Hershey distribution problems continue

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Hershey distribution problems linger BY HOPE YEN Associated Press Writer

HARRISBURG, Pa. (AP) -- Hershey chocolates appear to be in plentiful supply for Valentine's Day despite some lingering distribution problems that hurt Halloween and Christmas sales.

The holiday is the fourth-busiest time of year for the nation's largest candymaker -- after the back-to-school season, Halloween and Christmas -- and Hershey seems to be rebounding after numerous delivery delays last summer, analysts said.

``They've gotten a lot of shipments out already and have done so without many of the problems they faced back during Halloween and Christmas,'' said Andrew Lazar, an analyst with New York-based Lehman Brothers. ``They're certainly making progress.''

Hershey said last week it had made steady improvements since problems with a new $112 million automation system hampered deliveries and inflated operating costs last year. The delays forced the company to lower projected earnings for the last two quarters as major retailers such as Wal-Mart reported continuing problems with receiving Hershey orders.

Hershey last week acknowledged it had ``not yet fully returned to historical customer service levels,'' although it expected to recover as a new 1.2 million square-foot distribution center opened this spring. Company spokesman John Long declined further comment.

Wal-Mart spokeswoman Jessica Moser, who reported delivery troubles for her 2,450-store chain through Christmas, also declined to comment on whether Wal-Mart was seeing lingering problems for Valentine's Day.

``We've had a long-standing relationship with Hershey, and we don't have any plans for that to change,'' she said.

Terry Bivens, a Bear Stearns analyst, said the test for Hershey is whether it can fill orders efficiently during busy chocolate-selling seasons such as Valentine's Day.

``We think they've largely turned a corner,'' Bivens said. ``But in February, it's still a little too early to get a handle on how they're doing ... If they have a bad season, it would hurt their earnings.

http://www.mercurycenter.com/business/bizwire/docs/202503l.htm

-- Martin Thompson (mthom1927@aol.com), February 11, 2000

Answers

Nice and loud now: THIS IS INDEED Y2k-RELATED!!!!

The old system would not make it, so they speed up the implementation of an enterprise resource planning system. Oops.

They announced earnings hits for the last several quarters.

-- Bud Hamilton (budham@hotmail.com), February 13, 2000.


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