[Q2 2025 Financial Highlights and Outlook](index=1&type=section&id=Hershey%20Reports%20Second-Quarter%202025%20Financial%20Results) Hershey reported strong Q2 2025 net sales growth driven by prior-year comparisons, but profitability declined significantly, leading to a downward revision of full-year adjusted EPS guidance due to cost pressures [Second-Quarter 2025 Financial Results Summary](index=1&type=section&id=Second-Quarter%202025%20Financial%20Results%20Summary) Hershey reported a significant 26.0% increase in consolidated net sales to $2.61 billion for Q2 2025, largely driven by lapping prior-year inventory reductions related to an ERP implementation and a later Easter. Despite the strong sales, reported net income fell sharply by 65.2% to $62.7 million, and adjusted EPS decreased by 4.7% to $1.21, reflecting significant cost pressures Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Value | Change | | :--- | :--- | :--- | | Consolidated Net Sales | $2,614.7 million | ▲ 26.0% | | Organic, Constant Currency Net Sales | N/A | ▲ 26.3% | | Reported Net Income | $62.7 million | ▼ 65.2% | | Reported EPS-Diluted | $0.31 | ▼ 65.2% | | Adjusted EPS-Diluted | $1.21 | ▼ 4.7% | - The substantial net sales growth reflects the recovery from planned inventory reductions in Q2 2024 due to an ERP system implementation and the timing of Easter in 2025. First-half net sales growth was a more normalized 1.7%[5](index=5&type=chunk) - CEO Michele Buck highlighted that brand investments, innovation, and effective execution are driving sales and market share gains. The company is actively mitigating cocoa inflation through strategic pricing, productivity enhancements, and technology-enabled efficiencies[3](index=3&type=chunk) [2025 Full-Year Financial Outlook](index=2&type=section&id=2025%20Full-Year%20Financial%20Outlook) The company maintained its full-year net sales growth outlook of at least 2% but updated its earnings guidance downwards. Reported EPS is now expected to be down approximately 50%, and adjusted EPS is projected to decrease by 36% to 38%, primarily reflecting estimated full-year tariff expenses and commodity cost mitigation strategies Updated Full-Year 2025 Guidance | Metric | Prior Guidance | Current Guidance | | :--- | :--- | :--- | | Net Sales Growth | Up at least 2% | Up at least 2% | | Reported EPS Growth | Down high-40% range | Down ~50% | | Adjusted EPS Growth | Down mid-30% range | Down 36% to 38% | - Key financial expectations for 2025 include: - Tariff expense: ~$170 to $180 million - Adjusted effective tax rate: ~24% - Interest expense: ~$200 million - Capital expenditures: ~$425 to $450 million - Advancing Agility & Automation Initiative savings increased to ~$150 million (from $125 million)[9](index=9&type=chunk) Projected 2025 EPS Reconciliation (GAAP to Non-GAAP) | | 2025 (Projected, in $) | 2024 (in $) | | :--- | :--- | :--- | | Reported EPS – Diluted | $5.36 - $5.69 | $10.92 | | Adjusted EPS – Diluted | $5.81 - $6.00 | $9.37 | [Consolidated Financial Performance](index=3&type=section&id=Consolidated%20Financial%20Performance) Consolidated net sales growth was primarily volume-driven, but overall profitability was significantly impacted by higher commodity costs and increased marketing expenses [Components of Net Sales Growth](index=3&type=section&id=Second-Quarter%202025%20Components%20of%20Net%20Sales%20Growth) Q2 2025 consolidated net sales growth of 26.0% was driven by a 21-point increase in volume/mix and a 5-point contribution from price realization. The volume surge was primarily due to lapping the 2024 ERP implementation and a later Easter. The Sour Strips acquisition added 0.4 points, while foreign exchange was a 0.7-point headwind Q2 2025 Net Sales Growth Components | Segment | Reported Change | Organic Constant Currency Change | Price | Volume/Mix | | :--- | :--- | :--- | :--- | :--- | | North America Confectionery | 32.0% | 31.6% | 6% | 25% | | North America Salty Snacks | 8.8% | 8.8% | 5% | 4% | | International | 4.4% | 10.0% | 1% | 9% | | **Total Company** | **26.0%** | **26.3%** | **5%** | **21%** | [Consolidated Results