Stock futures pop as Wall Street looks to continue record-setting run

Live2 updates

• 

  Tue, March 26, 2024 at 5:00 AM PDT

  Cocoa prices rip higher — here’s the problem for Hershey

  The sell-off in Hershey’s (HSY) stock is picking up as cocoa prices rip to a record high.

  Hershey shares are off by 5% in the past five trading sessions as cocoa prices have moved beyond a record $10,000 a ton. Cocoa prices have more than doubled this year on the back of poor crop conditions in West African regions.

  The problem for Hershey is that it seems well behind the curve on raising prices to offset less than sweet cocoa costs. Hershey is in the midst of implementing new technology that better tracks ordering, shipping and prices, which is weighing on execution. In turn, Hershey’s profit margins in the first half of 2024 stand to be under a great deal of pressure.

  A reminder on this issue from Hershey’s early February earnings call. The comments are from CFO Steve Voskuil:

  “When we think about the impact of future price increase, we’re really challenged in the first half of this year just because of the ERP [enterprise resource planning] implementation — it puts some limitations on what we can do. And you can imagine enormous collaboration between us and retailers to execute that transformation. So we’re trying to keep things very stable during that period. And so further price increases should they come, will benefit more the back half of the year and probably more so 2025.”

• 

  Tue, March 26, 2024 at 4:30 AM PDT

  The next shoe to drop at Under Armour

  The revolving C-suite door at struggling Under Armour (UAA) is likely to keep spinning in the months ahead.

  Returning CEO and founder Kevin Plank is likely to make leadership team changes in the months ahead, a person familiar with the matter tells me. This makes sense as the leadership team was completed overhauled by exiting CEO Stephanie Linnartz, as I have reported.

  Other top executives not keen on working with Plank — a controversial leader with a checkered history on delivering cultural excellence —are already eyeing the exits, the source tells me.

  Plank essentially booted Linnartz from the CEO position, sources have told me, angering corporate employees.

  Under Armour shares are down about 14% since Plank announced his return on March 13 as investors fret over uncertainty at the company.