Hershey Presents at 2025 CAGNY Conference; Reaffirms Earnings Outlook for 2025

Rhea-AI Summary

Hershey (NYSE: HSY) reaffirmed its 2025 financial outlook during its presentation at the 2025 Consumer Analyst Group of New York (CAGNY) conference. The company expects total net sales growth of at least 2%, with the Sour Strips acquisition contributing approximately 30 basis points to growth, while foreign currency exchange rates are anticipated to be a 30 basis point headwind.

The company's earnings projections indicate a significant decline, with reported earnings per share expected to decrease in the high-40% range and adjusted earnings per share projected to decline in the mid-30% range. During the conference, executives reviewed growth strategies and progress in enhancing commercial capabilities and optimizing their operating model to deliver long-term shareholder value.

Positive

• Sour Strips acquisition expected to contribute 30 basis points to net sales growth
• Net sales growth projected at minimum 2% for 2025

Negative

• Reported EPS expected to decline in high-40% range
• Adjusted EPS projected to decline in mid-30% range
• Foreign currency exchange rates creating 30 basis point headwind to net sales growth

Insights

Financial Analyst

The reaffirmed guidance from Hershey presents a concerning outlook that deserves careful scrutiny. While the company projects modest top-line growth of at least 2%, the projected decline in earnings per share is particularly alarming - with reported EPS expected to drop in the high-40% range and adjusted EPS declining in the mid-30% range.

This dramatic earnings compression while maintaining positive sales growth signals severe operational challenges. The projected performance suggests Hershey is facing substantial margin pressure from multiple fronts: rising input costs, particularly in cocoa where prices have recently hit record highs, increased labor expenses, and ability to pass through additional price increases to consumers who are already showing sensitivity to previous pricing actions.

The minimal impact of the Sour Strips acquisition (30 basis points) on sales growth, completely offset by foreign currency headwinds, indicates that Hershey's inorganic growth strategy isn't providing meaningful near-term benefits to counterbalance these operational headwinds. This raises questions about the company's capital allocation strategy and return on invested capital.

The magnitude of the projected earnings decline is particularly noteworthy for a consumer staples company, which typically demonstrates more stable earnings patterns. This suggests that Hershey's traditional pricing power and brand strength may be facing unprecedented challenges in the current inflationary environment, where consumers are increasingly price-sensitive and trading down to private label alternatives.

HERSHEY, Pa., Feb. 18, 2025  /PRNewswire/ -- In a presentation today at the 2025 Consumer Analyst Group of New York (CAGNY) conference, Michele G. Buck, Chairman, President and Chief Executive Officer, and Steven E. Voskuil, Senior Vice President and Chief Financial Officer, The Hershey Company (NYSE: HSY), will review growth strategies and progress in elevating commercial capabilities and optimizing our operating model to deliver long-term shareholder value.

The Company reaffirms its full-year 2025 financial expectations for net sales and earnings per share-diluted previously provided in its February 6, 2025, earnings release. 

2025 Full-Year Outlook		Total Company
Net sales growth1		At least 2%
Reported earnings per share growth		Down high-40% range
Adjusted earnings per share growth		Down mid-30% range

¹ The impact of the Sour Strips acquisition is anticipated to be an approximate 30 basis point benefit to net sales growth for the full-year 2025. Additionally, the impact of foreign currency exchange rates is anticipated to be an approximate 30 basis point headwind to net sales growth for the full-year 2025.

The company's CAGNY presentation and accompanying slides can be accessed in the "CALENDAR OF EVENTS" section of the corporate website. (https://www.thehersheycompany.com/en_us/investors/events-reports-releases/calendar-of-events.html).

Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to our 2025 Full-year Financial Outlook and other statements regarding our business outlook and financial performance. Many of these forward-looking statements can be identified by the use of words such as "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would," among others. These statements are made based upon current expectations that are subject to risk and uncertainty. Because actual results may differ materially from those contained in the forward-looking statements, you should not place undue reliance on the forward-looking statements when deciding whether to buy, sell or hold the Company's securities. Factors that could cause results to differ materially include, but are not limited to: disruptions or inefficiencies in our supply chain due to the loss or disruption of essential manufacturing or supply elements or other factors; issues or concerns related to the quality and safety of our products, ingredients or packaging, human and workplace rights, and other environmental, social or governance matters; changes in raw material and other costs, along with the availability of adequate supplies of raw materials and the Company's ability to successfully hedge against volatility in raw material pricing; the Company's ability to successfully execute business continuity plans to address changes in consumer preferences and the broader economic and operating environment; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; failure to successfully execute and integrate acquisitions, divestitures and joint ventures; changes in governmental laws, regulations and policies, including taxes and tariffs; political, economic, and/or financial market conditions, including with respect to inflation, rising interest rates, slower growth or recession, changes in the U.S. administration, and other events beyond our control such as the impacts on the business arising from the conflict between Russia and Ukraine; risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure and that of our customers and partners (including our suppliers); our ability to hire, engage and retain a talented global workforce, our ability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs; complications with the design, implementation or usage of our new enterprise resource planning system, including the ability to support post-implementation efforts and maintain enhancements, new features or modifications; and such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2024 and from time to time in our other filings with the U.S. Securities and Exchange Commission. All information in this presentation is as of February 18, 2025. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

 

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SOURCE The Hershey Company

FAQ

What is Hershey's (HSY) projected net sales growth for 2025?

Hershey projects net sales growth of at least 2% for full-year 2025.

How much will HSY's earnings per share decline in 2025?

Hershey's reported EPS is expected to decline in the high-40% range, while adjusted EPS is projected to decline in the mid-30% range.

What impact will the Sour Strips acquisition have on HSY's 2025 performance?

The Sour Strips acquisition is expected to provide approximately 30 basis points benefit to net sales growth in 2025.

How will foreign currency exchange rates affect HSY's 2025 sales?

Foreign currency exchange rates are expected to create an approximate 30 basis point headwind to net sales growth in 2025.