* Cuts FY sales growth forecast to 2.5-3.5 pct from 4.5-5.5 pct
* Cuts adj earnings/share forecast to $4.10-$4.18 from $4.30-$4.38
* Shares fall to 10-month low (Adds background, analyst comments; updates shares)
By Sruthi Ramakrishnan
June 19 (Reuters) - Chocolate maker Hershey Co trimmed its full-year revenue forecast for the third time, hurt by weak sales in China, and said it would cut 300 jobs by the end of the year under a new cost-cutting program.
The company’s shares fell to a 10-month low of $89.71 on the New York Stock Exchange on Friday.
Sales in China halved in the first quarter compared with the same period a year ago and missed expectations in April and May, the company said.
Hershey’s Kisses are more popular as gifts than as items of personal consumption in China, but slowing economic growth in the world’s most populous country led consumers to cut back on spending even during the festive Chinese New Year period in February.
Hershey wants China to become its No.2 market by 2017 and anticipates sales of $450 million in the country this year, but analysts have warned that the company could struggle to meet the target.
Hershey’s troubles in China could not come at a worse time as it is also struggling to woo increasingly health-conscious customers in the United States, its biggest market.
The maker of Reese’s Peanut Butter Cups cut its full-year sales growth forecast to 2.5-3.5 percent from its prior estimate of 4.5-5.5 percent.
The company’s “disappointing performance” in China has left it ripe for potential shareholder activism, Philip Van Deusen, director of research at Tigress Financial Partners, said.
Other analysts, however, disagreed, saying shareholder activism or a takeover is unlikely as 80 percent of the company’s voting rights are controlled by the Hershey Trust.
Hershey also said it was reassessing the value of Chinese candy maker Shanghai Golden Monkey Food Joint Stock Co (SGM), which it agreed to buy for $584 million in 2014. Hershey is scheduled to acquire the remaining 20 percent stake in SGM in September.
The company also slashed its full-year adjusted earnings forecast to $4.10-$4.18 per share from $4.30-$4.38.
Hershey announced several changes to its leadership team on Friday, as well as its intention to continue to grow through acquisitions by giving Chief Financial Officer Patricia Little additional charge of mergers and acquisitions.
It also named Asia, Europe, Middle East and Africa head Steven Schiller president of its China and Asia business.
The productivity measures, including the job cuts, are expected to result in $65 million to $75 million in pre-tax savings, primarily in 2016, Hershey said. (Reporting by Siddharth Cavale and Sruthi Ramakrishnan in Bengaluru; Editing by Simon Jennings)