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 ...

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]

Company Overview - The Hershey Company is an industry-leading snacks company generating over $11.2 billion in annual revenues and operating in approximately 70 countries with a workforce of more than 20,000 employees [4]. - The company's portfolio includes well-known chocolate and confectionery brands such as Hershey's, Reese's, Kisses, Kit Kat®, Jolly Rancher, Ice Breakers, and popular salty snacks like SkinnyPop and Dot's Homestyle Pretzels [4]. Leadership Transition - Kirk Tanner has been appointed as the new President and Chief Executive Officer of The Hershey Company, bringing extensive experience from his previous role as CEO of PepsiCo Beverages North America, where he oversaw a $28 billion business [1][2]. - Tanner's leadership is expected to focus on core brand growth, innovation, operational excellence, and accelerating new unit growth globally [2]. - Mary Kay Haben, Lead Independent Director, praised Tanner's proven leadership in driving growth in complex global businesses and his commitment to engaging with employees, the community, and stockholders [3]. Strategic Vision - Tanner emphasized the importance of understanding and delighting consumers, building strong partnerships with customers, and investing in colleagues as the three pillars that will guide Hershey's strategic decisions [3]. - The company aims to advance its ambition of becoming a Leading Snacking Powerhouse, leveraging Tanner's experience in snacks, beverages, M&A, and innovation [3]. Legacy and Future Direction - The previous CEO, Michele Buck, was recognized for her exceptional leadership and for guiding Hershey through multiple phases of transformational growth, leaving a legacy that positions the company well for the future [3]. - Tanner expressed his honor in leading a company he has long admired and his commitment to making a difference with beloved brands [3].

Core Insights - The Hershey Company is facing significant cost pressures due to rising cocoa prices and tariff impacts, potentially incurring up to $100 million in unmitigated costs per quarter in the latter half of 2025, with two-thirds of this risk linked to cocoa and Canadian tariffs [1][7] - Hershey is adopting a consumer-centric approach called demand shaping, focusing on lower-cocoa segments and utilizing pricing strategies to maintain consumer demand without overt price increases [2][4] - The company is also innovating to reduce reliance on cocoa-heavy inputs, with new product developments expected to support growth while managing cost pressures [3][4] Cost Management Strategies - Hershey is shifting its focus towards lower-cocoa products, such as sweets and salty snacks, which have shown strong growth [2] - The company is implementing price pack architecture to enhance value perception among consumers, particularly in value-sensitive retail channels [2][4] - Management is exploring sourcing strategies and tariff engagement as additional measures to mitigate costs [4] Financial Performance and Market Sentiment - Hershey's shares have increased by 12.2% over the past month, outperforming the industry growth of 9.7% and the broader Consumer Staples sector, which declined by 0.9% [5] - The stock is currently trading at a forward P/E ratio of 27.68, higher than the industry average of 22.55, indicating market expectations of stability and resilience in navigating cost challenges [12] - Recent downward revisions in EPS estimates reflect cautious sentiment, with the consensus estimates for the current and next fiscal year declining slightly [15]

Group 1: Company Overview - The Hershey Company is a consumer staples company primarily focused on food production, particularly in the snack sector, with a strong emphasis on chocolate products like Hershey and Reese's [2][5] - Despite economic fluctuations, consumer staples companies like Hershey tend to be resilient, as chocolate is viewed as an affordable indulgence [4] Group 2: Current Challenges - Hershey's share price has declined over 40% from its 2023 highs, indicating a significant downturn for the company [1] - The company is facing challenges due to soaring cocoa prices, which are impacting profit margins, leading to an expected adjusted earnings drop of around 35% [5] Group 3: Long-term Growth Potential - The Hershey Trust, which has voting control of the company, takes a long-term investment approach, allowing Hershey to focus on future growth despite short-term market pressures [6][9] - High commodity prices, such as cocoa, typically resolve over time, and Hershey is expected to manage costs and gradually increase prices to restore margins [7] - Hershey continues to diversify its business by acquiring new brands, such as Sour Strips and LesserEvil, to expand its market reach [8] Group 4: Investment Opportunity - The current downturn in share price presents a buying opportunity for growth investors, as demand for Hershey's core products remains solid [10] - The decline in share price has resulted in a historically high dividend yield of 3.5%, making it an attractive option for income investors as well [10]

