Moody's lowers Hershey

Moody's Investors Service said it downgraded the senior unsecured long term rating of Hershey Co. to A2 from A1 and assigned a negative outlook.

This rating action concludes the rating review that began on Oct. 24, Moody's said, noting that it also affirmed Hershey's Prime-1 short term rating.

The downgrade to A2 is based on continued soft operating performance in Hershey's core U.S. chocolate business, weaker than expected growth in key segments including premium dark chocolate, snacks and international and recent turnover in senior management and board composition that has created greater execution risk against current strategic initiatives and reduced visibility on future operating strategy, the agency said.

"The drastic changes to the board composition increases event risk and in our view, seems likely to lead to major changes in strategy and possibly financial policy," said vice-president and senior analyst Brian Weddington.

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