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%).

• Adjusted EPS for Q4 2025 was $1.71 (down 36.4%); full-year adjusted EPS was $6.31 (down 32.7%).

Financial highlights

• Q4 salty snacks business grew 18% organically, driven by double-digit volume growth.

• Gross margin in Q4 exceeded expectations by 250+ basis points, 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 outlook targets 4%-5% net sales growth and meaningful earnings recovery, supported by robust performance in both confection and salty snack segments.

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

• Q1 2026 will see margin and earnings pressure due to higher-cost inventory and tariffs, with profitability inflecting positively from Q2 onward.

• Brand investment will increase double digits in 2026, with a mix of near-term and multi-year initiatives.

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