October 25, 2018 / 1:01 PM / 10 months ago

UPDATE 1-Hershey's posts lower quarterly profit, gross margins; shares slip

(Adds details on gross margins, compares with analysts' estimate, share price)

Oct 25 (Reuters) - Chocolate maker Hershey Co reported a fall in quarterly profit on Thursday as investments in packaging and higher freight costs added to expenses, sending its shares down 5 percent.

Gross margin - a measure of how much profit a company can make on every dollar spent - fell 490 basis points to 41.5 percent.

U.S. chocolate makers have been facing slowing growth as consumers opt for healthy foods over sugary candies and processed food, forcing traditional confectionary makers like Hershey to innovate to prop up sales.

Net income attributable to Hershey fell to $263.71 million in the third quarter ended Sept. 30 from $273.30 million a year earlier.

Excluding items, the company earned $1.55 per share, in line with analysts' average estimate, according to Refinitv data.

Sales rose 2.3 percent to $2.08 billion but fell short of the average analyst estimate of $2.09 billion.

Sales in North America, its biggest market, rose 2.9 percent to $1.84 billion, while sales in international markets fell 1.9 percent to $236.1 million.

Hershey's shares have fallen 5 percent this year, compared with a 4.2 percent loss for the broader S&P Consumer Staples index. (Reporting by Soundarya J in Bengaluru Editing by Saumyadeb Chakrabarty)

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