in a superior way, adopt discriminatory policies, be condescending and bully customers, you will for sure lose the trust of consumers and be abandoned by the market,” the CCA said.

Representatives of the brand were summoned for talks on Wednesday by the Shanghai Consumer Council to explain its refund policy in China.

The dressing down of Canada Goose comes as tension between China and Western countries has fuelled patriotism and driven some shoppers to turn to home-grown labels.

Canada Goose was also fined 450,000 yuan in September in China for “misleading” consumers in its ads.

($1 = 6.3681 Chinese yuan renminbi)

 

(Reporting by Sophie Yu, Brenda Goh; Editing by Kim Coghill)

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