The Hershey Company (HSY) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals positive sentiment with better-than-expected financial elasticity, optimistic margin outlooks due to cocoa price declines, and strong brand investments. Despite some uncertainties in pricing impacts and SNAP changes, management's confidence in growth, especially in the Salty snacks and protein segments, suggests a positive market reaction. The flexibility in guidance and strategic campaigns for brand relevance further support a positive outlook.
Key Financial Performance
Net Sales Growth 4% to 5% net sales growth projected for 2026, reflecting resilience in the portfolio and momentum from 2025.
Cocoa Inflation Impact Cocoa inflation and macro volatility were significant headwinds in 2025, but the company managed to strengthen its market position and invest for the future.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Market Position: Strengthened market position through skillful execution in 2025.
Operational Challenges: Navigated serious headwinds like cocoa inflation and macro volatility.
Future Investments: Investing in innovation, brand building, and execution to drive growth in 2026.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Cocoa Inflation: The company faced significant challenges due to rising cocoa prices, which could adversely impact production costs and profit margins.
Macro Volatility: Economic uncertainties and market fluctuations posed risks to the company's operations and financial performance.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Net Sales Growth: The company is projecting 4% to 5% net sales growth for 2026.
Earnings Recovery: Hershey anticipates meaningful earnings recovery in 2026.
Investment Focus: The company plans to invest in innovation, brand building, and execution to drive growth in 2026.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Is there a risk of price deflation in the chocolate category due to the recent decline in cocoa prices?
A:Management acknowledged the decline in cocoa prices but emphasized that their pricing strategy is based on consumer insights and long-term growth. They noted that 75% of their portfolio remains under $4 and that pricing taken in 2025 does not fully cover cocoa cost inflation in 2026. They are focused on maintaining affordability and investing in growth.
Q:What is driving the better-than-expected elasticity outcomes, and is there flexibility in the plan for potential changes?
A:Management is encouraged by the favorable elasticity outcomes and has planned for a 0.8 elasticity to account for fluctuations. They aim to do better with strong activation calendars and investments in marketing and innovation.
Q:How does the recent decline in cocoa prices impact the margin framework and expectations for 2027?
A:Management is optimistic about the future, anticipating a larger supply surplus in 2025 and 2026. They noted that their hedging program for 2026 is above current market levels, suggesting potential upside for further deflation in 2027. They plan to provide more details at the investor conference.
Q:What is the durability of increased brand investments in 2026, and how will they impact 2027?
A:The investments in 2026 are described as multiyear, laying a foundation for growth in 2027 and beyond. These include scaling R&D, innovation, brand building, and retail sales capabilities. Management emphasized balancing growth and margin recovery in 2027.
Q:What drove the upside in gross margin in the recent quarter?
A:The upside was primarily due to stronger volumes and lower-than-expected tariffs on supplier materials. There were some LIFO headwinds, but the tariff savings were the biggest positive surprise.
Q:Why is Hershey launching a new campaign for Hershey and Reese's brands now?
A:Management highlighted the importance of staying relevant with consumers. The new campaigns aim to build on the emotional connection and love for the brands, with a full year of planned activities and innovations.
Q:What is the rationale behind the 2026 guidance and the degree of flexibility in the plan?
A:The guidance reflects strong momentum across the portfolio, particularly in the Salty snacks business, which grew 18% in Q4. Management has built flexibility into the plan to respond to macroeconomic headwinds and competitive dynamics.
Q:How does Hershey view the competitive dynamics in the Salty snacks category?
A:Management is confident in their Salty snacks portfolio, which grew 18% in Q4. They emphasized that customers reward performance and velocity, and they expect to continue gaining shelf space and support for innovation.
Q:What are the expectations for earnings growth in 2027, and what factors could impact it?
A:Management anticipates potential tailwinds from cocoa deflation in 2027 but emphasized the importance of balancing margin recovery with growth investments. They are monitoring macroeconomic factors like SNAP and GLP-1s closely.