Group 1: Industry Overview - Consumer staples companies are considered safe-haven investments due to their consistent demand regardless of economic conditions [1] - The average consumer staples stock yields around 2.5% today, with PepsiCo and Hershey offering higher yields [13] Group 2: PepsiCo Analysis - PepsiCo is the leading company in salty snacks with its Frito-Lay brand and has a significant presence in packaged foods through Quaker Oats [2] - Currently, PepsiCo is experiencing cooling top-line growth after inflation-driven growth post-pandemic, and is facing changing snacking trends [4] - The company has a strong history of increasing dividends for 53 years, demonstrating resilience through adversity [5] - PepsiCo is actively working on cost-cutting, improving efficiencies, and adjusting product offerings, including acquisitions of on-trend brands like Siete and Poppi [6] - The company offers a historically high dividend yield of 4.4%, providing investors with compensation while waiting for recovery [7] Group 3: Hershey Analysis - Hershey is the U.S. leader in the confections space, known for its iconic brand and the Reese's franchise, with a dividend yield of approximately 3.4% [8] - The company is currently facing significant challenges due to rising cocoa prices, which are expected to impact margins [9] - Despite the cocoa price challenges, Hershey maintains a dominant market position and plans to grow through acquisitions in non-chocolate confection and salty snack sectors [10] - The Hershey Trust's control allows the company to focus on long-term growth and reliable dividends, aligning with investor interests for sustainable income [11] - Investors may consider waiting for Hershey to navigate current cocoa market challenges while benefiting from its dividend yield [12]

Financial Data and Key Metrics Changes - The company expects EPS to decline about 30% for the first half of the year, with Q2 expected to be down less than Q1, which was down over 30% [12][13][14] - Gross margin for Q2 is expected to decrease by approximately 700 basis points, influenced by tariff components and increased SG&A expenses [14][13] Business Line Data and Key Metrics Changes - The company reported a 10% increase in its business, with a 100 basis point increase in market share, particularly in the sweets category [23] - The company anticipates low single-digit growth in everyday chocolate for the second half of the year, driven by strong innovation [35] Market Data and Key Metrics Changes - The company has seen strong growth in international markets, particularly in Brazil, where organic sales grew double digits [98] - The competitive environment in international markets has normalized, aiding the company's performance [98] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through various strategies, including lobbying and operational adjustments [10][9] - The company aims to continue growing its chocolate business while expanding into the salty snacks and sweets categories, targeting younger and more diverse demographics [79][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a path to earnings growth next year, despite current tariff challenges [20][21] - The company is actively monitoring consumer sentiment and adapting its strategies to maintain market share amid a weak consumer environment [31][30] Other Important Information - The company is not planning any buybacks for the year but remains open to capital allocation opportunities depending on how the year unfolds [99] - The company is investing in innovation and marketing to ensure long-term growth, particularly in the chocolate category [113][114] Q&A Session Summary Question: What is the risk of tariff expenses in Q3 and Q4? - Management indicated that unmitigated tariff impacts could reach up to $100 million per quarter, primarily from cocoa and Canadian retaliatory tariffs [8][9] Question: How should investors think about the magnitude of EPS decline in Q2? - Management expects EPS to be down about 30% for the first half, with Q2 showing a decline less than Q1 due to strong net sales [12][14] Question: What is the outlook for earnings growth next year? - Management maintains a positive outlook for earnings growth next year, despite the challenges posed by tariffs [20][21] Question: How is the company addressing consumer trends towards healthier eating? - Management noted that while consumer sentiment is weak, the chocolate category remains resilient, and they are focusing on premium and permissible products [31][30] Question: What is the competitive landscape in the U.S. chocolate market? - Management reported no significant changes in the competitive landscape, with smaller players softening and larger players increasing innovation [124] Question: How will the company approach pricing in light of cocoa prices? - Management confirmed that pricing will increase in Q2 and Q3 as part of their seasonal pricing strategy [128]

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]

Group 1 - The Hershey Company (HSY) is recognized for its strong brand portfolio, including Hershey, Reese's, and recent acquisitions like Dot's Pretzels, SkinnyPop, and LesserEvil [1] Group 2 - The company is positioned in the consumer goods sector, particularly in the confectionery market, which is characterized by strong brand loyalty and consistent demand [1]