For most adults, Halloween is a minor holiday. But if you work at a candy company, Halloween is like Black Friday on steroids.
In the U.S., Halloween candy sales are more than sales from Easter and Valentine’s Day combined. The holiday accounts for about 10% of the industry’s annual total sales. That's a recipe for fierce competition between confectioners.
Who will win the Halloween sales race this year? To find out, we’re looking at the three largest publicly traded candy companies in the U.S. Their performances and earnings can help us predict which will come out on top this October 31.
Mondelez International
Mondelez (NASDAQ:MDLZ) is the successor to Kraft Foods (NASDAQ:KHC), after the company spun off its grocery division in 2012. It’s a massive conglomerate and owns many household names in the candy industry. Nabisco, Cadbury and Toblerone are all Mondelez holdings.
The company has a commanding share of the U.S. candy market. But that’s no guarantee of financial success. And lately, Mondelez stock performance has been subpar at best. It missed an earnings estimate two quarters ago and in 2016, its shares are down 3% year to date.
Hershey Company
Hershey (NYSE:HSY) is the largest chocolate manufacturer in North America. In addition to its chocolate bar, morsel and syrup brands, Hershey owns Reese’s, Mr. Goodbar and Krackel. It is also the only company profiled here that runs a theme park.
Hershey is a force to be reckoned with in the chocolate niche. And that specialization has paid off financially. It has beaten earnings estimates by wide margins in each of the last four quarters. Hershey stock is up almost 10% this year. But it experienced some seasonal decline at the beginning of this month.
General Mills Inc.
General Mills (NYSE:GIS) is one of the oldest and largest food manufacturers in the U.S. Its holdings include supermarket staples like Cheerios, Yoplait Yogurt and Green Giant.
But General Mills has more of a niche candy operation than the other companies we’ve examined. Its Betty Crocker dessert line mainly sells fruit snacks and gummies. It produces Gushers, Fruit by the Foot and Fruit Roll-Ups.
For this reason, General Mills’ Halloween sales potential is more limited than Hershey or Mondelez. And its financials are OK, but not great. General Mills has barely met earnings expectations for the last three quarters. Its stock is up 13% this year, but it recently experienced a big sell-off during the September retail slump.
Wrap-up
So whose candy will reign supreme this Halloween? It’s hard to say. Mondelez wins in total size and market share. General Mills has the best-performing stock this year. But Hershey has the strongest earnings, decent stock performance and a firm hold on the chocolate-bar market.
It seems as though the Pennsylvania-based chocolatiers have the biggest potential to make gains this Halloween.
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