The Hershey Company (HSY), headquartered in Hershey, Pennsylvania, is a leading U.S. confectionery and snacks manufacturer known for iconic brands such as Hershey’s Milk Chocolate, Reese’s Peanut Butter Cups and Kit Kat. The company has expanded globally and now sells its products in around 85 countries. Its market capitalization is around $37.3 billion. The company is expected to announce its fiscal Q3 2025 earnings results before the market opens on Thursday, Oct. 30. Ahead of this event, analysts expec ...

Kit Kat's parent company is getting leaner and more automated. Nestle, the world's largest food company, plans to cut around 16,000 jobs worldwide over the next two years as it leans into AI and automation to speed growth and slash costs. That includes roughly 12,000 office roles and another 4,000 factory and supply chain jobs.Nestle calls it a hard but necessary step towards saving $3.3% billion by 2027. CEO Philip Navertil says the world is changing and Nestle needs to change faster. Now, the shakeup come ...

Group 1: AI and Semiconductor Industry - Taiwan Semiconductor reported record profits and raised its 2025 revenue outlook for the second time this year, citing stronger-than-expected AI demand [1][14] - The company expects 2025 revenue to grow in the mid-30% range, up from prior guidance, following a 39% jump in net income last quarter [1][14] - The AI investment cycle is described as self-funding, with significant investments from major players like Google and OpenAI, raising concerns about a potential AI bubble [1][14] Group 2: Airline Industry - United Airlines reported mixed third-quarter results, with a slight revenue miss but a strong fourth-quarter profit outlook, exceeding analyst expectations [1][2] - The company noted a 3% year-over-year increase in revenue, with premium segment revenue rising 6% and loyalty revenue up 9% [2] - United Airlines is addressing operational challenges at Newark airport, one of its major hubs, amid ongoing staffing shortages and air traffic control issues [2] Group 3: Federal Reserve Commentary - Fed Governor Christopher Waller supports a 25 basis point rate cut at the end of the month but suggests a cautious approach thereafter, indicating a need for clarity on the job market and economy [3][5] - Waller highlighted a conflict in data showing a weaker job market alongside a strong economy, emphasizing the need for careful policy adjustments [3][5] - The government shutdown is complicating economic data reporting, affecting the availability of key reports like the September jobs report [3][4] Group 4: Other Notable Companies - Nestle shares rose approximately 8% after reporting a rebound in sales and announcing plans to cut 16,000 jobs, driven by price hikes in coffee and candy [10][11] - Salesforce raised its revenue outlook for the next few years, expecting over $60 billion in revenue by 2030, excluding the impact of a pending acquisition [12] - Charles Schwab's stock jumped after beating earnings and revenue expectations, with total client assets increasing 17% year-over-year to a record $11.6 trillion [13]

Company Overview - The Hershey Company (NYSE:HSY) produces and sells a variety of confectionery and snack products under well-known brands such as Hershey's, Reese's, Kit Kat, and Jolly Rancher [2] Market Position - Hershey is considered to be in an "unassailable position" with commodity prices, particularly cocoa, having peaked, and there is no significant competition threatening its market dominance [1] - The company is viewed as a strong earnings play, especially among food stocks, which are performing well [1] Leadership Changes - The recent transition from CEO Michele Buck to Tanner, who has a brief tenure at Wendy's, raises concerns about leadership stability, despite Tanner's extensive background at PepsiCo [2] Investment Perspective - While Hershey is acknowledged as a potential investment, there are suggestions that certain AI stocks may offer greater upside potential and less downside risk [3]

Group 1 - Nestlé chairman Paul Bulcke is stepping down earlier than planned following the unexpected departure of CEO Laurent Freixe due to an undisclosed relationship with an employee [1][2] - Philipp Navratil, CEO of Nespresso, has been appointed as Freixe's immediate successor, while Pablo Isla will take over as chairman from 1 October [2][6] - Bulcke expressed confidence in the new leadership and emphasized the importance of a timely transition to advance Nestlé's strategy [3] Group 2 - Shareholders criticized Bulcke's leadership, citing instability and underperformance, particularly regarding the handling of the investigation into Freixe's conduct [4] - A top shareholder indicated that Bulcke's resignation was a matter of decency and respect, reflecting a loss of trust in his leadership [4] - In recognition of Bulcke's long service, he has been named honorary chairman following his resignation [5]

