The Hershey Company (HSY – Analyst Report) beat the Zacks Consensus Estimate for earnings but missed the same for revenues in the third quarter of 2015.

Moreover, the chocolate maker slashed the 2015 revenue outlook – for the fourth time this year – due to challenges in China as well as lower-than-expected U.S. net sales in the reported quarter. The company also expects to meet only the lower end of the previously provided gross margin and earnings growth ranges.

Shares declined around 3% in pre-market trading. In fact, the company’s share price decreased around 9% so far in 2015 due to weak sales performance and frequent guidance cuts.

Earnings Beat

Hershey’s third-quarter adjusted earnings of $1.17 beat the Zacks Consensus Estimate of $1.12 per share by 4.5%. Earnings increased 11.4% year over year as better margins offset another weak top-line performance.

Hershey Company (HSY – Analyst Report) – Earnings Surprise | FindTheCompany

Revenues Remains Weak

Net sales of $1.96 billion missed the Zacks Consensus Estimate of $1.97 billion by 0.7%. Net sales were flat year over year including the impact of currency and acquisitions/divestures. Currency hurt revenues by 2.0 percentage points (pp), higher than 1.3 pp last quarter. Net acquisitions and divestitures contributed 0.5 pp to the top line.

Excluding the currency impact, sales increased 2%. Organically, revenues increased 1.5% as pricing gains offset weak volume performance.

Sales remained weak in the international markets, mainly China, while the North American top-line performance was below management’s expectations due to soft consumption trends.

Net price realization benefited revenues by 5.8 pp gaining from the price increases that the company announced in July last year. However, volumes declined 4.3 pp because of volume elasticity related to the price increases and lower China sales. In the U.S. too, sales were below expectations.