Financial Data and Key Metrics Changes - Total Hershey net sales increased by 7% in Q4 2025, with full-year growth of 4.4% [4][13] - Consolidated net sales for 2025 reached approximately $11.7 billion, reflecting a 4.4% increase year-over-year [13] - Adjusted gross margin for Q4 was 38.3%, a decrease of 650 basis points compared to the previous year due to commodity inflation and tariff expenses [16] Business Line Data and Key Metrics Changes - North America Confectionery net sales increased by 5.3% in Q4, with net price realization contributing approximately 10 points to growth [14] - North America Salty Snacks segment net sales surged by 28% in Q4, with organic constant currency growth of 18.2% [14] - The international segment saw a slight increase in net sales by 0.4% to $256 million, but organic constant currency net sales declined by 1.9% [15] Market Data and Key Metrics Changes - U.S. confection retail sales growth was in line with the category in Q4, driven by strong innovation and holiday programming [4] - The U.S. salty snacking business experienced a retail sales growth of 15.6% in Q4, leading to an 11.3% increase for the full year [5] - Hershey's international segment achieved full-year organic constant currency net sales growth of 2.2%, with market share gains in Mexico, Brazil, and the U.K. [6] Company Strategy and Development Direction - The company aims to accelerate sustainable sales growth, restore margins, and position Hershey for long-term success [3] - Strategic priorities for 2026 include delivering top-line growth, driving sustainable margin improvement, and evolving the strategy for future competitiveness [8][12] - The company plans to introduce innovative products and increase media investments to support brand growth [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a challenging environment marked by cocoa inflation and macroeconomic volatility [3] - The outlook for 2026 includes expected net sales growth of 4% to 5%, with a focus on innovation and brand investment [19] - Management is cautious about potential demand headwinds, including health trends and consumer financial pressures [20] Other Important Information - The AAA Program has generated over $300 million in net savings over the past two years, with an additional $100 million projected for 2026 [7] - The acquisition of LesserEvil is expected to contribute approximately 150 basis points to growth in 2026 [19] - Capital expenditures for 2026 are projected to be between $425 million and $475 million, focusing on technology investments [23] Q&A Session Summary Question: What are the expectations for 2026 sales growth? - The company expects full-year 2026 total net sales growth of between 4% and 5%, driven by pricing, innovation, and brand investment [19] Question: How will the company address margin recovery? - The company anticipates a gross margin recovery of around 400 basis points in 2026, supported by pricing and productivity initiatives [20] Question: What are the plans for capital allocation in 2026? - The company will prioritize reinvestment in the business, including M&A, and plans to raise dividends by 6% [23]

Financial Data and Key Metrics Changes - Total Hershey net sales increased by 7% in Q4 2025, with full-year growth of 4.4% [4][15] - Consolidated net sales for 2025 reached approximately $11.7 billion, reflecting a 4.4% increase year-over-year [15] - Adjusted gross margin for Q4 was 38.3%, a decrease of 650 basis points compared to the previous year, primarily due to commodity inflation and tariff expenses [18] Business Line Data and Key Metrics Changes - North America Confectionery net sales increased by 5.3% in Q4, with net price realization contributing approximately 10 points to growth [16] - North America Salty Snacks segment net sales surged by 28% in Q4, with organic constant currency growth of 18.2% [16] - The international segment saw a slight increase in net sales by 0.4% to $256 million, but organic constant currency net sales declined by 1.9% [17] Market Data and Key Metrics Changes - Retail sales growth in the U.S. salty snacking business accelerated to 15.6% in Q4, resulting in an 11.3% increase for the full year [5] - Hershey's U.S. confection retail sales growth was in line with the category, reflecting strong performance in innovation and holiday programming [4] - The international segment achieved full-year organic constant currency net sales growth of 2.2%, with market share gains in Mexico, Brazil, and the U.K. [6][7] Company Strategy and Development Direction - The company aims to deliver top-line growth at or above market categories, restore margins, and increase investments for sustainable growth in 2027 and 2028 [9] - Strategic priorities for 2026 include driving sustainable top-line growth, restoring margins, and evolving the strategy for future competitiveness [9][12] - The company plans to introduce innovative products and activate major cultural moments to enhance brand presence [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026, highlighting the momentum from 2025 and the ability to navigate macroeconomic challenges [3] - The company is