When I was a kid, Halloween was not the extravaganza it is now. That day, I’d cut a few holes in an old sheet to become a ghost for a few hours and head down the street for some free candy.

That sort of effortless approach doesn’t cut it anymore. Now, Halloween is big business. Last year, Americans spent more nearly $12 billion on Halloween.

That’s a lot of candy. And with the price of chocolate and confectionary manufacturing increasing 16% over the past year, that could push this year’s total Halloween spend above $12 billion.

Going to the Dogs

Don’t get me wrong. I like Halloween and enjoy seeing kids having so much fun. But with inflation on the rise and families pinching pennies, that extra billion dollars might be better spent elsewhere.

Try telling that to a ten-year-old child with a sweet tooth. For that matter, try telling that to my daughter who dropped a couple hundred bucks on THREE Halloween costumes for her dog.

Halloween isn’t just about candy and costumes anymore. Homeowners spend hundreds of dollars festooning their yards with faux graveyards, zombie pirate ships, and giant inflatable pumpkins.

Is it getting out of hand? Maybe, but people are going to spend their money on what makes them happy so there’s no point in having that discussion.

Instead, let’s talk about how to profit from all that money being spent on one day of the year.

Butter Cups and Sour Grapes

According to Instacart, the top-selling Halloween candies last year were:

1. Reese’s Peanut Butter Cups
2. Peanut M&Ms
3. Regular M&Ms
4. Kit Kat
5. Snickers

The perennial top selling candy on that list, Reese’s Peanut Butter cups, is owned by The Hershey Company (NYSE: HSY). If only its share price performed as well as its Halloween sales.

Since last Halloween, the S&P 500 Index is up about 18 percent. Over the same span, HSY has gained no ground as shown in the chart below.

This year got off to a rough start for Hershey. In December of 2024, HSY traded above $208 and appeared to have finally broken out of a multi-year slump. But that sweet smell of success quickly soured after the company released its fiscal year 2024 Q4 and full-year results.

Although Hershey’s top-line sales increased by 8.7 percent during the fourth quarter on a year-over-year basis, rapidly rising cocoa prices put a damper on the company’s outlook for 2025.

As a result, the company guided for “net sales growth of at least 2%, driven primarily by net price realization.” In other words, Hershey would raise retail prices to offset the higher costs of ingredients.

Even worse, Hershey expected its adjusted/diluted earnings per share (EPS) to be in a range of $6.00 – $6.18 this year compared to $9.37 in 2024 and $9.59 the year before that.

Sour Patch

Halfway through this year, Hershey appears to be well on its way to achieving those ignominious goals. When the company released its fiscal 2025 Q2 results at the end of July, it reiterated that same revenue guidance while reducing its EPS estimate to a range of $5.81 – $6.00.

It is one thing for a company’s profits to shrink when sales fall, but something else altogether to make less money while sales are rising. In short, Hershey has a cost problem that appears to be intractable.

Unfortunately for the company and its shareholders, this is not the kind of problem that can be easily solved with technology. The company noted: “Selling, marketing and administrative expenses increased 11.5% in the second quarter of 2025 versus the second quarter of 2024, reflecting higher advertising and related consumer marketing expenses and incentive compensation, partially offset by fewer capability and technology investments versus the prior year.”

While just about every other company in the world is increasing its technology investments, especially in artificial intelligence (AI), Hershey is cutting back to lower costs. That is sometimes referred to on Wall Street as “burning the furniture to heat the house.”

Coincidentally, Hershey is scheduled to release its fiscal 2025 Q3 results today. Based on its 8 percent share price decline over the past three weeks, Wall Street is expecting more bad news from the company. Perhaps this time the company will trick its shareholders by treating them to some good news.