The Hershey Company (HSY) Q4 2024 Prepared Remarks earnings summary

Executive summary

• Q4 2024 net sales grew 8.7% to $2.89B, with core business up 3% after adjusting for shipping days, inventory, and ERP laps.

• U.S. candy, mint, and gum retail sales rose 2%, with seasonal share gains and new product momentum.

• North American salty snacks retail sales accelerated 7.1%, led by SkinnyPop and Dot's Pretzels.

• International segment saw double-digit constant currency organic sales growth in Mexico and EMEA, and high single-digit growth in India.

• Q4 reported net income surged 130.6% to $796.6M; full-year net income up 20.5% to $2.22B.

Financial highlights

• Full year 2024 net sales up 0.3% to $11.2B amid macro pressures.

• Q4 organic constant currency net sales grew 9%.

• Q4 reported gross margin rose 1170 bps to 54.0%; adjusted gross margin up 60 bps to 44.8%.

• Q4 adjusted EPS was $2.69, up 33.2%; full-year adjusted EPS declined 2.3% to $9.37.

• Q4 dividends paid totaled $270 million, up 13.7% year-over-year.

Outlook and guidance

• 2025 net sales growth expected at least 2%, mainly from price realization; volume slightly down.

• 2025 reported EPS projected to decline in high-40% range; adjusted EPS down mid-30% range due to higher commodity costs and tax rate.

• Adjusted gross profit margin expected to contract 650-700 bps in 2025 due to high cocoa and raw material costs.

• Q1 2025 net sales expected to decline mid-teens due to ERP-related inventory build and Easter timing.

• Full year 2025 adjusted effective tax rate projected at 14%-15%.