monitoring factors such as consumer financial pressure and health trends, which could impact future performance [8] - For 2026, the company expects net sales growth of 4% to 5%, with a focus on innovation and brand investment [20] Other Important Information - The AAA Program has generated over $300 million in net savings over the past two years, with an additional $100 million projected for 2026 [8] - The company completed the acquisition of LesserEvil, enhancing its position in the salty snacks market [19] - Capital expenditures for 2026 are projected to be between $425 million and $475 million, with a focus on technology investments [24] Q&A Session Summary Question: What are the expectations for 2026 net sales growth? - The company expects total net sales growth of 4% to 5% for 2026, with contributions from the acquisition of LesserEvil [20] Question: How is the company addressing commodity inflation? - The company is utilizing agile hedging and sourcing strategies to mitigate the impact of cocoa inflation [8] Question: What are the plans for advertising and brand investment in 2026? - Advertising and related consumer spending are expected to increase by double digits, supporting momentum across the business [22]

Financial Data and Key Metrics Changes - Net sales for the first quarter were $617 million, reflecting a 6% year-over-year decline primarily due to the timing of retailer spring inventory shipments and portfolio optimization efforts [11][12] - Non-GAAP gross profit was $190 million, down from $196 million, while non-GAAP gross margin expanded by 100 basis points to 30.8% [12][13] - Non-GAAP diluted earnings per share were $0.21, consistent with the prior year and above expectations for the quarter [13][17] Business Line Data and Key Metrics Changes - Pet segment net sales were $416 million, a 3% year-over-year decline, impacted by portfolio optimization and shipment timing [14] - Garden segment net sales were $202 million, a 12% decline, primarily due to shipment timing and rationalization of live plants categories [15] - Non-GAAP operating income for the pet segment was $50 million, while the garden segment reported a non-GAAP operating loss of $2 million [14][15] Market Data and Key Metrics Changes - The company gained market share in several key categories within the pet segment, including dog treats and animal health [14] - In the garden segment, market share gains were noted in wild bird, fertilizer, and packet seeds [15] - The overall consumer focus remains on value and product performance, particularly in a promotionally active retail environment [9] Company Strategy and Development Direction - The company is focused on sustainable long-term growth, emphasizing innovation and operational efficiency [4][8] - A multi-year supply chain network design program has been implemented to improve customer alignment and cost efficiency [6] - M&A remains a key component of the growth strategy, with a focus on margin-accretive consumable businesses [9][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming garden season despite current weather challenges, citing strong retailer support and distribution gains [21][22] - The company reaffirmed its expectation for Fiscal 2026 non-GAAP diluted EPS of $2.70 or better, indicating confidence in future performance [9][17] - Management noted that the consumer landscape is stabilizing, particularly in the pet segment, with expectations for modest growth in the back half of the fiscal year [33][57] Other Important Information - Cash used by operations was $70 million for the quarter, with a strong liquidity position reflected in cash and cash equivalents totaling $721 million [16][17] - The company repurchased approximately 660,000 shares for $18.5 million during the quarter, with $28 million remaining under the share repurchase authorization [16][17] Q&A Session Summary Question: Insights on the garden season and growth opportunities - Management indicated that the garden season's performance is not dictated by Q1 results and expressed optimism about distribution points and retailer support for the upcoming year [21][22] Question: Balancing profitability improvements with growth investments - Management acknowledged the need to pivot towards a growth mindset, focusing on innovation, private label, and M&A to drive market share [24][27] Question: Quantifying sales headwinds - The timing of garden shipments and portfolio optimization efforts accounted for more than half of the overall net sales decline [32] Question: Update on pet adoption trends - Management noted stabilization in the pet category, with positive growth in the live animal business and expectations for modest growth in the back half of the year [33][57] Question: Thoughts on the M&A environment - Management expressed optimism about increased M&A activity, particularly in the pet segment, and indicated ongoing discussions for potential acquisitions [46][47] Question: Inventory readiness for potential demand surges - Management confirmed reasonable in-store inventories and readiness to fulfill increased demand, supported by a diverse product portfolio [50][51]

