Financial Data and Key Metrics Changes - The company is experiencing balanced growth across its portfolio, with a long-term revenue growth algorithm of 2% to 4% expected to be maintained [8][19] - Cocoa costs have moderated significantly, although the company still anticipates year-over-year inflation [7][41] - The company has slightly lowered its tariff estimate, contributing to a more favorable outlook for earnings recovery over time [7][41] Business Line Data and Key Metrics Changes - The everyday CMG business has shown double-digit growth in the last four weeks, indicating strong performance in this segment [15][16] - The core business achieved close to 5% growth in Q3, excluding the impact of new innovations like Reese's Oreo [32] Market Data and Key Metrics Changes - The company noted that Halloween sales have been disappointing, with a slow start attributed to warm weather and consumer behavior [23][24] - The convenience store channel is performing well, with CMG growth at over 6%, indicating a healthy market presence [76] Company Strategy and Development Direction - The company is focused on long-term growth while rebuilding margins, emphasizing the importance of investing in brands and innovation [8][41] - There is a robust pipeline of innovation planned for 2026 and 2027, with a balance between core business growth and new product introductions [32][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the consumer market is challenging but believes the category remains resilient [84][85] - The company is optimistic about cocoa costs moderating and potential tariff relief, although it remains cautious about the overall economic environment [41][42] Other Important Information - The company is actively analyzing consumer insights to improve product offerings and marketing strategies for future seasons [24][25] - The tax rate has been impacted by several factors, including adjustments in reserves and procurement strategies, with further guidance expected in future calls [105][106] Q&A Session Summary Question: Insights on 2026 expectations and EPS growth - Management discussed the balanced growth and the importance of defining success for 2026, focusing on category growth and margin recovery [8][19] Question: Elasticity and pricing expectations - Management indicated that elasticity is a significant factor in planning for next year, with current expectations being cautiously optimistic [10][11] Question: Halloween sales performance - Management acknowledged a slow start for Halloween but emphasized the importance of consumer insights for future improvements [23][24] Question: Cocoa costs and pricing strategy - Management noted that cocoa costs are still significantly higher than previous years, and pricing strategies will be carefully managed [27][51] Question: Innovation pipeline for 2026 - Management highlighted the importance of innovation, particularly with successful products like Reese's Oreo, and a strong pipeline for future growth [32][33] Question: Consumer health and SNAP program impacts - Management expressed that while consumer sentiment is under pressure, the category remains resilient, with minimal expected impact from SNAP changes [85][87] Question: International market performance - Management acknowledged challenges in the international market but remains optimistic about growth and returning to profitability [59][60]

Financial Data and Key Metrics Changes - The company anticipates a non-algorithm top and bottom line year for 2026, with cocoa costs moderating significantly, although year-over-year inflation is still expected [7][8] - The long-term revenue growth algorithm is projected at 2% to 4%, with potential upside for EPS growth in 2026 [9][40] Business Line Data and Key Metrics Changes - The everyday CMG business has shown double-digit growth over the past four weeks, indicating strong performance in that segment [16][17] - The core business experienced close to 5% growth in Q3, excluding the impact of new innovations like Reese's Oreo [32] Market Data and Key Metrics Changes - The company noted that Halloween sales have been disappointing, with a slow start to the season, but there are opportunities to learn from consumer insights for future seasons [25][27] - The international segment faced challenges, resulting in a loss-making quarter, but the company remains optimistic about growth and share gains in core markets [87][88] Company Strategy and Development Direction - The company is focused on balanced growth across its portfolio while investing in brands and innovation to recover margins over the long term [9][32] - There is a strong emphasis on innovation, with a robust pipeline planned for 2026 and 2027, particularly in the salty snacks category [32][95] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the consumer market is challenging, but the category remains resilient, with expectations for continued growth despite pressures [117][120] - The company is optimistic about cocoa costs moderating and potential tariff relief, which could positively impact future performance [42][40] Other Important Information - Cocoa prices are still 70% higher than in 2023, and the company is working closely with retailers to manage pricing strategies effectively [29][30] - The company is investing in digital marketing and innovation to drive performance during key seasons like Halloween and the holidays [35][95] Q&A Session Summary Question: Insights on 2026 expectations and EPS growth - Management discussed the balanced growth and the importance of defining success for 2026, focusing on category growth and margin recovery [8][9] Question: Elasticity and pricing expectations - Management indicated that elasticity is a significant factor for planning, with current expectations being cautiously optimistic [11][12] Question: Halloween sales performance - Management acknowledged a slow start to Halloween but emphasized the importance of learning from consumer insights for future improvements [25][27] Question: International market challenges - Management noted that while the international segment is currently loss-making, they are optimistic about future growth and share gains [87][88] Question: Innovation pipeline for 2026 - Management highlighted the importance of innovation, particularly with successful products like Reese's Oreo, and a strong pipeline for future growth [32][95] Question: Consumer health and SNAP program impacts - Management stated that while consumer sentiment is under pressure, the category remains resilient, and the impact of SNAP changes is expected to be minimal [117][120]

Financial Data and Key Metrics Changes - Total Hershey net sales increased by 6.5% year-over-year, with organic constant currency net sales growth of 6.2%, driven by strong innovation and strategic brand investments [8][21] - Adjusted gross margin decreased by 850 basis points year-over-year to 31.8%, impacted by commodity inflation and unfavorable mix, partially offset by higher volume and net price realization [25][29] - Adjusted earnings per share (EPS) is expected to decline between 36% and 37% due to higher supply chain costs and strategic brand investments [20][29] Business Line Data and Key Metrics Changes - North America Confectionery segment net sales increased by 5.6% year-over-year, with a 40 basis point benefit from the Sour Strips acquisition [22] - North America salty snacks segment net sales increased by 10%, with volume growth of approximately 11% driven by brands like Dots and Skinny Pop [23][15] - International segment net sales increased by 12.1%, with strong growth in Brazil and Europe, driven by net price realization and innovation [24][18] Market Data and Key Metrics Changes - Retail takeaway growth in the US candy, mint, and gum category was 5.4%, with nonseasonal business increasing to 6.6% [9] - Consumption growth exceeded category growth in four of the top five franchises, with notable increases in Reese's (7%), Hershey (11%), and Jolly Rancher (nearly 30%) [10] - The Halloween season began slower than anticipated, but the company remains confident in consumer participation rates [12][13] Company Strategy and Development Direction - The company aims to become a multi-category snacking leader, focusing on strong execution and innovation [7][6] - Plans to increase investments in technology for consumer data insights and supply chain agility in 2026 [14][30] - The company is committed to managing cost inflation and driving productivity to enable brand investments [14][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying trajectory of the business, raising the net sales outlook to approximately 3% growth [19] - The company is optimistic about cocoa supply fundamentals improving, despite ongoing inflation challenges [30][31] - Management acknowledged the dynamic marketplace and the need for flexibility in investment strategies [32] Other Important Information - The company did not repurchase any shares in the third quarter, with $470 million remaining from the $500 million authorization [28] - Capital expenditures for the third quarter were $86 million, reflecting a decrease from the prior year [27] Q&A Session Summary Question: What are the expectations for the Halloween season? - Management noted that while Halloween performance has been disappointing, they are analyzing trends and adjusting strategies for future seasons [12][13] Question: How is the company addressing commodity inflation? - The company is committed to managing cost inflation through various levers and is focused on productivity to support brand investments [14][30] Question: What is the outlook for international markets? - The company expects low single-digit constant currency growth in Mexico, facing economic challenges but gaining share in chocolate [18]