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Treat Your Portfolio With These 3 Spooky Season Stocks
MarketBeat· 2025-10-08 17:26
Spooky season is big business in the retail world, even as consumers trim their spending overall amid persistent inflation and other concerns. The National Retail Federation estimates Halloween spending will increase by 13% year-over-year (YOY) to more than $13 billion this year, with customers adding costumes, decorations, candy, and more to their carts in anticipation. Investors might see this as an opportunity to focus on some retailers specializing in holiday goods, all of whom could get a boost thanks ...
Hershey(HSY) - 2025 Q2 - Earnings Call Transcript
2025-07-30 12:00
Financial Data and Key Metrics Changes - The company reported a 26% increase in net sales compared to the same period last year, with organic constant currency net sales growth of 26.3% driven by net price realization of approximately five points and volume growth of approximately 21 points [29] - Adjusted gross margin decreased by five to ten basis points to 38.1% due to commodity inflation and incremental tariff expenses, although gross margin was higher than expected due to timing of cocoa hedges and lower tariff expenses [33][40] - Adjusted earnings per share declined by 4.7% year over year, impacted by incremental commodity costs and a higher tax rate [37] Business Line Data and Key Metrics Changes - North America Confectionery segment net sales grew by 32%, with volume increasing by 25%, benefiting from Easter timing and inventory changes related to ERP system implementation [30] - North America Salty Snacks segment net sales increased by 8.8%, with volume growth of over 4% driven by Dots and Skinny Pop [31] - International segment net sales increased by 4.4%, but volume growth was below expectations primarily due to category softness in Mexico and lower export market demand [32] Market Data and Key Metrics Changes - Hershey's U.S. retail sales for candy, mint, and gum increased by 21.8%, outpacing the category increase of 17.9% [8] - The company gained approximately 90 basis points of market share in the non-seasonal candy, mint, and gum category [9] - Constant currency net sales in Brazil increased by double digits, while growth in Europe was mid-single digits led by the U.K. [20] Company Strategy and Development Direction - The company aims to be a leading snacking powerhouse, with a focus on balanced growth and mitigating cocoa inflation through enhanced productivity and strategic pricing [7][21] - A new pricing action on the entirety of the U.S. Confection portfolio is expected to deliver an estimated 16 points of pricing contribution to overall company sales [25] - The company is implementing a Smart Complexity initiative to simplify packaging and optimize manufacturing efficiency, raising its savings target to $400 million [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying trajectory of the business, expecting robust results to continue in the second half of the year [21] - The company anticipates adjusted earnings per share to decline between 36% to 38% for the year due to higher cocoa costs and tariffs [40] - Management remains hopeful for improvements in tariff conditions but does not plan for relief in 2025 [39] Other Important Information - The company announced the appointment of Kirk Tanner as the new President and CEO, effective August 18 [5] - The Pokémon program has shown strong initial velocities, significantly outperforming other limited-time offers [14] - Capital expenditures in Q2 totaled $231 million, with full-year expectations between $425 million and $450 million [37] Q&A Session Summary Question: What are the expectations for the second half of the year? - Management expects an acceleration in performance to 2% to 4% growth, supported by strong innovation and merchandising plans [38] Question: How is the company addressing cocoa inflation? - The company is implementing pricing actions and hedging strategies to manage cocoa costs and restore margins over time [22][28] Question: What is the outlook for international markets? - The full-year constant currency segment net sales growth outlook for international markets remains low single digits, with expectations for reacceleration in the second half [20]
Hershey(HSY) - 2025 Q1 - Earnings Call Transcript
2025-05-01 00:00
Financial Data and Key Metrics Changes - First quarter net sales reported a decline of 13.8% year-over-year, impacted by a 90 basis point headwind from foreign currency translation and a 15-point volume decline due to inventory lapses and fewer shipping days [23][24][29] - Adjusted earnings per share decreased by 32% in the quarter, with expectations for a less severe decline in the second quarter as seasonal impacts reverse [29] - Adjusted gross margin decreased by 370 basis points, with expectations for further compression in the second quarter due to ongoing commodity inflation [26][27] Business Line Data and Key Metrics Changes - North America Confectionery segment net sales declined by 15%, with volume down nearly 18%, partially offset by net price realization of around 3% [24][25] - The North America salty snacks segment saw a 1% increase in net sales, with volume growth of nearly 4% driven by brands like Dots and Skinny Pop [25][26] - The salty snacks portfolio is positioned for growth, with Skinnypop consumption increasing by 5.4% and Dots retail takeaway growing by 20.6% [14][15] Market