Core Insights - The company reported a solid performance for the full year 2025, with adjusted EPS of $9.53 and $700 million in adjusted free cash flow, demonstrating resilience despite macroeconomic challenges [3][25] - The adjusted EBITDA margin was maintained at 16.4%, reflecting effective productivity measures to offset higher employee-related costs and trade policy impacts [3][15] - The company is focused on driving growth in high-value categories, which now represent a significant portion of its portfolio, and aims to return to stronger organic revenue growth [7][12] Financial Performance - Adjusted EPS for Q4 was $2.45, up 3% year-over-year, driven by higher volume and productivity, despite challenges from trade policy changes [14][25] - Full-year 2025 free cash flow reached $700 million, with a conversion rate exceeding 100%, and a net debt to adjusted EBITDA ratio of 2.4 [15][25] - The company returned approximately $860 million to shareholders in 2025, including $572 million in buybacks and $288 million in dividends [15][25] Segment Performance - In the Solutions Group, sales increased by approximately 1.5%, with high-value categories now making up 60% of the portfolio, which helped offset declines in base solutions due to tariff-related uncertainties [1][19] - The Materials Group reported a 5% increase in sales, although organic sales were slightly down, with high-value categories contributing to low single-digit growth [2][16] - Intelligent Labels and other high-value categories showed strong growth, with Intelligent Labels growing mid-single digits, driven by food and logistics segments [20][21] Strategic Focus - The company is committed to expanding its high-value categories, which have shown a mid-single-digit CAGR over the past six years, and aims to increase their share of total sales to approximately 45% by 2025 [7][12] - Innovation and digital capabilities are key areas of focus, with efforts to enhance operational productivity and shorten innovation cycles through AI and automation [10][11][76] - The company plans to continue its disciplined capital allocation strategy while investing in productivity and innovation to drive long-term value [11][12] Outlook - For 2026, the company anticipates adjusted EPS growth of approximately 6% and reported sales growth of 5% to 7%, with organic sales growth expected to be between 0% and 2% [12][23] - The company expects to see stronger growth in the second half of 2026, driven by new program rollouts and a recovery in apparel and general retail [6][12] - Continued focus on productivity and effective capital deployment will be essential to navigate the current economic environment and achieve growth targets [12][26]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $9.53 and $707 million of adjusted free cash flow for the full year 2025, demonstrating the durability of its franchise [3][15] - Adjusted EBITDA margin was 16.4% for the full year, reflecting resilience despite headwinds from trade policy changes and softer consumer sentiment [3][15] - Fourth quarter adjusted EPS was $2.45, up 3% compared to the prior year, driven by higher volume and productivity [15][25] Business Line Data and Key Metrics Changes - In the Materials Group, reported sales increased by 5%, although organic sales were slightly down due to deflation-related price reductions [4][17] - The Solutions Group saw sales increase by approximately 1.5%, with high-value categories now representing 60% of the portfolio, which helped offset declines in base solutions [6][19] - Intelligent Labels within the enterprise-wide platform grew mid-single digits, driven by strong performance in food, logistics, and other categories [7][20] Market Data and Key Metrics Changes - In developed markets, North America experienced low single-digit volume mix declines, while Europe delivered mid-single-digit growth [17] - Emerging markets in Asia Pacific and Latin America were up low single digits, indicating some resilience in these regions [17] - The apparel business was down roughly 7%, impacted by tariff-related uncertainties, while other categories like food and logistics showed high teens growth in Q4 [6][8] Company Strategy and Development Direction - The company is focused on driving growth in high-value categories, which now represent approximately 45% of total sales, and aims to expand this further [9][10] - There is a strong emphasis on innovation and digital capabilities to enhance operational productivity and customer solutions [10][11] - The company plans to maintain a disciplined capital allocation strategy while continuing to invest in productivity and innovation to strengthen market positions [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to stronger growth despite ongoing macroeconomic challenges, with expectations for adjusted EPS growth of approximately 6% in Q1 2026 [13][25] - The company anticipates that growth in high-value categories will continue to be a key driver, with a focus on expanding customer adoption and market penetration [9][39] - Management acknowledged the need to improve organic revenue growth and is taking decisive actions to