Core Insights - The Hershey Company has appointed Natalie Rothman as Chief Human Resources Officer, effective August 18, 2025, to lead its global HR function [1][3] - Rothman has over 25 years of HR experience and is recognized for her ability to build high-performing teams and modernize HR operations across various industries [2][3] Company Overview - The Hershey Company is a leading snacks company with over 20,000 employees globally, generating more than $11.2 billion in annual revenues from over 90 brand names in approximately 80 countries [5] - The company is committed to ethical and sustainable operations, with a long history of supporting education through initiatives like the Milton Hershey School [6] Leadership Experience - Rothman previously served as CHRO at Inspire Brands, where she implemented business process automation and AI tools to modernize HR operations [3] - At Advance Auto Parts, she led efforts to drive cultural change and enhance organizational capabilities through technology [3][4] Professional Affiliations - Rothman is a member of the New York and New Jersey Bar and the Human Resources Policy Association, and serves on the boards of Udemy and Pearce Services [4]

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 [26] - 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 [30][37] - Adjusted earnings per share declined by 4.7% year over year, impacted by incremental commodity costs and a higher tax rate [34] 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 [27] - North America Salty Snacks segment net sales increased by 8.8%, with volume growth of over 4% driven by brands like Dots and Skinny Pop [28] - The International segment saw a 4.4% increase in net sales, but volume growth was below expectations due to category softness in Mexico and lower export demand [29] Market Data and Key Metrics Changes - Hershey's U.S. retail sales for candy, mint, and gum increased by 21.8%, outpacing the category growth of 17.9% [8] - The company gained approximately 90 basis points in market share, with everyday chocolate retail takeaway accelerating to 6.7% [9] - In the International segment, constant currency net sales increased double digits in Brazil, while growth in Europe was mid-single digits, led by the U.K. [18] 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 productivity and strategic pricing [7][19] - Hershey announced a new price action on its U.S. Confection portfolio, which represents roughly 80% of total net sales, expected to deliver an estimated 16 points of pricing contribution [23] - The company is implementing a Smart Complexity initiative to simplify packaging and optimize manufacturing efficiency, raising its savings target to $400 million [25] 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 [19] - The company anticipates adjusted earnings per share to decline between 36% and 38% for the year, reflecting higher cocoa costs and tariff expenses [37] - Management remains hopeful for improvements in tariff conditions over time, although no relief is planned for 2025 [36] Other Important Information - The company announced the appointment of Kirk Tanner as the new President and CEO, effective August 18, following Michele Buck's retirement [5][6] - Hershey's advertising and related consumer marketing expenses increased by 35.5% in the second quarter, reflecting the timing of expenses in prior years [30] - Capital expenditures for the second quarter were $231 million, with full-year expectations between $425 million and $450 million [34] Q&A Session Summary Question: What are the expectations for cocoa prices and inflation? - Management indicated that cocoa prices remain volatile and elevated, with expectations of inflation in cocoa input costs year over year in 2026 [20][21] Question: How is the company addressing tariff impacts? - The company has embedded incremental tariff costs in its full-year outlook and is taking steps to mitigate tariff exposures over time [36] Question: What is the outlook for the International segment? - The full-year constant currency segment net sales growth outlook for the International segment remains low single digits, with expectations for reacceleration in the second half [18]

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]

Group 1 - The Hershey Company is raising prices across its candy portfolio due to an unprecedented increase in cocoa costs, with price increases expected to be in the double digits [1][4] - The price increase will involve adjustments to both the list price and the weight and amount of candy in product packaging [1][4] - The rise in cocoa costs is attributed to supply shortages in the Ivory Coast and Ghana, which have significantly impacted prices over the last two years [4] Group 2 - The Hershey Company is currently in discussions with its retail partners regarding the new pricing but has not disclosed specific details [6] - The announcement of the price increase follows the news that Wendy's CEO, Kirk Tanner, will be stepping down to take the CEO position at Hershey, effective August 18 [7] - Hershey owns over 90 brands, including popular products like Reese's Peanut Butter Cups and Kit Kat [9]

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]