Core Insights - Hershey continues to lead in Halloween-themed products, introducing innovative flavors and returning favorites to enhance consumer engagement during the festive season [1][4]. New Products and Innovative Delights - Kit Kat® Ghost Toast features a new cinnamon toast flavored creme, available in various sizes for a limited time [2]. - Reese's Werewolf Tracks combines vanilla-flavored creme, milk chocolate, and peanut butter, offered in multiple sizes [2]. - Special edition Hershey's Milk Chocolate Harry Potter™ Bars feature engravings of Hogwarts houses, available in 9.45 oz bags [2]. - Twizzlers Ghosts are introduced as the first Halloween shape, available in 8.5 oz bags [2]. - Halloween-themed SkinnyPop and Pirate's Booty snacks are available, with 79% of Halloween shoppers planning to purchase salty snacks this season [3]. Returning Favorites - Reese's Pumpkins and Reese's Skeletons are back, available in various sizes for sharing and trick-or-treating [3]. - Hershey's Harry Potter™ Kisses are available in limited-edition bags and new canes, featuring whimsical foils [3]. - Chocolate & Sweets Assortments include HARIBO® Goldbears® in Hershey assortment bags, catering to diverse consumer preferences [3]. Company Overview - The Hershey Company generates over $11.2 billion in annual revenues, employing more than 20,000 people globally [5]. - Hershey's product portfolio includes over 90 brand names across approximately 80 countries, emphasizing a commitment to quality and sustainability [5].

Core Insights - Hershey has reduced its yearly profit and sales guidance following a 17% decline in second-quarter sales, reflecting a broader trend of consumer pullback amid persistent inflation [1][2] - The company's stock initially dropped 4.5% but later rebounded by 5% [1] - Hershey's market capitalization stands at $38.83 billion, and it has historically maintained or grown its market share during economic downturns [1] Financial Performance - Second-quarter net sales decreased to $2.07 billion, falling short of analysts' expectations of $2.31 billion [2] - North America segment sales, which typically account for 80% of revenue, fell to $1.58 billion from $1.99 billion year-over-year [2] - Adjusted earnings per share dropped to $1.27, a 36.8% decline from the previous year, and below the expected $1.43 [2] - Organic volume saw an 18% decrease, while gross margin fell to 40.2%, down from 45.5% the previous year [2] Guidance and Market Trends - The company now anticipates a sales growth of 2%, revised down from a previous estimate of 2% to 3% [3] - Adjusted earnings per share are expected to experience a slight decline, contrasting with earlier expectations of no change [3] - CEO Michele Buck noted the impact of cautious consumer spending but highlighted growth in the confection category and momentum in the Salty Snacks portfolio [3] Segment Performance - The North America Salty Snacks segment reported net sales of $289.9 million, a 6.4% increase from the previous year, attributed to volume growth [4] - Salty snack segment income rose to $52.2 million, up 19.2% year-over-year [4] - Conversely, the North America Confectionery segment experienced a 20.7% decline in net sales, with income down 29.3% from the same period last year, totaling $464.5 million [4]

Core Viewpoint - The Hershey Company reported disappointing second-quarter 2024 results, with both earnings and net sales declining year over year, missing consensus estimates, and management has lowered its sales and earnings guidance for 2024 [1][2][8] Financial Performance - Adjusted earnings were $1.27, down 36.8% year over year, missing the Zacks Consensus Estimate of $1.44 [2] - Consolidated net sales were $2,074.5 million, a decline of 16.7% from the previous year, also missing the consensus estimate of $2,297.5 million [2] - On a constant-currency basis, organic sales fell by 16.8%, primarily due to reductions in retailer inventory in North America and international markets [2] - Adjusted gross margin contracted to 43.2%, down 200 basis points year over year, mainly due to higher commodity costs [2] Operating Expenses - Selling, marketing, and administrative expenses decreased by 5.4% year over year, primarily due to lower marketing expenses [3] - Adjusted operating profit was $383.5 million, down 32.8% year over year, with the operating profit margin contracting 440 basis points to 18.5% [3] Segment Performance - North America Confectionery segment net sales fell 20.7% year over year to $1,579.8 million, attributed to planned inventory reductions and shifts in shipment timing [4] - The North America Salty Snacks segment saw net sales rise 6.4% to $289.9 million, driven by volume growth despite unfavorable price realization [4][5] - International segment net sales dropped 8.9% year over year to $204.8 million, with organic sales declining 10.4% [6] Guidance and Future Outlook - Management now expects approximately 2% year-over-year net sales growth for 2024, down from the previous range of 2-3% [8] - Adjusted earnings per share are projected to decline slightly to a range of $9.49-$9.59, compared to the earlier forecast of no change year over year [8] - Capital expenditure is expected to be between $600-$625 million for 2024, focusing on core confection capacity expansion and digital infrastructure investments [7]

