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Hershey Q2 Earnings Top Estimates on Strong Sales Growth
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Key Takeaways
HSY's Q2 net sales rose 26% to $2.61B, beating estimates, though earnings fell 4.7% year over year.
Volume gains from Easter timing and early Halloween orders drove strong growth across key segments.
Higher commodity costs and ad spending led to gross margin contraction of 510 bps to 38.1%.
The Hershey Company (HSY - Free Report) reported second-quarter 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Additionally, on a year-over-year basis, the company’s top line increased, but the bottom line declined.
Hershey posted adjusted earnings of $1.21 per share, which fell 4.7% year over year but beat the Zacks Consensus Estimate of $1.01.
Hershey Company (The) Price, Consensus and EPS Surprise
Consolidated net sales of $2,614.7 million increased 26% from the year-ago quarter’s tally and exceeded the Zacks Consensus Estimate of $2,548 million. On a constant-currency (cc) basis, organic sales rose 26.3%.
Volume was up approximately 21 points, primarily due to the lapping of planned inventory builds in the North America Confectionery and International segments ahead of the ERP implementation in the second quarter of 2024, the shift in the Easter holiday timing between 2025 and 2024, and earlier shipment of Halloween seasonal orders year over year. Price realization added about 5 points. The Sour Strips acquisition contributed a modest 0.4-point benefit, while foreign currency exchange posed a 0.7-point headwind.
Taking a Closer Look at HSY’s Results
Hershey’s adjusted gross margin was 38.1%, which contracted 510 basis points (bps), primarily due to higher commodity and manufacturing costs, more than offset by higher volume. These pressures offset the benefits from net price realization, supply-chain productivity gains, and savings from the company’s transformation program.
Selling, marketing and administrative (SM&A) expenses rose 11.5% in the second quarter of 2025 compared to the same period in 2024. The increase was primarily due to higher advertising and consumer marketing spending, as well as increased incentive compensation, partially offset by reduced investments in capabilities and technology and net savings from the transformation program. Advertising and related consumer marketing expenses increased 35.5% year over year, primarily due to the timing of expenditures in the North America Confectionery and International segments during the prior-year quarter. Excluding advertising and consumer marketing expenses, SM&A expenses rose 2.2%.
Adjusted operating profit increased 7.1% year over year to $410.6 million, with the operating margin contracting 280 bps to 15.7%. While the margin benefited from increased volume, net pricing gains, supply chain productivity and transformation program savings, these were more than offset by higher commodity and manufacturing costs, along with increased advertising and consumer marketing expenses.
HSY Provides Insights by Segment
Hershey's North America Confectionery segment reported net sales of $2,085.5 million, up 32.0% compared to the same quarter last year. On an organic, constant currency basis, sales rose 31.6%. About 6 percentage points of this growth came from higher prices, while the remaining 25 points came from increased volume. The volume growth was mainly due to three factors: cycling last year’s planned inventory reductions following the ERP system launch, the timing of the Easter holiday falling earlier in 2025, and some Halloween shipments being moved up from the third quarter.
For the 12 weeks ending June 29, 2025, Hershey’s U.S. candy, mint and gum (“CMG”) retail takeaway in the multi-outlet plus convenience store channels rose 21.8%, reflecting the later Easter in 2025. The company’s CMG market share expanded 90 bps. Hershey's North America Confectionery segment income was $503.9 million, marking an 8.5% increase. As a result, the segment margin for the quarter was 24.2%, a decrease of 520 bps.
The North America Salty Snacks segment’s net sales of $315.5 million rose 8.8%. Volume increased nearly 4 percentage points, while net price realization contributed roughly 5 points, reflecting lower trade promotions due to timing and the absence of one-time expenses incurred in the second quarter of 2024.
Hershey’s U.S. salty snack retail takeaway in the multi-outlet plus convenience store channels increased 6.3% for the 12 weeks ending June 29, 2025. The North America Salty Snacks segment income was $66.5 million, an increase of 27.4%. The segment margin improved to 21.1%, an increase of 310 bps year over year.
Hershey's International segment posted net sales of $213.7 million, reflecting a 4.4% increase. Organic, cc net sales rose 10%. The International segment income was $19.8 million, down $5.2 million year over year. As a result, the segment's profit margin contracted 290 bps to 9.3%.
HSY’s Financial Health Snapshot
HSY ended the quarter with cash and cash equivalents of $912.4 million, long-term debt of $5,176.4 million and a total shareholders’ equity of $4,514.6 million. Management expects capital expenditure in the range of $425 million to $450 million for 2025.
What to Expect From HSY in 2025
Management expects net sales to increase at least 2% in 2025.
The company expects adjusted EPS to be between $5.81 and $6 compared to the $6 and $6.18 mentioned earlier, reflecting a decline of 36-38% from 2024, while reported EPS is projected to be between $5.36 and $5.69, down 50%.
Management now expects a reported effective tax rate of approximately 27%, and an adjusted effective tax rate of approximately 24% reflecting the evolving global business and tax environment. Tariff expense, based on current understanding, is anticipated to be approximately $170 million to $180 million in the full year. Moreover, interest expense is now projected to be $200 million, slightly higher than the previously estimated range of $185 million to $190 million.
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The consensus estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 2.7% and 7.3%, respectively, from the prior-year levels. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 10.2%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6% and 12.2%, respectively, from the prior-year levels.
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The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 6.7% and 8.8%, respectively, from the year-ago number.
