Hershey(US:HSY)2025-07-30 13:15Financial Data and Key Metrics Changes - The company is expecting a mid-teens impact from pricing actions in 2026, with 80% of the profit benefit anticipated to occur in that year [75][80] - The company noted that the pricing increase is primarily to recover cocoa inflation and does not fully compensate for the inflation experienced up to 2025 [24][80] Business Line Data and Key Metrics Changes - The instant consumables segment is gaining share and growing ahead of the category, with significant improvements in distribution and productivity [60] - The salty snacks segment, particularly Dots and Skinny Pop, is performing well due to strong consumer acceptance and innovative marketing strategies [48][50] Market Data and Key Metrics Changes - The chocolate category is experiencing growth driven by innovation, emotional well-being, and strategic partnerships with retailers [34] - The company is optimistic about the cocoa supply dynamics, expecting a modest surplus and improved agricultural practices in West Africa [99][100] Company Strategy and Development Direction - The company is focused on long-term investments in brands and capabilities to drive sustainable growth, with a commitment to margin recovery through pricing and cost savings [10][72] - The new CEO, Kirk, is expected to leverage his extensive experience in consumer packaged goods to enhance the company's strategic direction [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential for tariff exemptions on cocoa, indicating that discussions with the government are progressing positively [40] - The company is monitoring consumer trends related to health and wellness, with no significant impact expected from GLP-1 medications in 2025 [67] Other Important Information - The company is planning significant marketing investments and innovation initiatives for the upcoming year, including major events like the Olympics [28][66] - The company is actively working on optimizing its supply chain to mitigate tariff impacts and enhance operational efficiency [92] Q&A Session Summary Question: Is there a need for a reset in earnings and margins with the new CEO? - Management believes there is no need for a reset, as the company has consistently invested in growth and has momentum on its side [12] Question: What is the expected elasticity for the new pricing? - The company anticipates a one-to-one elasticity for the new pricing, with favorable conditions compared to historical data [17][18] Question: How will pricing impact the P&L in 2026? - Pricing actions are expected to significantly improve margins, but will not fully recover cocoa inflation experienced up to 2025 [24][25] Question: What is the outlook for the Halloween season? - Management is optimistic about Halloween sales, citing strong retailer plans and consumer trends [43] Question: How is the company addressing competition in the instant consumables segment? - The company is gaining share through improved distribution and innovative marketing strategies [60] Question: What are the expectations for cocoa supply and pricing? - Management is optimistic about cocoa supply dynamics, expecting a modest surplus and improved agricultural practices [99][100] Question: How is the company planning to mitigate tariff impacts? - The company is focusing on supply chain optimization and is hopeful for tariff exemptions on cocoa [92][40]