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NEW YORK (AP) — Superstorm Sandy may have knocked out power, canceled school and disrupted Halloween for many trick-or-treaters in the Northeast, but an analyst predicts few negative effects for candy maker Hershey.
Halloween candy is typically shipped to retailers in late September so stores can set up displays and drive sales. Even if consumers made fewer last-minute candy purchases because of the storm, the shipments have already been recorded as revenue for the fourth quarter, said Janney Capital Markets analyst Jonathan Feeney Monday.
Halloween is a critical holiday for The Hershey Co., which gets about a sixth of its annual sales from the holiday. But when reporting its third-quarter results last month, Hershey noted that it switched to a more "harvest-themed" packaging for the season, giving retailers the flexibility to market its candy over a longer period of time, not just for Halloween.
The company also noted at the time that it had a good start to the Halloween season, with candy, mint and gum sales in the U.S. up 5.9 percent for the 12 weeks ended Oct. 6.
And even though many in the Northeast and other parts of the country damaged by Sandy postponed or canceled Halloween, Feeney noted that the rest of the country still went trick-or-treating.
He doesn't believe there will be much of a hit to first-quarter results either. If there's a big supply of candy left over from Halloween, he said, Hershey can change its marketing strategy to sell it off.
"The good news is confectionery is an expandable category, meaning if product is around, people will consume it," Feeney said.
Shares of Hershey closed at $69.49 Friday, up nearly 21 percent over the past 12 months.