The Hershey Company (HSY) Q4 2025 [Q&A] earnings summary

Executive summary

• Achieved strong momentum in 2025 despite cocoa inflation and macro volatility, with investments in innovation, brand building, and execution fueling growth into 2026 and beyond.

• Fourth-quarter 2025 net sales rose 7.0% to $3,091.0 million, with organic constant currency growth of 5.7% and acquisition benefits of 1.2 points.

• Full-year 2025 net sales increased 4.4% to $11,692.6 million, with organic constant currency growth of 4.2%.

• Reported net income for Q4 2025 was $320.0 million (down 59.9% year-over-year); full-year net income was $883.3 million (down 60.3%).

• Focused on balancing price increases, consumer affordability, and continued investment in marketing and R&D to sustain long-term growth.

Financial highlights

• Q4 saw 18% growth in the snack business, driven by double-digit volume growth.

• Gross margin outperformed expectations by over 250 basis points in Q4, mainly due to lower-than-expected tariffs and strong volumes.

• Q4 2025 gross margin fell 17.0 points to 37.0%; adjusted gross margin dropped 650 bps to 38.3%.

• Q4 2025 operating profit was $444.9 million (down 52.6%), with a margin of 14.4% (down 18.1 points). Adjusted operating profit was $529.3 million (down 24.0%), margin 17.1% (down 700 bps).

• 2026 guidance includes 2.5%-3.5% organic sales growth and 10% pricing, with embedded volume/mix decline.

Outlook and guidance

• 2026 net sales expected to grow 4%-5%, with acquisitions contributing ~150 bps and currency impact neutral.

• 2026 reported EPS projected at $7.77–$8.19 (up 79–89%); adjusted EPS at $8.20–$8.52 (up 30–35%).

• Gross margin expected to recover to 41% in 2026, with further upside possible in 2027 as cocoa costs potentially decline.

• Q1 2026 will see margin and earnings pressure due to higher-cost inventory and tariffs, with profitability inflecting in Q2 and double-digit EPS growth for the balance of the year.

• Advancing Agility & Automation Initiative to deliver ~$100 million in savings in 2026.