Hershey reported third‑quarter 2025 net sales of $3,181.4 million, a 6.5% year‑over‑year increase, and adjusted earnings per share of $1.30 versus $2.30 in the same period last year. Reported earnings per share were $1.36, down from $2.30 a year earlier. The company also raised its full‑year adjusted EPS guidance to $5.90–$6.00 and its full‑year reported EPS guidance to $5.48–$5.72.
Net sales growth was driven by a 6.2% rise in organic, constant‑currency sales and a 6‑point net‑price realization. Gross margin contracted to 32.6% from 41.3% a year ago, a decline of 870 basis points, largely due to higher cocoa and tariff costs. North America Confectionery sales increased 5.6% with a 21.8% margin, while North America Salty Snacks sales rose 10.0% with an 18.0% margin. International sales grew 12.1% but the segment posted a $13.6 million loss, a 1,210‑basis‑point drop in margin.
Adjusted operating profit fell 35.4% to $422.5 million, with an operating margin of 13.3% versus 21.9% a year earlier. Selling, marketing and administrative expenses grew 1.5%, offset by a 5.0% decline in advertising and consumer‑marketing spend. Effective tax rates rose to 25.7% from 14.0% a year earlier, reflecting a loss of renewable‑energy tax credits.
The company raised its full‑year outlook after strong year‑to‑date performance. Management cited pricing actions, product innovation, and strategic brand investments as key drivers of the upward revision. The raised guidance reflects confidence in continued sales momentum and margin improvement as commodity costs stabilize.
Strategic initiatives highlighted include the Sour Strips acquisition, whose impact is not included in the updated guidance, and the Advancing Agility Automation initiative, which is expected to generate $350 million to $400 million in annual savings once fully implemented. Current‑year savings from the initiative are $150 million.
Management noted that margin compression is primarily due to volatile cocoa prices and tariff increases, while the company’s hedging strategy and pricing power have helped mitigate some of the impact. The company also emphasized ongoing innovation, such as the Reese’s Oreo Cup, and its focus on international expansion to sustain growth.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.