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Hershey Q2 Earnings Top Estimates on Strong Sales Growth
Key Takeaways
The Hershey Company (HSY - Free Report) reported second-quarter 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Additionally, on a year-over-year basis, the company’s top line increased, but the bottom line declined.
Hershey posted adjusted earnings of $1.21 per share, which fell 4.7% year over year but beat the Zacks Consensus Estimate of $1.01.
Hershey Company (The) Price, Consensus and EPS Surprise
Hershey Company (The) price-consensus-eps-surprise-chart | Hershey Company (The) Quote
Consolidated net sales of $2,614.7 million increased 26% from the year-ago quarter’s tally and exceeded the Zacks Consensus Estimate of $2,548 million. On a constant-currency (cc) basis, organic sales rose 26.3%.
Volume was up approximately 21 points, primarily due to the lapping of planned inventory builds in the North America Confectionery and International segments ahead of the ERP implementation in the second quarter of 2024, the shift in the Easter holiday timing between 2025 and 2024, and earlier shipment of Halloween seasonal orders year over year. Price realization added about 5 points. The Sour Strips acquisition contributed a modest 0.4-point benefit, while foreign currency exchange posed a 0.7-point headwind.
Taking a Closer Look at HSY’s Results
Hershey’s adjusted gross margin was 38.1%, which contracted 510 basis points (bps), primarily due to higher commodity and manufacturing costs, more than offset by higher volume. These pressures offset the benefits from net price realization, supply-chain productivity gains, and savings from the company’s transformation program.
Selling, marketing and administrative (SM&A) expenses rose 11.5% in the second quarter of 2025 compared to the same period in 2024. The increase was primarily due to higher advertising and consumer marketing spending, as well as increased incentive compensation, partially offset by reduced investments in capabilities and technology and net savings from the transformation program. Advertising and related consumer marketing expenses increased 35.5% year over year, primarily due to the timing of expenditures in the North America Confectionery and International segments during the prior-year quarter. Excluding advertising and consumer marketing expenses, SM&A expenses rose 2.2%.
Adjusted operating profit increased 7.1% year over year to $410.6 million, with the operating margin contracting 280 bps to 15.7%. While the margin benefited from increased volume, net pricing gains, supply chain productivity and transformation program savings, these were more than offset by higher commodity and manufacturing costs, along with increased advertising and consumer marketing expenses.
HSY Provides Insights by Segment
Hershey's North America Confectionery segment reported net sales of $2,085.5 million, up 32.0% compared to the same quarter last year. On an organic, constant currency basis, sales rose 31.6%. About 6 percentage points of this growth came from higher prices, while the remaining 25 points came from increased volume. The volume growth was mainly due to three factors: cycling last year’s planned inventory reductions following the ERP system launch, the timing of the Easter holiday falling earlier in 2025, and some Halloween shipments being moved up from the third quarter.
For the 12 weeks ending June 29, 2025, Hershey’s U.S. candy, mint and gum (“CMG”) retail takeaway in the multi-outlet plus convenience store channels rose 21.8%, reflecting the later Easter in 2025. The company’s CMG market share expanded 90 bps. Hershey's North America Confectionery segment income was $503.9 million, marking an 8.5% increase. As a result, the segment margin for the quarter was 24.2%, a decrease of 520 bps.
The North America Salty Snacks segment’s net sales of $315.5 million rose 8.8%. Volume increased nearly 4 percentage points, while net price realization contributed roughly 5 points, reflecting lower trade promotions due to timing and the absence of one-time expenses incurred in the second quarter of 2024.
Hershey’s U.S. salty snack retail takeaway in the multi-outlet plus convenience store channels increased 6.3% for the 12 weeks ending June 29, 2025. The North America Salty Snacks segment income was $66.5 million, an increase of 27.4%. The segment margin improved to 21.1%, an increase of 310 bps year over year.
Hershey's International segment posted net sales of $213.7 million, reflecting a 4.4% increase. Organic, cc net sales rose 10%. The International segment income was $19.8 million, down $5.2 million year over year. As a result, the segment's profit margin contracted 290 bps to 9.3%.
HSY’s Financial Health Snapshot
HSY ended the quarter with cash and cash equivalents of $912.4 million, long-term debt of $5,176.4 million and a total shareholders’ equity of $4,514.6 million. Management expects capital expenditure in the range of $425 million to $450 million for 2025.
What to Expect From HSY in 2025
Management expects net sales to increase at least 2% in 2025.
The company expects adjusted EPS to be between $5.81 and $6 compared to the $6 and $6.18 mentioned earlier, reflecting a decline of 36-38% from 2024, while reported EPS is projected to be between $5.36 and $5.69, down 50%.
Management now expects a reported effective tax rate of approximately 27%, and an adjusted effective tax rate of approximately 24% reflecting the evolving global business and tax environment. Tariff expense, based on current understanding, is anticipated to be approximately $170 million to $180 million in the full year. Moreover, interest expense is now projected to be $200 million, slightly higher than the previously estimated range of $185 million to $190 million.
This Zacks Rank #3 (Hold) stock has gained 13% in the past three months compared with the industry’s growth of 9.8%.
HSY Stock's Price Performance
Image Source: Zacks Investment Research
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The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 10.2%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6% and 12.2%, respectively, from the prior-year levels.
Nomad Foods (NOMD - Free Report) , which manufactures frozen foods, holds a Zacks Rank # 2 at present. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 6.7% and 8.8%, respectively, from the year-ago number.