Core Viewpoint - The Hershey Company is currently facing significant challenges, including a sharp decline in stock price and margin pressures, but it remains a fundamentally strong business with potential for recovery and long-term investment value [2][4][14]. Financial Performance - Hershey's stock has fallen over 40% from its peak, contrasting with the broader stock market, which is at all-time highs [2]. - The company provided disappointing guidance for 2025, projecting earnings per share between $6 and $6.18, a significant drop from $9.37 in 2024 [4]. - Despite the challenges, Hershey anticipates 2% revenue growth for 2025, primarily affected by rising cocoa prices [5]. Market Challenges - The company is experiencing margin pressure due to increased commodity costs, particularly cocoa, which has seen prices surge due to adverse weather affecting crop yields in West Africa [5]. - Concerns regarding the impact of GLP-1 agonists, a class of weight loss drugs, on consumer behavior have been noted, but management has not observed any material impact on sales [6][7]. Business Strengths - Hershey is recognized as a quality business with a strong historical performance, having returned over 4,200% since 1989, despite recent stock declines [11]. - The company has maintained a high return on invested capital (ROIC) averaging over 21% over the past five years, and generates free cash flow of $0.15 to $0.20 for every revenue dollar [10]. Investment Considerations - Hershey's stock is currently viewed as the cheapest it has been in years from a dividend yield perspective, with a history of increasing dividends for 15 consecutive years [12][13]. - The potential for significant investment returns exists if Hershey can overcome its current challenges and revert to historical performance levels as cocoa prices stabilize [14].

The Hershey Company (HSY 1.73%) is one of the less volatile businesses you can own.*Stock prices used were the afternoon prices of Feb. 11, 2025. The video was published on Feb. 13, 2025. ...

Core Insights - The individual has a strong interest in financial markets, particularly in fundamental analysis, which evaluates actual company performance rather than stock price movements [1] - The focus is primarily on long-term investments in stocks and ETFs, with a preference for US companies, while also analyzing European and Chinese firms [1] - The banking sector is highlighted as a key area of interest, viewed as essential for understanding economic health [1] Investment Approach - The investment strategy is characterized by a contrarian view, indicating a willingness to go against prevailing market trends [1] - The individual emphasizes the importance of macroeconomics in investment decisions, suggesting a holistic approach to market analysis [1]

Core Viewpoint - Hershey's stock has declined approximately 45% from its 2023 highs, resulting in a historically high dividend yield of 3.7%, raising questions about the company's ability to manage long-term challenges due to rising cocoa costs [1] Group 1: Case for Selling Hershey Stock - The rapid increase in cocoa prices is expected to negatively impact profit margins, leading to weak financial results for Hershey for potentially several years as the cocoa market stabilizes [2] - Chronic underinvestment in cocoa production, aging trees, crop diseases, and adverse weather conditions are fundamental issues affecting cocoa supply [3] - Hershey's hedging strategies have mitigated cocoa price volatility, but these hedges will expire, and the company has warned of a potential 36% earnings decline in 2025, with challenges likely extending beyond that year [4] Group 2: Case for Holding Hershey Stock - Hershey has experience navigating commodity cycles and plans to implement cost-cutting and price-increasing strategies, which are typical responses in the consumer staples sector [5] - Despite a societal shift towards healthier diets, chocolate remains a popular indulgence, suggesting that price increases may be accepted by consumers [6] - The significant stock price drop and high dividend yield indicate that much of the negative impact may already be reflected in the stock price, similar to conditions during the Great Recession [6] Group 3: Case for Buying Hershey Stock - The Hershey Trust, which controls the company, has a vested interest in ensuring stable operations and reliable dividend growth, aligning with investor interests [9] - The Trust's influence allows Hershey to prioritize long-term strategies over short-term pressures from Wall Street, providing the company with time to address current challenges [10] - Investing in Hershey at a historically high yield could be advantageous for long-term investors who recognize the potential for recovery as cocoa issues are resolved [11]

Group 1: Company Overview - The Hershey Company is one of the largest confectionery companies in the United States, known for its iconic products like Hershey bars and Reese's [1] - Hershey's product portfolio includes not only chocolate brands such as Reese's, Kit Kat, and Cadbury, but also non-chocolate confections like Twizzlers and Jolly Rancher, and salty snacks like Dot's Pretzels and Skinny Pop [2][3] Group 2: Financial Performance - Hershey has a strong dividend track record, having increased its dividend annually for 15 years, with a growth rate of approximately 10% per year over the past decade [3][4] - The current dividend yield stands at 3.6%, which is near the highest levels in the company's history, indicating a potential buying opportunity for long-term investors [4][5] Group 3: Current Challenges - The primary challenge facing Hershey is the recent surge in cocoa prices, which could negatively impact profit margins starting in 2025 as hedging efforts roll off [6] - Additional concerns include the potential impact of new weight loss drugs and a government shift towards promoting healthier lifestyles, which may affect demand for Hershey's products [8] Group 4: Market Sentiment and Valuation - Despite the challenges, Hershey's business is not expected to face long-term decline, and the stock has fallen 45% since reaching all-time highs in 2023, suggesting it may be undervalued [9] - Traditional valuation metrics, such as price-to-sales and price-to-earnings ratios, indicate that the stock price is currently below its five-year averages, reinforcing the notion of a buying opportunity [9]

Shares of candy and snack company Hershey (HSY 4.08%) went up on Thursday after the company reported financial results for the fourth quarter of 2024. As of 2:30 p.m. ET, Hershey stock was up about 5%.A good end to a challenging yearIn Q4, Hershey outperformed expectations on both the top and the bottom line. It generated nearly $2.9 billion in net sales, which was up almost 9% year over year. And it had net income of nearly $800 million, which more than doubled from the same quarter of 2023.Hershey stock m ...

Hershey expects the surge in cocoa prices to continue to outpace the company’s price increases on its chocolate products.As a result, the company expects to see its adjusted gross profit margin contract this year, Hershey Senior Vice President and Chief Financial Officer Steve Voskuil said Thursday (Feb. 6) in prepared remarks for the company’s quarterly earnings call.“Historically high cocoa prices, sugar and other raw material inflation, along with incremental labor inflation, new tariffs and negative pro ...

The Hershey Company (HSY) reported solid fourth-quarter 2024 results, as both top and bottom lines improved year over year and beat the Zacks Consensus Estimate.Management remains impressed with the strong consumer response to innovation, marketing initiatives and in-store execution. While rising cocoa prices are expected to create considerable pressure on 2025 earnings, the focus remains on sustaining top-line and market share growth, executing transformation and productivity initiatives, and positioning t ...

Key TakeawaysHershey beat profit and sales estimates as the chocolate maker's price hikes helped to offset the higher cost of cocoa.The company also cut selling, marketing, and administrative expenses.Hershey warned that the soaring price of cocoa will hurt full-year earnings. Shares of The Hershey Co. (HSY) advanced 5% Thursday when the chocolate maker reported better-than-anticipated results as price hikes helped offset the rising cost of cocoa. The company with brands including its namesake chocolate bar ...

The Hershey Company (NYSE:HSY) Q4 2024 Earnings Conference Call February 6, 2025 8:30 AM ET Company Participants Anoori Naughton - Senior Director of Investor Relations Michele Buck - Chairman and Chief Executive Officer Steve Voskuil - Senior Vice President and Chief Financial Officer Conference Call Participants Andrew Lazar - Barclays Ken Goldman - J.P. Morgan Max Gumport - BNP Robert Moskow - TD Cowen Alexia Howard - Bernstein Peter Galbo - Bank of America Todd Palmer - Citi Jim Salera - Stephens Leah J ...