Analysis](index=4&type=section&id=Second-Quarter%202025%20Consolidated%20Results) Despite strong sales, profitability was heavily impacted in Q2 2025. Adjusted gross margin fell 510 basis points to 38.1% due to higher commodity and manufacturing costs. Adjusted operating profit margin declined 280 basis points to 15.7% as these cost pressures and increased advertising spending outpaced the benefits from higher volume and pricing - Reported gross margin decreased by 970 basis points to 30.5%, while adjusted gross margin fell 510 basis points to 38.1%, primarily due to higher commodity and manufacturing costs[15](index=15&type=chunk) - Selling, marketing and administrative (SM&A) expenses rose 11.5%, with advertising and consumer marketing expenses increasing by 35.5% due to timing shifts from the prior year[16](index=16&type=chunk) - Adjusted operating profit increased 7.1% to $410.6 million, but the adjusted operating profit margin contracted by 280 basis points to 15.7% due to cost inflation and higher marketing spend[17](index=17&type=chunk) - The adjusted effective tax rate increased significantly by 840 basis points to 32.8%, driven by incremental non-U.S. tax reserves[18](index=18&type=chunk) [Segment Performance](index=5&type=section&id=Segment%20Performance) North America Confectionery and Salty Snacks segments showed strong sales, while International faced headwinds, and corporate expenses increased due to incentive compensation [North America Confectionery](index=5&type=section&id=North%20America%20Confectionery) The North America Confectionery segment delivered a robust 32.0% increase in net sales to $2.09 billion, driven by a 25-point volume gain from lapping the prior-year ERP implementation and a later Easter. Despite the sales growth, segment margin declined by 520 basis points to 24.2% as higher commodity, tariff, and manufacturing costs, along with increased advertising, offset price realization and volume gains North America Confectionery Q2 2025 Performance | Metric | Value (in millions) | Change vs. Q2 2024 | | :--- | :--- | :--- | | Net Sales | $2,085.5 million | ▲ 32.0% | | Segment Income | $503.9 million | ▲ 8.5% | | Segment Margin | 24.2% | ▼ 520 bps | - U.S. CMG retail takeaway grew 21.8% in the 12-week period, leading to a 90 basis point market share gain, driven by strong seasonal consumption and the later Easter[21](index=21&type=chunk) [North America Salty Snacks](index=6&type=section&id=North%20America%20Salty%20Snacks) The North America Salty Snacks segment reported solid net sales growth of 8.8% to $315.5 million, supported by a 4-point volume increase and 5-point price realization. Segment income grew by a strong 27.4%, and margin expanded by 310 basis points to 21.1%, driven by sales growth and productivity savings that more than offset higher supply chain costs North America Salty Snacks Q2 2025 Performance | Metric | Value (in millions) | Change vs. Q2 2024 | | :--- | :--- | :--- | | Net Sales | $315.5 million | ▲ 8.8% | | Segment Income | $66.5 million | ▲ 27.4% | | Segment Margin | 21.1% | ▲ 310 bps | - Strong retail performance continued, with Dot's Homestyle Pretzels sales up 13.0% and SkinnyPop up 4.0%, resulting in significant market share gains for both brands[24](index=24&type=chunk) [International](index=6&type=section&id=International) The International segment's net sales increased 4.4% to $213.7 million, with organic constant currency sales up 10.0%. The growth was primarily due to lapping the 2024 ERP inventory reduction. However, segment profit decreased by $5.2 million, and margin contracted by 290 basis points to 9.3%, pressured by cost inflation, foreign exchange headwinds, and higher advertising expenses. Performance was also impacted by category and regulatory headwinds in Mexico International Q2 2025 Performance | Metric | Value (in millions) | Change vs. Q2 2024 | | :--- | :--- | :--- | | Net Sales | $213.7 million | ▲ 4.4% | | Organic Constant Currency Sales | N/A | ▲ 10.0% | | Segment Profit | $19.8 million | ▼ $5.2 million | | Segment Margin | 9.3% | ▼ 290 bps | - Excluding the ERP lap, volume declined