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Hershey's Q4 Earnings Release on Deck: What to Expect From HSY?

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The Hershey Company (HSY - Free Report) is likely to register top and bottom-line growth when it reports fourth-quarter 2024 earnings on Feb. 6. The Zacks Consensus Estimate for revenues is pegged at $2.85 billion, implying a 7.3% increase from the prior-year quarter’s reported figure. 

The consensus mark for earnings has remained unchanged in the past 30 days at 2.38 per share, which suggests an increase of 17.8% from the figure reported in the year-ago quarter. However, HSY has a trailing four-quarter negative earnings surprise of 0.7%, on average.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Hershey Company (The) Price, Consensus and EPS Surprise

Hershey Company (The) Price, Consensus and EPS Surprise

Hershey Company (The) price-consensus-eps-surprise-chart | Hershey Company (The) Quote

Things to Know About HSY’s Upcoming Results

Hershey has been benefiting from its brand strength, which is driven by constant innovation to cater to consumer needs. For example, Reese's Caramel became the #1 innovation in its category for 2024, with Reese's Lava also outperforming initial expectations. This innovation-led strategy enhances consumer loyalty and helps Hershey capture market share amid heightened competition. 

Hershey’s transformation efforts have also been yielding positively. As part of its transformation, HSY has been evolving its marketing organization to place a stronger focus on its product portfolio, allowing the company to better meet the changing needs of consumers. Management has been integrating its supply chain across Confectionery and Salty Snacks, leveraging its new ERP platform to unlock greater efficiency and scalability. The company is also rebuilding its technology group and advancing its capabilities in data science and technology to gain deeper insights into consumer behavior and market trends. These upsides are likely to have contributed to results in the quarter under review.

Our model suggests a 5.8% sales increase for the North America Confectionery segment for the fourth quarter.
  
Hershey is operating in a challenging environment, thanks to historically high cocoa prices and a stretched consumer base. Consumer behavior has shifted toward value-seeking due to economic pressures, prioritizing budget for essentials. This has reduced foot traffic to convenience and drug stores, where Hershey’s brands are over-indexed.  Shopping shifts to club, dollar and online channels — where the company’s products are less developed — have further complicated matters.

While these factors and the impact of inflation on key ingredients like cocoa and sugar raise concerns, benefits from price realization and supply-chain productivity improvements are likely to have offered some respite. We expect an adjusted gross margin contraction of 160 basis points for the quarter to be reported.  

Earnings Whispers for HSY Stock

Our proven model doesn’t conclusively predict an earnings beat for Hershey this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. 

Hershey carries a Zacks Rank #5 (Strong Sell) and has an Earnings ESP of -1.52%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Some Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Kenvue Inc. (KVUE - Free Report) currently has an Earnings ESP of +1.45% and a Zacks Rank of 3. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.78 billion, which indicates growth of 2.9% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Kenvue’s fourth-quarter 2024 EPS is pegged at 25 cents, which implies a 19.4% decrease year over year. KVUE has a trailing four-quarter earnings surprise of 10.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aramark (ARMK - Free Report) currently has an Earnings ESP of +5.53% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Aramark’s quarterly revenues is pegged at $4.61 billion, which suggests an increase of 4.6% from the prior-year quarter.

The Zacks Consensus Estimate for Aramark’s quarterly earnings per share is pegged at 48 cents, indicating 17.1% growth from the year-ago period. ARMK has a trailing four-quarter earnings surprise of 8%, on average.

WK Kellogg (KLG - Free Report) currently has an Earnings ESP of +14.85% and a Zacks Rank of 3. The company is likely to register a decline in its top line when it reports fourth-quarter 2024 numbers. The Zacks Consensus Estimate for WK Kellogg’s quarterly revenues is pegged at $642.9 million, which suggests a decrease of 1.2% from the prior-year quarter.

The Zacks Consensus Estimate for WK Kellogg’s quarterly earnings per share is pegged at 25 cents, indicating a 38.9% increase from the year-ago period. KLG delivered an earnings surprise of 19.2% in the last reported quarter.


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