Financial Data and Key Metrics Changes - The company anticipates a non-algorithmic year for both top and bottom lines in 2026, with a focus on balanced growth across its portfolio [9][10] - Cocoa costs have moderated significantly, although the company still expects year-over-year inflation [9][10] - The long-term revenue growth algorithm is projected at 2%-4%, with EPS showing potential for upside [10][44] Business Line Data and Key Metrics Changes - The everyday CMG business has shown double-digit growth in the last four weeks, indicating strong performance [18][27] - Halloween sales have been disappointing, with a slow start attributed to weather and timing, but the company is analyzing consumer insights for future improvements [26][28] Market Data and Key Metrics Changes - The competitive landscape remains rational, with no significant price gaps causing concern [22][59] - The convenience store channel is performing well, with a 6% growth in CMG, and the company is focused on enhancing its presence in this segment [79][80] Company Strategy and Development Direction - The company is committed to investing in its brands while rebuilding margins over the long term [10][110] - Innovation is a key focus, with successful products like REESE'S OREO driving growth, and a robust pipeline planned for 2026 and beyond [35][36] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenging consumer environment but remains optimistic about the category's resilience [88][90] - There is cautious optimism regarding cocoa prices and potential tariff relief, with ongoing monitoring of consumer health and demand [44][90] Other Important Information - The company is experiencing a shift in tax rates due to various factors, including adjustments in reserves and procurement strategies [108][109] - The international segment is currently loss-making but is expected to grow share in core markets despite cocoa challenges [62] Q&A Session Summary Question: Insights on 2026 expectations and EPS growth - Management discussed the balanced growth strategy and the importance of defining success for 2026, emphasizing long-term investments [10][11] Question: Elasticity and pricing expectations - Management indicated that elasticity is a significant factor in planning for next year, with current pricing aligning with expectations [12][13] Question: Halloween sales performance - Management noted that Halloween sales have been soft, with a focus on learning from consumer insights for future seasons [26][28] Question: Competitive pricing environment - Management highlighted the rationality of the U.S. market compared to Europe, with no major price gaps causing concern [22][59] Question: Innovation pipeline for 2026 - Management confirmed a strong innovation pipeline, with successful products driving growth and plans for continued innovation [35][36] Question: Consumer health and SNAP program impacts - Management acknowledged the challenging consumer sentiment but noted minimal expected impact from SNAP changes on the business [88][90] Question: Cocoa cost outlook and pricing strategy - Management expressed cautious optimism about cocoa prices potentially turning deflationary, while maintaining a focus on balanced recovery [54][96]

Financial Data and Key Metrics Changes - The company anticipates a non-algorithm top and bottom line year for 2026, with cocoa costs moderating significantly, although year-over-year inflation is still expected [7][8] - The long-term revenue growth algorithm is projected at 2% to 4%, with potential upside for EPS growth in 2026 [9][40] Business Line Data and Key Metrics Changes - The everyday CMG business has shown double-digit growth over the past four weeks, indicating strong performance in that segment [16][17] - The core business experienced close to 5% growth in Q3, excluding the impact of new innovations like Reese's Oreo [32] Market Data and Key Metrics Changes - The company noted that Halloween sales have been disappointing, with a slow start to the season, but there are opportunities to learn from consumer insights for future seasons [25][27] - The international segment faced challenges, resulting in a loss-making quarter, but the company remains optimistic about growth and share gains in core markets [87][88] Company Strategy and Development Direction - The company is focused on balanced growth across its portfolio while investing in brands and innovation to recover margins over the long term [9][32] - There is a strong emphasis on innovation, with a robust pipeline planned for 2026 and 2027, particularly in the salty snacks category [32][95] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the consumer market is challenging, but the category remains resilient, with expectations for continued growth despite pressures [117][120] - The company is optimistic about cocoa costs moderating and potential tariff relief, which could positively impact future performance [42][40] Other Important Information - Cocoa prices are still 70% higher than in 2023, and the company is working closely with retailers to manage pricing strategies effectively [29][30] - The company is investing in digital marketing and innovation to drive performance during key seasons like Halloween and the holidays [35][95] Q&A Session Summary Question: Insights on 2026 expectations and EPS growth - Management discussed the balanced growth and the importance of defining success for 2026, focusing on category growth and margin recovery [8][9] Question: Elasticity and pricing expectations - Management indicated that elasticity is a significant factor for planning, with current expectations being cautiously optimistic [11][12] Question: Halloween sales performance - Management acknowledged a slow start to Halloween but emphasized the importance of learning from consumer insights for future improvements [25][27] Question: International market challenges - Management noted that while the international segment is currently loss-making, they are optimistic about future growth and share gains [87][88] Question: Innovation pipeline for 2026 - Management highlighted the importance of innovation, particularly with successful products like Reese's Oreo, and a strong pipeline for future growth [32][95] Question: Consumer health and SNAP program impacts - Management stated that while consumer sentiment is under pressure, the category remains resilient, and the impact of SNAP changes is expected to be minimal [117][120]