more than expected, reflecting challenges in Mexico[25](index=25&type=chunk) [Unallocated Corporate Expense](index=7&type=section&id=Unallocated%20Corporate%20Expense) Unallocated corporate expense for Q2 2025 increased by 13.6% to $179.6 million compared to the prior year. The rise was primarily driven by higher incentive compensation, which was partially offset by reduced technology investments related to the ERP system upgrade in 2024 - Unallocated corporate expense increased by **$21.4 million**, or **13.6%**, to **$179.6 million**[28](index=28&type=chunk) - The increase was driven by higher incentive compensation, partially offset by lapping prior-year expenses for the ERP system upgrade[28](index=28&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=5&type=section&id=Reconciliation%20of%20Certain%20Non-GAAP%20Financial%20Measures) The company provides detailed reconciliations from GAAP to non-GAAP financial measures, primarily adjusting for derivative mark-to-market losses and business realignment activities [Summary of Non-GAAP Adjustments](index=5&type=section&id=Summary%20of%20Non-GAAP%20Adjustments) In Q2 2025, the company recorded pre-tax adjustments totaling $217.7 million that impacted GAAP comparability. The largest adjustment was $200.7 million in derivative mark-to-market losses, followed by $15.1 million for business realignment activities Items Impacting Comparability, Pre-Tax (in millions) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Derivative Mark-to-Market Losses (Gains) | $200.7 | $53.4 | | Business Realignment Activities | $15.1 | $39.0 | | Acquisition and Integration-Related Activities | $1.9 | $3.3 | | **Total Pre-Tax Impact** | **$217.7** | **$95.7** | [Reconciliation Tables](index=8&type=section&id=Reconciliation%20Tables) This section provides detailed reconciliations from reported (GAAP) to non-GAAP figures for key metrics. For Q2 2025, non-GAAP operating profit was $410.6 million compared to a reported operating profit of $192.8 million. Non-GAAP EPS-diluted was $1.21, while reported EPS-diluted was $0.31 Q2 2025 GAAP to Non-GAAP Reconciliation Summary (in thousands) | Metric | Reported (GAAP) | Non-GAAP | | :--- | :--- | :--- | | Gross Profit | $796,273 | $997,000 | | Operating Profit | $192,811 | $410,557 | | Net Income | $62,719 | $246,455 | Q2 2025 Margin Reconciliation | Metric | As Reported (GAAP) | Non-GAAP | | :--- | :--- | :--- | | Gross Margin | 30.5% | 38.1% | | Operating Profit Margin | 7.4% | 15.7% | | Effective Tax Rate | 57.9% | 32.8% | [Appendix I: Details of Non-GAAP Charges](index=10&type=section&id=Appendix%20I) This appendix details the nature of the adjustments made to arrive at non-GAAP figures. Key adjustments include mark-to-market gains/losses on commodity derivatives, costs from the 'Advancing Agility & Automation Initiative', and acquisition-related costs for the Sour Strips brand - **Derivative mark-to-market losses:** Gains/losses on commodity hedges are excluded from adjusted results until the related inventory is sold to better match economic exposure[37](index=37&type=chunk) - **Business realignment activities:** Charges in Q2 2025 related primarily to severance and employee benefit costs under the Advancing Agility & Automation Initiative[38](index=38&type=chunk) - **Acquisition and integration-related activities:** Costs in Q2 2025 were related to the acquisition of the Sour Strips brand[39](index=39&type=chunk) [Financial Statements](index=12&type=section&id=Financial%20Statements) This section presents the company's consolidated income statements, balance sheets, and supplementary segment results, detailing financial performance and position [Consolidated Statements of Income](index=12&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated income statement for the three months ended June 29, 2025, shows net sales of $2.61 billion, a gross profit of $796.3 million, and a net income of $62.7 million. This compares to a net income of $180.9 million in the same period last year, with the decline driven by a significant increase in cost of sales Q2 2025 Income