Data and Key Metrics Changes - International segment organic constant currency net sales declined by 7.9%, with performance ahead of expectations in key markets like Brazil and Mexico [25][15] - The global cocoa grind declined by 3.4% in Q1, marking the eighth consecutive quarter of declines, indicating ongoing demand challenges [20] Company Strategy and Development Direction - The company is focused on becoming a leading snacking powerhouse, with strategic acquisitions like Lesser Evil and Fulfill to enhance its portfolio [6][7] - Investment in technology and automation is expected to deliver $125 million in cost savings this year, supporting long-term growth [17][28] - The company plans to launch several new products and partnerships, including a collaboration with Pokémon, to drive consumer engagement [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted heightened cost pressures but emphasized a strong balance sheet that allows for continued investment in the business [6] - The company anticipates a strong second quarter with net sales expected to increase by more than 20% as seasonal impacts reverse [24] - Management remains committed to its financial outlook, despite uncertainties related to tariffs and commodity costs [32] Other Important Information - The company did not repurchase any shares in the first quarter, prioritizing capital for acquisitions instead [30][31] - The adjusted tax rate for the quarter was 24.4%, reflecting challenges in executing tax strategies in a changing global landscape [28] Q&A Session Summary Question: What are the expectations for the second quarter? - The company expects total net sales to increase by more than 20% in Q2, reversing the impacts seen in Q1 due to Easter and inventory lapses [24] Question: How is the company addressing cocoa price pressures? - The company is engaging with the US government for tariff exemptions and is preparing strategies to mitigate inflation and protect margins [20][21][32]
Hershey(HSY) - 2025 Q1 - Earnings Call Transcript
2025-05-01 00:00
Financial Data and Key Metrics Changes - First quarter net sales reported a decline of 13.8% year-over-year, impacted by a 90 basis point headwind from foreign currency translation and a 30 basis point benefit from the Sour Strips acquisition [22][23] - Adjusted earnings per share decreased by 32% in the quarter, with expectations for a less severe decline in the second quarter as seasonal impacts reverse [29] - Adjusted gross margin decreased by 370 basis points, primarily due to commodity inflation and negative sales mix, with expectations for further compression in the second quarter [26][27] Business Line Data and Key Metrics Changes - North America Confectionery segment net sales declined by 15%, in line with expectations, with volume down nearly 18% [23][24] - North America salty snacks segment net sales increased by 1%, with volume growth of nearly 4% driven by brands like Dots and Skinny Pop [24][25] - The salty snacks portfolio showed strong performance, with Skinnypop consumption increasing by 5.4% and Dots retail takeaway growing by 20.6% [14][22] Market Data and Key Metrics Changes - International segment organic constant currency net sales declined by 7.9%, with performance ahead of expectations in key markets [24][15] - Constant currency net sales increased mid-teens in Brazil and mid-single digits in Mexico, driven by improved category dynamics [15] - The global cocoa grind declined by 3.4% in Q1, marking the eighth consecutive quarter of declines [19] Company Strategy and Development Direction - The company is focused on becoming a leading snacking powerhouse, with strategic acquisitions like Lesser Evil and Fulfill to enhance its portfolio [6][7] - Plans to build momentum in everyday business through innovation and programming, including new product launches and partnerships [12][13] - Continued investment in brands is expected to drive long-term growth, with a full-year advertising spend increase projected in the mid-single digits [16] Management Comments on Operating Environment and Future Outlook - Management noted heightened cost pressures but emphasized a strong balance sheet that allows for continued investment [6] - The company anticipates total net sales to increase by more than 20% in Q2, reversing the impacts seen in Q1 [22] - Cocoa prices are expected to build cost pressure each quarter, with robust planning underway to mitigate inflation and protect margins [19][20] Other Important Information - The company is pursuing an exemption request for cocoa tariffs, which cannot be mitigated through sourcing strategies [20][31] - Capital expenditures in Q1 were $146 million, lower than the prior year, with full-year expectations of $425 million to $450 million [30] - The company did not repurchase any shares in Q1, prioritizing capital for announced acquisitions [31] Q&A Session Summary Question: What are the expectations for net sales growth in the upcoming quarters? - The company expects total net sales to increase by more than 20% in Q2, reversing the impacts from Q1 [22] Question: How is the company addressing cocoa price pressures? - The company is implementing robust planning to mitigate inflation and protect margins, with a focus on pricing and sourcing strategies [19][20] Question: What is the outlook for advertising spend this year? - The company anticipates a mid-single digit increase in full-year advertising spend, reflecting a commitment to brand investment [16]