Core Viewpoint - The Hershey Company announced a public offering of $2 billion in notes with varying interest rates and maturities, intending to use the proceeds for debt repayment and general corporate purposes [1][2]. Group 1: Notes Offering Details - The company is offering $500 million of 4.550% notes due 2028, $500 million of 4.750% notes due 2030, $500 million of 4.950% notes due 2032, and $500 million of 5.100% notes due 2035 [1]. - The net proceeds will be used to repay all outstanding 0.900% Senior Notes and 3.200% Senior Notes, as well as certain short-term commercial paper borrowings, including accrued and unpaid interest [1]. Group 2: Regulatory and Contact Information - A registration statement for the Notes Offering has been filed with the U.S. Securities and Exchange Commission and is effective [2]. - Copies of the prospectus supplement and accompanying prospectus can be obtained from various financial institutions, including BofA Securities, Citigroup Global Markets, J.P. Morgan Securities, RBC Capital Markets, and U.S. Bancorp Investments [3]. Group 3: Company Overview - The Hershey Company is an industry-leading snacks company headquartered in Hershey, Pennsylvania, known for its iconic brands and commitment to ethical operations [4][5]. - The company employs over 20,000 people globally and offers more than 90 brand names in approximately 80 countries, including popular products like Hershey's, Reese's, and Kit Kat [4].

Group 1: DeepSeek Market Reaction - The release of a large language model by a Chinese hedge fund, DeepSeek, led to a one trillion dollar market crash, affecting companies like Taiwan Semiconductor and NVIDIA [3] - The market reaction was characterized as large and fueled by insufficient information, with many traders acting on incomplete understanding of the AI model's implications [3] - Lawmakers are considering banning DeepSeek on government devices, reflecting widespread corporate concerns about the application [4][5] Group 2: Hershey's Performance - Hershey reported a 9% increase in sales on a constant currency basis, with net income more than doubling, surprising analysts who expected a decline due to healthier eating trends [6][7] - The growth in sales of North American salty snacks was significant, with a 36% increase, attributed to acquisitions and improved distribution channels [7] - Hershey's ownership structure is unique, with the majority of voting stock controlled by the Milton Hershey School, which has different priorities than maximizing profits [8][9] Group 3: Eli Lilly's Growth - Eli Lilly reported a 45% year-over-year revenue growth, driven by the success of its weight loss drugs, positioning it alongside younger growth stocks [11] - The company's net income doubled to approximately $11.7 billion, up from $5.7 billion in 2023, indicating strong profitability [12] - Concerns exist regarding the sustainability of this growth, particularly with competition from other companies developing similar weight loss drugs [13][14] Group 4: Streaming Industry Challenges - The podcast discusses the challenges of producing television in the streaming era, highlighting a shift towards creating content primarily for marketing rather than for viewer engagement [18][19] - Executives in the streaming industry prioritize recognizable intellectual property and star power over artistic quality, leading to a less favorable environment for creative storytelling [20] - The current landscape is described as increasingly antagonistic towards artistic endeavors, with a focus on generating subscriptions rather than producing compelling content [20][24]

Core Viewpoint - The Hershey Company is conducting a public offering of notes to repay existing debt and for general corporate purposes [1][2]. Group 1: Notes Offering Details - The net proceeds from the Notes Offering will be used to repay all outstanding 0.900% Senior Notes due 2025 and 3.200% Senior Notes due 2025, as well as certain short-term commercial paper borrowings, including accrued and unpaid interest [1]. - A registration statement for the Notes Offering has been filed with the U.S. Securities and Exchange Commission and is effective [2]. Group 2: Company Overview - The Hershey Company is headquartered in Hershey, Pennsylvania, and is recognized as an industry-leading snacks company with over 20,000 employees globally [4]. - The company offers more than 90 brand names in approximately 80 countries, including popular products like Hershey's, Reese's, and Kit Kat [4]. - Hershey has a long-standing commitment to ethical operations and community support, exemplified by the establishment of the Milton Hershey School in 1909 [5].