Core Insights - Hershey reported quarterly earnings of $1.3 per share, exceeding the Zacks Consensus Estimate of $1.09 per share, but down from $2.34 per share a year ago, representing an earnings surprise of +19.27% [1] - The company achieved revenues of $3.18 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.79% and up from $2.99 billion year-over-year [2] - Hershey has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The immediate price movement of Hershey's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.55 on revenues of $2.98 billion, and for the current fiscal year, it is $5.95 on revenues of $11.53 billion [7] Industry Context - The Food - Confectionery industry, to which Hershey belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Hershey's stock performance [5][6]

Financial Data and Key Metrics Changes - Total Hershey net sales increased by 6.5% year-over-year, with organic constant currency net sales growth of 6.2%, driven by strong innovation and strategic brand investments [8][21] - Adjusted gross margin decreased by 850 basis points year-over-year to 31.8%, impacted by commodity inflation and unfavorable mix, partially offset by higher volume and net price realization [25][29] - Adjusted earnings per share (EPS) is expected to decline between 36% and 37% due to higher supply chain costs and strategic brand investments [20][29] Business Line Data and Key Metrics Changes - North America Confectionery segment net sales increased by 5.6% year-over-year, with a 40 basis point benefit from the Sour Strips acquisition [22] - North America salty snacks segment net sales increased by 10%, with volume growth of approximately 11% driven by brands like Dots and Skinny Pop [23][15] - International segment net sales increased by 12.1%, with strong growth in Brazil and Europe, driven by net price realization and innovation [24][18] Market Data and Key Metrics Changes - Retail takeaway growth in the US candy, mint, and gum category was 5.4%, with nonseasonal business increasing to 6.6% [9] - Consumption growth exceeded category growth in four of the top five franchises, with notable increases in Reese's (7%), Hershey (11%), and Jolly Rancher (nearly 30%) [10] - The Halloween season began slower than anticipated, but the company remains confident in consumer participation rates [12][13] Company Strategy and Development Direction - The company aims to become a multi-category snacking leader, focusing on strong execution and innovation [7][6] - Plans to increase investments in technology for consumer data insights and supply chain agility in 2026 [14][30] - The company is committed to managing cost inflation and driving productivity to enable brand investments [14][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying trajectory of the business, raising the net sales outlook to approximately 3% growth [19] - The company is optimistic about cocoa supply fundamentals improving, despite ongoing inflation challenges [30][31] - Management acknowledged the dynamic marketplace and the need for flexibility in investment strategies [32] Other Important Information - The company did not repurchase any shares in the third quarter, with $470 million remaining from the $500 million authorization [28] - Capital expenditures for the third quarter were $86 million, reflecting a decrease from the prior year [27] Q&A Session Summary Question: What are the expectations for the Halloween season? - Management noted that while Halloween performance has been disappointing, they are analyzing trends and adjusting strategies for future seasons [12][13] Question: How is the company addressing commodity inflation? - The company is committed to managing cost inflation through various levers and is focused on productivity to support brand investments [14][30] Question: What is the outlook for international markets? - The company expects low single-digit constant currency growth in Mexico, facing economic challenges but gaining share in chocolate [18]

Hershey raised its full-year outlook as higher prices bolstered the candymaker’s performance https://t.co/f8Ea0goNpK ...

Hershey reported lower third-quarter profit as tariffs and poor harvests in West Africa raise the price of cocoa inputs. ...

Financial Performance - Consolidated net sales for Q3 2025 were $3,181.4 million, an increase of 6.5% compared to Q3 2024[5] - Reported net income was $276.3 million, or $1.36 per diluted share, a decrease of 38.2% year-over-year[5] - Adjusted earnings per share-diluted were $1.30, a decrease of 44.4% compared to the previous year[5] - Operating profit for Q3 2025 was $434,583,000, a decrease of 29.2% from $613,164,000 in Q3 2024[44] - Total net sales for the company increased by 6.5% to $3,181,418, while total segment income decreased by 22.4% to $615,615[47] - Operating profit fell by 29.1% to $434,583, with income before income taxes down 28.3% to $371,910[47] Segment Performance - North America Confectionery segment net sales increased by 5.6% to $2,615.6 million, with a segment income decrease of 21.2%[21] - North America Salty Snacks segment net sales rose by 10.0% to $321.0 million, with a segment income increase of 6.9%[24] - International segment net sales increased by 12.1% to $244.8 million, but reported a loss of $13.6 million[26] - North America Confectionery net sales increased by 5.6% to $2,615,600, while segment income decreased by 21.2% to $571,475[47] - North America Salty Snacks net sales rose by 10.0% to $321,020, with segment income up 6.9% to $57,747[47] - International segment net sales grew by 12.1% to $244,798, but segment income turned to a loss of $13,607 compared to a profit of $14,207 last year[47] Cost and Expenses - Unallocated corporate expense increased by 38.9% to $193.1 million, primarily due to higher incentive compensation costs[29] - The company incurred business realignment costs of $2,211,000 in Q3 2025, compared to $27,635,000 in Q3 2024[44] - Unallocated corporate expenses rose by 38.9% to $193,128, impacting overall profitability[47] Tax and Profitability Metrics - The effective tax rate for Q3 2025 was approximately 25.7%, an increase of 1,170 basis points compared to Q3 2024[18] - Reported gross profit for Q3 2025 was $1,037,334,000, compared to $1,232,719,000 in Q3 2024, reflecting a decline of 15.8%[33] - Reported gross margin for Q3 2025 was 32.6%, down from 41.3% in Q3 2024[36] - Non-GAAP gross margin for Q3 2025 was 31.8%, compared to 40.3% in Q3 2024[36] - Non-GAAP net income for Q3 2025 was $263,699,000, down 44.4% from $474,238,000 in Q3 2024[33] Outlook and Strategic Initiatives - The company raised its full-year net sales growth outlook to approximately 3%[6] - The company is focused on enhancing long-term profitability through initiatives like the Advancing Agility & Automation Initiative[39] Balance Sheet Highlights - Cash and cash equivalents increased to $1,163,017 from $730,746, reflecting a significant liquidity improvement[49] - Total assets rose to $13,579,426 from $12,946,861, indicating growth in the company's asset base[49] - Long-term debt increased to $4,677,086 from $3,190,210, suggesting a rise in leverage[49] - Total stockholders' equity decreased to $4,564,446 from $4,714,654, reflecting a decline in equity value[49]

