Seasoned HR Executive Brings 25+ Years of Leadership Experience in Building High-Performing Teams and Modernizing HR OperationsHERSHEY, Pa., Aug. 18, 2025 /PRNewswire/ -- The Hershey Company (NYSE: HSY) today announced the appointment of Natalie Rothman as Chief Human Resources Officer, effective August 18, 2025. Rothman will lead Hershey's global human resources function and report to President and Chief Executive Officer Kirk Tanner. Natalie Rothman, Chief Human Resources Officer, The Hershey Company ...

Core Insights - The Hershey Company is experiencing increased investor interest ahead of its Q1 2025 earnings release, despite a 14% decline in stock price over the past year [1][2][3] - Investors are potentially shifting focus from cost pressures to Hershey's strong brand portfolio and strategic evolution, which may provide defensive positioning and growth potential [2][3] Financial Performance - Hershey's management has guided for a significant drop in Adjusted EPS for fiscal year 2025, projected to decline in the mid-30% range due to rising cocoa prices [5] - Cocoa futures have recently retreated by as much as 30% from record highs, indicating a potential easing of cost pressures [6][7] Business Strategy - Hershey is diversifying its product offerings beyond confectionery, with successful salty snack brands and a pending acquisition of LesserEvil, which aligns with consumer trends towards healthier snacks [9][10] - The company is expected to achieve at least 2% net sales growth in fiscal 2025, reflecting strong brand loyalty and effective pricing strategies [8] Operational Efficiency - Hershey's "Advancing Agility & Automation Initiative" is projected to deliver approximately $125 million in savings during 2025, aiding in cost management and funding for innovation [12] - The company maintains a strong dividend yield of 3.28%, supported by a 15-year track record of annual dividend increases [11][13] Market Positioning - The stock price decline from its 2023 peak may present an entry point for investors seeking quality in a defensive sector [16] - The upcoming Q1 2025 earnings report is crucial, with investors looking for updates on volume performance, margin management, and cocoa cost outlook [15][16] Investment Consideration - Hershey offers a combination of defensive stability and growth potential, making it a compelling option for investors amid easing cost pressures and ongoing strategic initiatives [17][18]

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]

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]