Oct. 3 (Bloomberg) -- Hershey Co., the largest U.S. candy maker, picked operating chief David West to be its next chief executive officer as it seeks to win back sales from Mars Inc.

West, 44, who was named president effective immediately, will take over from CEO Richard Lenny on Dec. 1, the company said yesterday in a statement. Hershey said Oct. 1 that Lenny would leave at the end of 2007.

Hershey forecast in July a drop in annual profit after dairy prices rose and it lost sales to Mars, known for its M&M's candies. It plans to cut 12 percent of the workforce, reduce the number of assembly lines and transfer some operations to Mexico to lower costs. The shares have fallen 8.1 percent this year and are set for a third straight annual decline.

``There is not a lot of patience among investors with this company based on the number of disappointments we've seen,'' said Matt Arnold, an analyst at Edward Jones & Co., who has a ``buy'' rating on the shares. ``They are on a short leash.''

Hershey, the maker of its namesake chocolate bars and Reese's peanut-butter cups, also appointed board member Robert H. Campbell as non-executive chairman to replace Lenny, effective Jan. 1. Both Lenny and West previously worked for Kraft Foods Inc.

Hershey, based in Hershey, Pennsylvania, fell $1.28, or 2.8 percent, to $44.50 as of 4:03 p.m. in New York Stock Exchange composite trading. The stock has declined 11 percent this year.

West Biography

West joined Hershey in May 2001 as vice president of business planning and development, two months after Lenny was named CEO.

Previously, West was chief financial officer at Kraft's Nabisco Biscuit and Snacks Group, and was at the company for 14 years. Lenny and West worked together at the Nabisco unit.

West was named CFO of Hershey in 2005 and promoted to chief operating officer in January 2007.

Revenue growth at Hershey has slowed since 2005. Second- quarter profit fell 96 percent on expenses to shed jobs and higher dairy costs.

The candy maker raised prices in April for the first time in two years, implementing increases of 4 percent to 5 percent.

Lenny may be leaving the company over disagreement on its strategic direction with the trust that controls the majority of Hershey's shares, said analysts including Eric Katzman at Deutsche Bank Securities Inc.

`Lenny's Vision'

``We believe CEO Lenny's vision ultimately differed with the trust surrounding issues such as whether Hershey should acquire and/or expand rapidly, more aggressive cost reduction efforts and perhaps over what is the right timeframe on financial and strategic goals,'' New York-based Katzman, who has a ``hold'' rating on the shares, wrote in a research note yesterday.

The Hershey Trust controls about 80 percent of the voting power and about 30 percent of the equity in Hershey. It was established by founder Milton Hershey and his wife, Catherine, in 1909 and exercises voting rights on behalf of the private Milton Hershey School.

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net.

Last Updated: October 3, 2007 16:09 EDT