Core Insights - The Hershey Company reported strong third-quarter results, exceeding expectations due to innovation, strategic brand investments, and effective market execution, leading to an upward revision of its full-year outlook for net sales and earnings per share [2][3]. Financial Performance - Consolidated net sales for Q3 2025 reached $3,181.4 million, marking a 6.5% increase compared to Q3 2024. Organic, constant currency net sales rose by 6.2% [8][10]. - Reported net income was $276.3 million, or $1.36 per diluted share, reflecting a 38.2% decrease year-over-year. Adjusted earnings per share were $1.30, down 44.4% [8][10]. - The company anticipates net sales growth of approximately 3% for the full year 2025, up from a previous estimate of at least 2% [4][5]. Segment Performance - North America Confectionery segment net sales increased by 5.6% to $2,615.6 million, with organic, constant currency net sales up 5.2% driven by net price realization [16][36]. - North America Salty Snacks segment net sales grew by 10.0% to $321.0 million, with volume increasing approximately 11 points [19][21]. - International segment net sales rose by 12.1% to $244.8 million, with a volume increase of approximately 6% [23][36]. Cost and Margin Analysis - Reported gross margin decreased to 32.6% from 41.3% in Q3 2024, while adjusted gross margin fell to 31.8% from 40.3% [11][28]. - Selling, marketing, and administrative expenses increased by 1.5% year-over-year, with advertising expenses down by 5.0% [12][36]. - The reported operating profit was $434.6 million, a decrease of 29.1% compared to the prior year, resulting in an operating profit margin of 13.7% [13][36]. Tax and Corporate Expenses - The effective tax rate for Q3 2025 was reported at 25.7%, an increase of 1,170 basis points from the previous year [14][36]. - Unallocated corporate expenses rose by 38.9% to $193.1 million, primarily due to higher incentive compensation and consulting fees [25][36].

Core Insights - U.S. retailers are increasing discounts on Hershey products in anticipation of Halloween, which is a significant sales period for the company [1] - The price hikes by Hershey are attributed to rising costs from tariffs and inflation in cocoa prices [1] Retail Trends - Retailers are responding to the competitive landscape by offering more promotions on Hershey goods as Halloween approaches [1] - The increase in discounts may indicate a strategy to maintain sales volume despite higher prices [1] Pricing Strategy - Hershey has raised prices to offset increased costs, which could impact consumer purchasing behavior during the holiday season [1] - The company's pricing adjustments reflect broader trends in the confectionery industry, where cost pressures are becoming more pronounced [1]

Core Insights - The Hershey Company (HSY) is expected to report a revenue increase of 4.3% year-over-year, with third-quarter 2025 revenues estimated at $3.12 billion [1] - The consensus estimate for earnings has risen to $1.08, although this reflects a significant decrease of 53.9% compared to the previous year's figure [2] - Hershey's transformation initiatives and integrated operating model are anticipated to support solid sales growth, aided by supply chain improvements and enhanced marketing efforts [3] Revenue Growth Factors - Recent pricing actions, particularly across the U.S. confection portfolio, are expected to contribute to top-line expansion, alongside the Advancing Agility & Automation (AAA) program which is unlocking cost efficiencies [4] - Strong brand equity and innovation are sustaining volume momentum across retail channels, likely benefiting HSY's revenue in the third quarter [4] Profitability Concerns - Hershey's profitability is under pressure due to record-high cocoa prices, tariffs, and increased brand investments, which are expected to negatively impact margins [5] - The adjusted gross margin is projected to contract by 60 basis points to 35.3% for the third quarter [5] Earnings Predictions - The model predicts an earnings beat for Hershey, supported by a positive Earnings ESP of +0.19% and a Zacks Rank of 3 (Hold) [6] - Other companies with favorable earnings combinations include Vital Farms and Corteva, which are also expected to report growth in both top and bottom lines [7][9]