Statement Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $2,614,718 | $2,074,480 | | Gross Profit | $796,273 | $833,745 | | Operating Profit | $192,811 | $287,821 | | Net Income | $62,719 | $180,894 | [Supplementary Information – Segment Results](index=13&type=section&id=Supplementary%20Information%20%E2%80%93%20Segment%20Results) This supplementary schedule provides a detailed numerical breakdown of net sales and segment income for each of the company's operating segments for the three and six months ended June 29, 2025. It shows the specific financial data underlying the segment performance analysis Q2 2025 Segment Income (in thousands) | Segment | Net Sales | Segment Income | | :--- | :--- | :--- | | North America Confectionery | $2,085,468 | $503,929 | | North America Salty Snacks | $315,519 | $66,480 | | International | $213,731 | $19,795 | | **Total Segment Income** | **N/A** | **$590,204** | [Consolidated Balance Sheets](index=14&type=section&id=Consolidated%20Balance%20Sheets) As of June 29, 2025, Hershey's balance sheet shows total assets of $13.65 billion and total liabilities of $9.13 billion. Key changes from year-end 2024 include a significant increase in inventories to $1.84 billion and a shift from short-term to long-term debt Balance Sheet Highlights (in thousands) | Account | June 29, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $4,425,553 | $3,759,457 | | Total Assets | $13,645,737 | $12,946,861 | | Total Current Liabilities | $2,893,307 | $3,929,495 | | Total Liabilities | $9,131,119 | $8,232,207 | | Total Stockholders' Equity | $4,514,618 | $4,714,654 |

Core Insights - The Hershey Company reported strong second-quarter results for 2025, with net sales reaching $2,614.7 million, a 26.0% increase compared to the same period in 2024, driven by effective brand investments and innovation [7][13] - The company updated its full-year earnings outlook, projecting a decrease in reported earnings per share by approximately 50% and adjusted earnings per share by 36% to 38% due to tariff expenses and commodity cost mitigation strategies [5][4] - Hershey's strategic pricing and productivity enhancements are aimed at mitigating cocoa inflation and maintaining balanced growth [2][4] Financial Performance - Consolidated net sales increased by 26.0% to $2,614.7 million, with organic, constant currency net sales up 26.3% [7][13] - Reported net income was $62.7 million, or $0.31 per share-diluted, reflecting a 65.2% decrease year-over-year [7][6] - Adjusted earnings per share-diluted decreased by 4.7% to $1.21 [7][6] Segment Performance - North America Confectionery segment net sales rose 32.0% to $2,085.5 million, with volume growth driven by inventory adjustments and seasonal timing [20][22] - North America Salty Snacks segment net sales increased by 8.8% to $315.5 million, supported by reduced trade promotions [23][26] - International segment net sales grew by 4.4% to $213.7 million, with organic, constant currency net sales up 10.0% [27][28] Cost and Margin Analysis - Reported gross margin decreased to 30.5% from 40.2% in the prior year, primarily due to higher commodity costs and derivative mark-to-market losses [14][34] - Adjusted gross margin was 38.1%, down from 43.2% year-over-year [34][14] - Selling, marketing, and administrative expenses increased by 11.5%, driven by higher advertising costs [15][29] Tax and Interest Expenses - The reported effective tax rate was 57.9%, an increase of 3,150 basis points compared to the previous year, influenced by foreign rate differentials [18][34] - Interest expense was approximately $200 million, reflecting higher leverage and interest rates [8][34] Future Outlook - The company anticipates tariff expenses of approximately $170 to $180 million for the full year, impacting its financial outlook [8][5] - Hershey's guidance does not account for the potential effects of the proposed acquisition of LesserEvil [4][5]

Hershey and Mondelez are combining two of their top-selling products—the Reese’s peanut butter cup and the Oreo cookie—in a sugary marriage they say consumers have been begging for https://t.co/JzoLRi2WMP ...