Financial Data and Key Metrics - The company experienced a 6% impact from lower retail inventory and a 2% to 3% impact from the Halloween shift in North American Confectionery [9] - The company expects to achieve 6 to 7 points of net price realization from recent pricing actions [13] - Gross margin is expected to decline by 200 basis points for the full year, with some input cost timing favorability in Q2 [27][28] Business Line Data and Key Metrics - North American Confectionery saw weaker market share trends in core chocolate, particularly in everyday items, with pressure in the C-store channel and an uptick in take-home and club stores [16][18] - The company expects stronger performance in the second half due to innovation, seasonal programming, and lapping retailer merch reductions [17][19] - Salty snacks, particularly Dot's and SkinnyPop, are showing strong trends, with Dot's benefiting from distribution expansion and SkinnyPop expected to regain momentum in the back half [40][61][62] Market Data and Key Metrics - Consumers are shifting spending away from convenience stores to mass and dollar stores due to discretionary spending pullbacks [43][44] - The company expects historic elasticity levels (around 1) for the recent price increase in North American Confectionery [45][46] Company Strategy and Industry Competition - The company is taking a measured approach to pricing, focusing on passing on some inflation while maintaining category rationality [12][13] - Innovation, particularly in sweets with the Shaq launch, and seasonal programming are key drivers for the back half [19][40] - The company is leveraging cost reduction, productivity, and formulation changes to manage cocoa price volatility [50][74] Management Commentary on Operating Environment and Future Outlook - Management is confident in the back half due to strong visibility into seasonal orders, retailer collaboration, and innovation [10][19] - Cocoa prices are expected to remain elevated, necessitating price increases, but the company is monitoring the market for future adjustments [12][49][51] - The company is focused on optimizing reinvestment and offering value through price points, innovation, and promotional activities [31][32] Other Important Information - The company completed its S/4 ERP implementation, which is foundational for its transformation program and cost savings initiatives [86] - Marketing support is expected to remain in line with sales growth for both 2024 and 2025 [57][58] Q&A Session Summary Question: Impact of lower retail inventory and Halloween shift on North American Confectionery [9] - Answer: The company views the inventory adjustments as a reversion to traditional order patterns, with strong visibility into seasonal orders and no material impact expected for the year [10] Question: Details on recent pricing actions [11] - Answer: The pricing covers select products, with a 6-7% net price realization expected, and the company is assuming historic elasticity levels [12][13] Question: Market share trends in core chocolate [16] - Answer: Share losses were driven by weaker C-store trends and reduced retailer merch, but the company expects improvement in the back half due to innovation and seasonal programming [17][18][19] Question: Consumer receptivity to price increases [29] - Answer: The company is taking a surgical approach to pricing, focusing on key price points and optimizing reinvestment to maintain value for consumers [30][31][32] Question: Cocoa price coverage and gross margin outlook [33][34] - Answer: The company is largely locked in on cocoa for 2024 but is monitoring the market for 2025, with gross margin expected to face headwinds from commodity inflation and seasonal mix [34][53][54] Question: Marketing support and portfolio optimization [57][69] - Answer: Marketing support will remain in line with sales growth, and the company is focused on optimizing its portfolio to meet consumer needs, including expanding into salty snacks [57][70] Question: Long-term growth initiatives [85] - Answer: The company is making progress on its transformation program, including digital and workforce planning, despite the volatile environment [86]