Financial Performance - For the year ended December 31, 2024, net sales were $11,202.3 million, reflecting a slight increase of 0.3% compared to $11,165.0 million in 2023, primarily due to a favorable price realization of approximately 3%[140]. - Gross profit for 2024 was $5,300.9 million, representing a 6.1% increase from $4,997.8 million in 2023, with a gross margin of 47.3%, up from 44.8% in the previous year[139][146]. - Operating profit increased to $2,898.2 million in 2024, a 13.2% rise from $2,560.9 million in 2023, with an operating profit margin of 25.9%[153]. - Net income for 2024 was $2,221.2 million, a significant increase of 19.3% compared to $1,861.8 million in 2023, with diluted net income per share rising to $10.92 from $9.06[139]. - Selling, marketing, and administrative expenses decreased by 2.6% to $2,373.6 million in 2024, driven by lower corporate expenses and a decline in advertising costs[149]. - Cost of sales decreased to $5,901.4 million in 2024, down 4.3% from $6,167.2 million in 2023, influenced by favorable costs from commodity derivative instruments[145]. - The effective income tax rate decreased to 10.2% in 2024 from 14.3% in 2023, contributing to the increase in net income[139]. - Earnings Per Share (EPS) diluted rose to $10.92 in 2024, up $1.86, or 20.5%, from $9.06 in 2023[160]. Segment Performance - North America Confectionery segment net sales were $9,118.6 million in 2024, a slight decrease of $4.5 million from $9,123.1 million in 2023, driven by a 4% volume decline[168]. - North America Salty Snacks segment net sales increased to $1,135.7 million in 2024, up $43.0 million, or 3.9%, from $1,092.7 million in 2023[176]. - Segment income for North America Confectionery was $2,945.7 million in 2024, a decrease of $171.3 million, or 5.5%, compared to $3,117.0 million in 2023[170]. - North America Salty Snacks segment income increased to $199.4 million in 2024, up $41.1 million, or 26.0%, from $158.3 million in 2023[177]. - International segment net sales were $948.0 million in 2024, a slight decrease of 0.1% from $949.2 million in 2023, primarily due to unfavorable foreign currency exchange rates and volume decrease[182]. - Segment income for the International segment dropped to $111.5 million in 2024, a decrease of 24.8% from $148.3 million in 2023, mainly due to higher commodity costs and unfavorable foreign currency exchange rates[183]. Cash Flow and Capital Expenditures - Cash flow from operating activities increased to $2.5 billion in 2024, up by $208.4 million compared to $2.3 billion in 2023, driven by improvements in working capital management[193]. - Investing activities used cash of $960.3 million in 2024, a decrease from $1.2 billion in 2023, reflecting reduced investments in capabilities and technology[197]. - Financing activities used cash of $1.3 billion in 2024, compared to $1.1 billion in 2023, primarily for stock repurchases and dividend payments[198]. - Capital expenditures were $605.9 million in 2024, down from $771.1 million in 2023, as key strategic initiatives were completed[199]. - The company expects capital expenditures in 2025 to be approximately $425 million to $450 million, returning to historical levels[199]. Shareholder Returns - Total dividend payments increased to $1,084.8 million in 2024, up from $889.1 million in 2023, with dividends per share of Common Stock rising 23.0% to $5.480[200]. - Share repurchases totaled $494.2 million in 2024, including $400.0 million under pre-approved programs and $94.2 million to offset stock options[201]. Debt and Liquidity - Total short- and long-term debt increased to $5.1 billion in 2024, primarily due to a $587 million rise in short-term debt[205]. - The company maintains a $1.35 billion unsecured revolving credit facility, with $204 million of available capacity as of December 31, 2024[206]. - Future material cash requirements total $8,541.7 million, with $3,227.5 million due within one year[214]. - Approximately 80% of cash and cash equivalents were held by subsidiaries outside the U.S., with plans to reinvest earnings to avoid material tax implications[204]. Tax and Pension - The company maintains reserves for uncertain tax positions, reflecting the most likely outcome of tax audits and assessments[239]. - The company applies a more-likely-than-not threshold for recognizing uncertain tax positions, impacting income in the quarter of any changes[239]. - The expected long-term rate of return on pension plan assets was increased to 6.8% for 2024 from 6.7% in 2023, aligning with the historical average return of approximately 6.8% over the past 20 years[228]. - Cumulative unrecognized investment and actuarial losses for pension plans amounted to approximately $165 million as of December 31, 2024, which may increase future pension expenses if not offset by favorable investment returns or other factors[229]. - Pension expense for defined benefit pension plans is projected to be approximately $13 million in 2025, with future expenses dependent on investment performance and other variables[230]. Corporate Governance - The Hershey Trust Company maintains voting control over the company, influencing business decisions through its representatives on the Board[212].

Core Insights - The Hershey Company is reaffirming its full-year 2025 financial expectations for net sales and earnings per share, indicating a focus on maintaining growth despite market challenges [2] Financial Outlook - The company anticipates at least 2% growth in net sales for 2025 [2] - Reported earnings per share are expected to decline in the high-40% range [2] - Adjusted earnings per share are projected to decline in the mid-30% range [2] - The acquisition of Sour Strips is expected to contribute approximately 30 basis points to net sales growth for the full year [2] - Foreign currency exchange rates are anticipated to have a 30 basis point headwind on net sales growth for 2025 [2] Strategic Initiatives - The company is focusing on growth strategies and enhancing commercial capabilities to optimize its operating model and deliver long-term shareholder value [1]

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].

Core Viewpoint - The Hershey Company is characterized as one of the less volatile businesses available for investment [1] Company Summary - Hershey's stock prices referenced were from the afternoon of February 11, 2025, indicating a specific timeframe for the analysis [1] - The video discussing Hershey was published on February 13, 2025, providing context for the information presented [1]

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]