Hershey’s second quarter performance surpassed Wall Street’s expectations, reflecting a meaningful rebound in sales volumes and continued brand investment. Management highlighted that consumer demand for both chocolate and salty snacks improved, driven by innovation, expanded shelf space, and promotional activity. CEO Michele Buck pointed to the company’s ability to grow volumes in a challenging environment, emphasizing that "top line momentum" and strategic reinvestment in marketing and technology were key to the quarter’s outcome. The company also acknowledged ongoing pressures from commodity costs, particularly cocoa, and noted progress in profit recovery initiatives.
Is now the time to buy HSY? Find out in our full research report (it’s free).
Hershey (HSY) Q2 CY2025 Highlights:
- Revenue: $2.61 billion vs analyst estimates of $2.54 billion (26% year-on-year growth, 3.1% beat)
- Adjusted EPS: $1.21 vs analyst estimates of $1.00 (20.4% beat)
- Adjusted EBITDA: $534.4 million vs analyst estimates of $412.5 million (20.4% margin, 29.5% beat)
- Operating Margin: 7.4%, down from 13.9% in the same quarter last year
- Organic Revenue rose 26.3% year on year (-16.8% in the same quarter last year)
- Sales Volumes rose 21% year on year (-18% in the same quarter last year)
- Market Capitalization: $35.56 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Hershey’s Q2 Earnings Call
- Andrew Lazar (Barclays) asked if the business needs an earnings reset as a new CEO steps in. CEO Michele Buck responded that ongoing investments and current momentum reduce the need for a reset, highlighting consistent brand and technology investment.
- Max Gumport (BNP Paribas) sought details on the impact of recent pricing actions on future margins. CFO Steve Voskuil answered that price increases are significant but not enough to fully offset cocoa inflation, requiring additional cost savings.
- Megan Clapp (Morgan Stanley) questioned the sustainability of nonseasonal chocolate growth. Buck explained that while innovation and expanded shelf space are helping, growth rates may moderate due to tougher year-over-year comparisons.
- Peter Galbo (Bank of America) inquired about the potential for cocoa tariff exemptions. Buck expressed increased optimism due to ongoing discussions with government officials, but noted outcomes remain uncertain.
- James Salera (Stephens Inc.) asked about the strength of salty snacks amid overall category pressure. Buck attributed outperformance to brand positioning, innovation, multipack expansion, and broader distribution.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be closely tracking (1) the pace and effectiveness of Hershey’s pricing actions in recapturing lost margins, (2) the impact of new product launches and brand activations on both seasonal and nonseasonal sales, and (3) any regulatory developments related to cocoa tariffs and SNAP benefit changes. The company’s ability to maintain volume growth and manage commodity cost volatility will also be key markers of success.
Hershey currently trades at $175.86, down from $186.42 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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