Financial Performance - Net sales for Q2 2024 were $2,074.5 million, a decrease of 16.7% from $2,490.3 million in Q2 2023, primarily due to an 18% volume decline [153]. - Gross profit decreased to $833.8 million in Q2 2024, down 26.4% from $1,132.1 million in Q2 2023, with a gross margin of 40.2% compared to 45.5% in the prior year [153]. - Operating profit fell to $287.9 million in Q2 2024, a decrease of 48.7% from $560.6 million in Q2 2023, resulting in an operating profit margin of 13.9% [161]. - Net income for Q2 2024 was $180.9 million, down 55.6% from $406.9 million in Q2 2023, with diluted net income per share of $0.89 compared to $1.98 [153]. - Net sales for the first six months of 2024 were $5,327.2 million, down $150.7 million or 2.8% from $5,477.9 million in the same period of 2023, primarily due to a volume decrease of approximately 6% [166]. - Operating profit for the first six months of 2024 was $1,345.9 million, a decrease of $14.7 million or 1.1% compared to $1,360.6 million in the same period of 2023, with operating profit margin increasing to 25.3% [171]. - Net income was $978.3 million in the first six months of 2024, a decrease of $15.9 million, or 1.6%, compared to $994.2 million in the same period of 2023 [175]. Tax and Expenses - The effective income tax rate increased to 26.4% in Q2 2024 from 7.4% in Q2 2023, influenced by state taxes and tax reserves [164]. - Selling, marketing, and administrative expenses decreased by 5.4% to $541.0 million in Q2 2024, with a notable 15.4% reduction in advertising expenses [159]. - Net interest expense rose to $81.2 million in the first six months of 2024, an increase of $6.9 million or 9.2% compared to $74.3 million in the same period of 2023, due to higher rates on short-term and long-term debt [172]. - Unallocated corporate expense decreased by $29.3 million, or 8.1%, to $334.4 million in the first six months of 2024, primarily due to lower acquisition and integration-related costs [194]. Segment Performance - North America Confectionery segment net sales were $1,579.8 million in Q2 2024, down $413.3 million or 20.7% from $1,993.1 million in Q2 2023, primarily due to volume declines [180]. - North America Salty Snacks segment net sales increased by $22.6 million, or 4.2%, to $565.0 million in the first six months of 2024, reflecting volume growth of approximately 5% [187]. - International segment net sales decreased by $15.2 million, or 3.1%, to $475.1 million in the first six months of 2024, driven by volume declines of approximately 10% [192]. - Total segment income for the first six months of 2024 was $1,571.4 million, a decrease of $160.2 million or 9.2% compared to $1,731.6 million in the same period of 2023 [176]. Cash Flow and Capital Expenditures - Cash and cash equivalents totaled $467.1 million at June 30, 2024, an increase of $65.1 million compared to the 2023 year-end balance [195]. - Operating activities generated cash of $894.7 million in the first six months of 2024, a decrease of $155.1 million compared to $1,049.8 million in the same period of 2023 [199]. - Capital expenditures were $343.5 million in the first six months of 2024, an increase from $330.5 million in the same period of 2023, with expectations for 2024 capital expenditures to approximate $600 million to $625 million [201]. Shareholder Activities - Total dividend payments increased to $543.9 million in the first six months of 2024, an increase of $130.4 million compared to $413.5 million in the same period of 2023 [203]. - The company repurchased shares worth $494.2 million in the first six months of 2024, compared to $239.9 million in the same period of 2023 [206]. - The company completed a $500 million share repurchase authorization in March 2024, with approximately $470 million remaining under the new December 2023 authorization [208]. Market Conditions and Risks - Cocoa product prices increased approximately 75% since the beginning of 2024, contributing to gross margin pressures [149]. - The ongoing conflict between Russia and Ukraine has not materially impacted commodity prices or supply availability as of June 30, 2024 [150]. - The company is subject to various risks including supply chain disruptions, increased raw material costs, and competition, which could impact future financial results [213]. - The company anticipates that market demand for new and existing products may decline, affecting overall business performance [214].

For the quarter ended June 2024, Hershey (HSY) reported revenue of $2.07 billion, down 16.7% over the same period last year. EPS came in at $1.27, compared to $2.01 in the year-ago quarter.The reported revenue represents a surprise of -9.71% over the Zacks Consensus Estimate of $2.3 billion. With the consensus EPS estimate being $1.44, the EPS surprise was -11.81%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next ...

Hershey (HSY) came out with quarterly earnings of $1.27 per share, missing the Zacks Consensus Estimate of $1.44 per share. This compares to earnings of $2.01 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -11.81%. A quarter ago, it was expected that this chocolate bar and candy maker would post earnings of $2.74 per share when it actually produced earnings of $3.07, delivering a surprise of 12.04%.Over the last four quarters ...

HERSHEY, Pa., Aug. 1, 2024 /PRNewswire/ -- The Board of Directors of The Hershey Company (NYSE: HSY) today announced quarterly dividends of $1.370 on the Common Stock and $1.245 on the Class B Common Stock.  The dividends were declared July 31, 2024, and are payable September 16, 2024, to stockholders of record as of August 16, 2024.  It is the 378th consecutive regular dividend on the Common Stock and the 159th consecutive regular dividend on the Class B Common Stock.SOURCE The Hershey Company ...

Exhibit 99.1 FINANCIAL CONTACT: MEDIA CONTACT: Anoori Naughton Ashleigh Pollart anaughton@hersheys.com apollart1@hersheys.com Hershey Reports Second-Quarter 2024 Financial Results; Updates 2024 Net Sales and Earnings Outlook HERSHEY, Pa., August 1, 2024 - The Hershey Company (NYSE: HSY) today announced net sales and earnings for the second quarter ended June 30, 2024 and updated its 2024 net sales and earnings outlook. "Today's operating environment remains dynamic with consumers pulling back on discretiona ...

HERSHEY, Pa., Aug. 1, 2024 /PRNewswire/ -- The Hershey Company (NYSE: HSY) today announced net sales and earnings for the second quarter ended June 30, 2024 and updated its 2024 net sales and earnings outlook."Today's operating environment remains dynamic with consumers pulling back on discretionary spending," said Michele Buck, The Hershey Company President and Chief Executive Officer. "Our business has been impacted by these trends, but we are pleased to see continued growth in the confection category and ...