Hershey Co the chocolate maker reported sales that were flat for the quarter for just the first time in over five years, as its volumes dropped in North American due to hikes in price and demand was weaker across China.
The maker of Reese’s Peanut Butter Cups and Hershey’s Kisses also lowered its sales forecast for the full-year. It was the fourth time the company has cut its sales forecast.
Slowing growth in the China economy has weakened the spending on consumer items that are non-essential, including Hershey’s Kisses, which make popular gift items.
Hershey announced on Friday that its sales and profit in its Shanghai Golden Monkey snacks and candy business based in China have been far below expectations.
The company, which is 121 years old, has come under heavy pressure in the U.S., its largest market, as the consumer turns more calorie conscious.
Price hikes increased net sales in North America by 1.8% to just over $1.4 billion during the second quarter, but overall volumes dropped.
Sales in regions outside North America were down 12.1%.
Hershey cut its forecast for growth in net sales for 2015 to between 1.5% and 2.5%, from its June forecast of between 2.5% and 3.5%.
The chocolate maker reported a $99.7 million net loss equal to 47 cents a share, for its quarter that ended July 4, mainly because of pretax charges that total more than $281.8 million.
The charges included a non-cash goodwill charge of $249.1 million that was related to its business in Shanghai, which it bought last year.
Hershey reported a profit of more than $168.2 million, equal to 75 cents a share during the same quarter one year ago. Excluding certain items, the company had 78 cents a share in earnings. New sales ended flat at $1.58 billion, hurt by a strong U.S. dollar.
Analysts were expecting Hershey’s earnings to be 75 cents a share and revenue of just over $1.62 billion.