address this trajectory [9][13] Other Important Information - The company achieved its 2025 sustainability objectives, including reducing energy intensity and enabling more sustainable products [11][12] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 2.4, and the company returned approximately $860 million to shareholders in 2025 [16][25] Q&A Session Questions and Answers Question: Can you provide more detail on the 40 basis point drop in margin? - The drop was attributed to soft base volumes, wage inflation, and some one-time benefits in the prior year, along with the impact of extra calendar days in Q4 [28][30] Question: What are the growth expectations for Intelligent Labels in 2026? - Growth is anticipated to be above the low single digits seen in 2025, driven by increased adoption in apparel and logistics sectors [37][39] Question: How do high-value categories compare in margin to core categories? - High-value categories typically have higher variable margins than the rest of the portfolio, contributing to overall margin expansion [44][46] Question: Has the Walmart partnership increased inquiries from other grocery sellers? - Yes, the partnership has catalyzed interest from other grocery sellers, leading to a growing pipeline of inquiries [52][53] Question: What is the expected impact of temporary savings on 2026? - Temporary savings from incentive compensation in 2025 will be a headwind in 2026, similar in magnitude to the $50 million restructuring actions [55][56] Question: What is the outlook for the apparel market in 2026? - There is uncertainty due to tariff policies, but growth is expected as retailers adjust their supply chain strategies [61][63]

Core Insights - Procter & Gamble (PG) is focusing on innovation in Beauty and Personal Care as a key growth strategy, emphasizing faster innovation cycles and premiumization across brands like Olay, SK-II, Pantene, and Head & Shoulders [1][10] - The company is experiencing stronger organic sales growth in premium skin care lines compared to mass alternatives, driven by sustained demand in international markets, particularly Greater China [2] - The Personal Care segment is benefiting from productivity-driven innovation, with improvements in performance and convenience supporting pricing and mix, despite uneven volume growth in a value-conscious consumer environment [3] Innovation and Market Position - Innovation is helping PG offset macro pressures such as input cost inflation and private-label competition, positioning the company for sustainable, margin-accretive growth [4] - Continued innovation in Beauty and Personal Care is central to PG's strategy, reinforcing brand equity and supporting long-term growth despite a challenging global consumer backdrop [5] Financial Performance - PG's shares have gained 3.2% in the past six months, contrasting with a 2.2% drop in the industry [9] - The company trades at a forward price-to-earnings ratio of 21.68X, higher than the industry average of 19.04X [11] - The Zacks Consensus Estimate for PG's fiscal 2026 and fiscal 2027 EPS reflects year-over-year growth of 2.2% and 4.5%, respectively, although estimates have been revised downward in the past 30 days [13]

Core Insights - Reynolds Consumer Products reported fourth-quarter net revenues of $1.03 billion, a 1% increase from $1.02 billion year-over-year, with adjusted EBITDA of $220 million, marking a 3% year-over-year growth, and adjusted EPS of $0.59 compared to $0.58 in the prior-year quarter, exceeding all guided metrics [1][6]. Financial Performance - For the full year 2025, net revenues reached $3.7 billion, up 1% year-over-year, while adjusted EBITDA was $667 million, slightly down from $678 million in 2024, and adjusted EPS was $1.64 compared to $1.67, noting a prior year tax benefit [12]. - Free cash flow for 2025 was $316 million, supported by effective working capital management, with a net leverage ratio of 2.1x at year-end [5][14]. Market Dynamics - The company experienced broad market share gains and improved profitability despite challenges such as commodity inflation and tariff pressures, with significant performance in Hefty Waste Bags, Hefty Food Bags, and Reynolds Wrap [2][3]. - Competitive conditions intensified in the fourth quarter, particularly in waste and food bags, prompting the company to maintain its pricing strategy to protect brand equity [10]. Strategic Initiatives - Innovation and revenue growth management were highlighted as key themes for 2025, with new product launches including Hefty Waste Bags with new scents and Reynolds Kitchens Parchment Cooking Bags [7][8]. - The company plans to realign its category organization in 2026 to enhance clarity and focus, consolidating waste bags and food bags into distinct business units [19]. 2026 Outlook - Management anticipates flat adjusted EBITDA for 2026 amid ongoing headwinds, with net revenues expected to decline by 3% to increase by 1% compared to 2025 [4][16]. - Capital expenditures are projected to remain elevated in the low $200 million range to support automation and strategic initiatives [20].

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