Market Overview - The U.S. markets have shown an upward trend, with the S&P 500 and Nasdaq Composite reaching all-time highs, increasing by 1.32% and 0.64% respectively last week [1] - Positive corporate earnings and expectations of easing tariffs and trade policies have bolstered investor confidence [1] - Concerns over inflation and signs of a potential economic slowdown are influencing the Federal Reserve's cautious stance on interest rates [1] Economic Indicators - The Conference Board's Leading Economic Indicator fell by 0.3% in June, indicating early signs of a slowdown, with weakened consumer expectations and fewer manufacturing orders [2] - The S&P Global's U.S. flash PMI data for July indicated an acceleration in business activity driven by the services sector, while the manufacturing PMI dropped to 49.5 [2] - Initial jobless claims decreased by 4,000 to 217,000 for the week ending July 19, suggesting a resilient labor market with limited layoffs [2] Stock Performance - AngloGold Ashanti plc's shares increased by 23.1% since its upgrade to Zacks Rank 1 on May 19, outperforming the S&P 500's 7.2% increase [3][4] - NN Group N.V. saw a return of 12.1% since its upgrade to Zacks Rank 1 on May 29, compared to the S&P 500's 8.4% increase [4] - Zacks Rank 1 stocks returned +6.51% in May 2025, outperforming the S&P 500's +4.47% [5] Portfolio Performance - A hypothetical portfolio of Zacks Rank 1 stocks has outperformed the S&P 500 index by more than 12 percentage points since 1988 [6] - The Zacks Focus List portfolio returned +8.84% in 2025 (through June 30) compared to +6.21% for the S&P 500 [14] - The Zacks Earnings Certain Admiral Portfolio (ECAP) returned +3.20% in Q1 2025, outperforming the S&P 500's -4.30% decline [18] Notable Stocks - Intellia Therapeutics, Inc. gained 60.3% over the past 12 weeks, while Caterpillar Inc. returned 41.3% in the same period [13][14] - OptimizeRx Corporation and Artisan Partners Asset Management saw increases of 18.2% and 14.6% respectively since their upgrades to Outperform [10] - Hershey Company returned 17.8% over the past 12 weeks, benefiting from investor interest in quality dividend stocks [20]

Company Performance - Hershey's stock closed at $187.12, reflecting a +1.75% increase from the previous day, outperforming the S&P 500's daily gain of 0.4% [1] - Over the past month, Hershey's shares gained 10.12%, significantly surpassing the Consumer Staples sector's loss of 0.48% and the S&P 500's gain of 4.61% [1] Upcoming Earnings - Hershey is set to disclose its earnings on July 30, 2025, with an expected EPS of $1.01, indicating a 20.47% decrease from the same quarter last year [2] - The consensus estimate for revenue is $2.55 billion, representing a 22.82% increase compared to the same quarter of the previous year [2] Full Year Estimates - For the full year, analysts expect earnings of $5.77 per share and revenue of $11.52 billion, reflecting changes of -38.42% and +2.88% respectively from the previous year [3] Analyst Forecast Revisions - Recent revisions to analyst forecasts for Hershey are important as they indicate short-term business trends, with upward revisions suggesting positive sentiment towards the company's operations [4] Zacks Rank and Valuation - Hershey currently holds a Zacks Rank of 3 (Hold), with a recent 3.06% decline in the Zacks Consensus EPS estimate [6] - The company has a Forward P/E ratio of 31.9, which is a premium compared to its industry's Forward P/E of 24.4 [6] Industry Metrics - Hershey's PEG ratio stands at 6.93, higher than the Food - Confectionery industry's average PEG ratio of 4.96 [7] - The Food - Confectionery industry ranks in the top 41% of all industries, with a current Zacks Industry Rank of 99 [7][8]

