Hershey Reports Third-Quarter 2025 Financial Results

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].