Q:What is the impact of SNAP changes on Hershey's business?
A:Management noted that only two states have implemented SNAP waivers for candy so far, with a total of 12 states expected. They view this as a manageable headwind and have factored it into their outlook.
Q:What is the expected impact of cultural and seasonal events on growth?
A:Management expects these events to contribute to robust top-line growth. They highlighted their strong execution in seasonal categories and the opportunity to connect their brands to cultural moments like the Olympics and NCAA Final Four.
Q:How does Hershey plan to address concerns about long-term volume growth?
A:Management emphasized the resilience of the Confection category and the growth potential in the Salty snacks category. They are focused on better-for-you and premium segments, as well as innovation to drive volume growth.
Q:What are the learnings from the European chocolate market, and how do they apply to the U.S.?
A:Management noted significant differences between the U.S. and European markets, including higher brand differentiation and affordability in the U.S. They believe these factors contribute to the resilience of the U.S. market.
Q:What is the impact of pricing on international markets, and how does it compare to the U.S.?
A:Management acknowledged higher elasticity in international markets due to their premium positioning and limited scale. They emphasized the differentiated and affordable nature of their U.S. portfolio.
Q:What is the outlook for the protein portfolio, and how does it fit into Hershey's strategy?
A:Management sees protein as a significant growth opportunity and is investing in R&D and innovation. They are open to both organic growth and acquisitions to expand their presence in the protein space.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the potential volume impact of pricing in 2026, stating only that it is embedded in the guidance. They also did not provide clear answers on the exact magnitude of SNAP and GLP-1 impacts, citing early days and ongoing analysis. Additionally, they deferred detailed discussions on 2027 investments and growth plans to the upcoming Investor Day.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO Tanner
CFO introduction
Greetings Hershey
Hershey President
Hershey QA
Hershey Vice
Hershey answer
Instructions reminder
President CEO
President Investor
QA session
Relations today
Tanner Hershey
answer session
host Vice
investor information
release remark
remark website
session Instructions
session chance
today QA
HSY Transcript
The Hershey Company (HSY) Q1 2026 Earnings Call Prepared Remarks Transcript
Positive4-30
The earnings call reveals strong financial performance with a 10.6% increase in net sales and a 12.4% rise in EPS. Despite some risks such as commodity inflation and geopolitical uncertainties, the company demonstrates resilience through strategic investments and a focus on growth. The dividend increase and share repurchase indicate a commitment to shareholder returns. Overall, the positive elements outweigh the negatives, suggesting a likely positive stock price movement in the next two weeks.
The Hershey Company (HSY) Q1 2026 Earnings Call Transcript
Positive4-30
Despite not discussing operational updates or strategic initiatives, the financial performance was strong with a 10% YoY revenue increase and margin expansion. However, risks such as supply chain disruptions and competitive pressures were noted. The absence of a shareholder return plan discussion and potential strategic execution risks slightly temper the positive outlook. Overall, the strong financials, including EPS growth, suggest a positive stock price movement in the short term.
The Hershey Company (HSY) Q4 2025 Earnings Call Prepared Remarks Transcript
Unknown2-5
Despite strong financial performance with a 7% increase in net sales and a 6% dividend increase, concerns about cocoa inflation, macroeconomic volatility, and volume declines due to price elasticity could offset positive sentiments. The absence of share repurchases and a decrease in gross margin indicate mixed signals. The company's proactive approach to risks and strategic priorities for growth, however, provides a balanced outlook, resulting in a neutral sentiment.
The Hershey Company (HSY) Q4 2025 Earnings Call Transcript
Positive2-5
The earnings call reveals positive sentiment with better-than-expected financial elasticity, optimistic margin outlooks due to cocoa price declines, and strong brand investments. Despite some uncertainties in pricing impacts and SNAP changes, management's confidence in growth, especially in the Salty snacks and protein segments, suggests a positive market reaction. The flexibility in guidance and strategic campaigns for brand relevance further support a positive outlook.
HSY Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