Core Insights - Hershey's upcoming quarterly earnings report is expected to show earnings of $1.01 per share, a decline of 20.5% year-over-year, while revenues are forecasted to reach $2.55 billion, an increase of 22.8% year-over-year [1] - The consensus EPS estimate has been revised 9.1% lower in the last 30 days, indicating a reevaluation by analysts [1][2] Revenue Estimates - Analysts project 'Net Sales- North America Confectionery' to be $2.02 billion, reflecting a year-over-year increase of 27.6% [4] - 'Net Sales- North America Salty Snacks' is estimated at $306.06 million, indicating a 5.6% increase from the previous year [4] - The average estimate for 'Net Sales- North America' is $2.32 billion, suggesting a year-over-year change of 24.2% [4] - 'Net Sales- International' is expected to reach $227.95 million, representing an 11.3% increase year-over-year [5] Segment Income Estimates - 'Segment Income (loss)- North America Confectionery' is projected to be $470.57 million, slightly up from $464.50 million in the same quarter last year [5] - 'Segment Income (loss)- Unallocated corporate expense' is estimated at -$220.51 million, contrasting with $158.23 million from the previous year [6] - 'Segment Income (loss)- North America Salty Snacks' is expected to be $55.67 million, compared to $52.20 million in the same quarter last year [6] - 'Segment income (loss)- International' is projected at $18.48 million, down from $25.01 million year-over-year [7] - 'Segment income (loss)- North America' is expected to be $526.24 million, compared to $516.70 million from the previous year [7] Stock Performance - Hershey's shares have increased by 10.1% over the past month, outperforming the Zacks S&P 500 composite, which rose by 4.6% [7]

Why are Hershey's prices rising?Read more: https://t.co/SYJsLXWchg https://t.co/CKe31BEYGk ...

Group 1 - The global cocoa production regions, Ghana and Ivory Coast, have faced continuous poor harvests due to climate change, leading to a significant increase in cocoa futures prices over the past two years [1][3] - Currently, cocoa prices remain high despite a decrease from their peak, directly impacting chocolate production costs, prompting major chocolate brands in the U.S. to announce price increases [1][3] - As of this week, cocoa futures prices are at $7,380 per ton, down from a peak of $11,984 in December last year, but still up 121% compared to two years ago [3] Group 2 - The average price of chocolate bars in the U.S. has risen from $2.43 in July 2021 to $3.45 recently, marking a 41% increase [3] - Major chocolate companies like Nestlé and Ferrero have announced price hikes, with Hershey indicating that its chocolate products' average prices may increase by double digits [3] - Concerns about tariff threats have emerged, particularly regarding a potential 21% tariff on cocoa and other products from Ivory Coast, although the implementation of this tariff was later suspended [5] Group 3 - The U.S. imports nearly $4.4 billion worth of chocolate, cocoa, and candy annually, while the members of the National Confectioners Association export about $2 billion worth of U.S.-made chocolate and candy each year [5]

Here’s Why Hershey Is Raising Prices https://t.co/7rCe378UOv ...

Hershey will soon raise its candy prices, according to multiple outlets, citing a jump in cocoa costs that have led the chocolate company to rethink its list prices and the weight of candy sold in each container. (Photo: Justin Sullivan via Getty Images)https://t.co/ywto3sgmkh https://t.co/XlfUjgxgiB ...