The Hershey Company (NYSE: HSY) announced its financial results for the first quarter ended March 30, 2025, revealing significant impacts from strategic initiatives, market conditions, and ongoing tariff uncertainties. This comprehensive analysis provides an authoritative and data-driven overview of Hershey’s recent performance, offering insights into who is affected, what changed, when the impacts occurred, and where the company’s financials now stand.
Consolidated Net Sales: \(2.805 billion, down 13.8% from \)3.253 billion in Q1 2024.
Organic Constant Currency Net Sales Decline: 13.2%, reflecting volume declines and pricing effects.
Reported Net Income: \(224.2 million, a drastic decrease of 71.7% compared to \)797.5 million in the prior year quarter.
Adjusted Earnings Per Share (Diluted): \(2.09, down 31.9% from \)3.07 in Q1 2024.
Gross Margin: Reported at 33.7%, down 1780 basis points from 51.5% in Q1 2024; adjusted gross margin declined 370 basis points to 41.2%.
Operating Profit: Reported $369.2 million, down 65.1%, with operating margin of 13.2%, a decline of 1930 basis points.
North America Confectionery: Net sales fell 15.0% to $2.3 billion, driven by volume headwinds of approximately 18 points due to ERP system implementation lapses, Easter season timing, and fewer shipping days. Segment income decreased 26.6%.
North America Salty Snacks: Net sales increased 1.0% to \(277.8 million, with volume growth around 4 points partially offset by 3 points price declines, reflecting packaging costs for SkinnyPop. Segment income increased 8.1% to \)41.9 million.
International: Net sales decreased 15.9% to $227.5 million, impacted by volume declines of 8% and foreign exchange headwinds. Segment income dropped 32.9%.
Tariff-related expenses are projected between \(15 million and \)20 million in Q2 2025 due to ongoing negotiations and uncertainty around U.S. import and retaliatory tariffs.
The company’s effective tax rate has increased by approximately 1160 basis points, influenced by decreased renewable energy tax credits and foreign rate differentials.
Hershey’s strong balance sheet, with total assets near \(14 billion and cash balances surging by 107% to \)1.5 billion, supports investment flexibility and strategic acquisitions such as Sour Strips to broaden its better-for-you portfolio.
Comparing to FY 2024 results: - Hershey’s net income for the full year 2024 was approximately \(2.22 billion on total revenues of \)11.2 billion, with a net profit margin of 19.83%. - The Q1 2025 net income represents roughly 10% of the full-year 2024 net income, indicating a significant decline largely from derivative mark-to-market losses and higher commodity costs.
Hershey projects 2025 full-year net sales growth of at least 2%, with reported earnings per share expected to decline in the high 40% range, and adjusted EPS down in the mid-30% range.
Capital expenditures are anticipated between \(425 million and \)450 million, emphasizing investments in automation and supply chain enhancements.
In earlier Hershey earnings calls, management highlighted risks from geopolitical tensions affecting tariffs, commodity price volatility impacting margins, and an ongoing ERP system upgrade slated to improve long-term efficiency. The current 8-K details the Q1 manifestation of these issues, confirming volume headwinds from ERP implementation and tariff uncertainty.
Michele Buck, Hershey Company President and CEO, stated: “Consumption in the quarter exceeded our expectations in both U.S. Candy, Mint, and Gum and Salty Snacks, driven by the strength of seasons, sweets, Dot’s and SkinnyPop. Despite heightened cost pressure, our strong balance sheet gives us flexibility to invest in the business and participate in recent strategic acquisitions that further expand our better-for-you portfolio and drive long-term value creation.”
Who: Hershey Company management and investors What: Q1 2025 financial results and strategic initiatives When: Quarter ended March 30, 2025 Where: U.S. and international markets Key financial terms: Net sales, gross margin, operating profit, tariff expense, ERP system, derivative mark-to-market losses, capital expenditures, adjusted earnings per share
For detailed reference, review the full 8-K report here: Hershey Q1 2025 8-K Report
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This authoritative and data-rich analysis provides investors and stakeholders a clear understanding of Hershey’s current challenges and strategic outlook as of Q1 2025, grounded in concrete financial metrics and contextual insights.