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1. Company Snapshot

1.a. Company Description

The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally.The company operates through three segments: North America Confectionery, North America Salty Snacks, and International.It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, meat snacks, bars and snack bites, mixes, popcorn, and protein bars.


The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Payday, Rolo, Twizzlers, Whoppers, York, Ice Breakers, Breath Savers, Bubble Yum, Lily's, SkinnyPop, Pirates Booty, Paqui, Dot's Homestyle Pretzels, and ONE Bar brands, as well as under the Pelon Pelo Rico, IO-IO, and Sofit brands.It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores.The company was founded in 1894 and is headquartered in Hershey, Pennsylvania.

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1.b. Last Insights on HSY

The Hershey Company's recent performance was driven by strong Q4 earnings, with adjusted EPS of $1.71 beating analysts' expectations of $1.40. The company's top line benefited from solid demand, pricing, and brand strength. Institutional investors, such as Econ Financial Services Corp and Belpointe Asset Management LLC, increased their stakes in the company. Additionally, Evercore ISI raised its price target on Hershey to $250.00, citing a robust outlook for 2026. The company's pricing strategy remains firm, with organic sales rising 6.2% in Q3.

1.c. Company Highlights

2. Hershey's 2025 Earnings Report: A Resilient Performance Amidst Cocoa Inflation

Hershey's reported a strong financial performance in 2025, with actual EPS coming in at $1.71, beating analyst estimates of $1.4. The company's revenue growth was robust, driven by its pricing strategy and consumer demand. The gross margin framework was impacted by cocoa inflation, but the company's hedging strategy helped mitigate the effects. With a P/E Ratio of 37.59, the market is pricing in a certain level of growth, which Hershey's is expected to deliver in 2026 with a forecasted net sales growth of 4% to 5%.

Publication Date: Feb -06

📋 Highlights
  • 2026 Guidance:: Forecast 4-5% net sales growth and double-digit EPS growth (2026, post Q2 inflection).
  • Cocoa Hedging:: Hedged above current market levels, with gross margin framework anticipating 2025-2026 cocoa supply surplus.
  • Salty Snacks Momentum:: Achieved 18% double-digit growth in 2025, driving category tailwinds and retail partnerships.
  • Brand Investments:: "True Campaign" for Hershey/Reese's to leverage consumer connection and fuel 2026 growth.
  • Margin Strategy:: Q1 2026 pressured by tariffs and costs, but Q2+ sees margin improvement from operational efficiencies.

Financial Performance Highlights

The company's financial performance was characterized by a strong EPS beat, with actual EPS coming in at $1.71, significantly higher than the estimated $1.4. Revenue growth was driven by a combination of price and volume, with the salty snacks segment delivering mid-single-digit growth. The company's EBIT margin was robust across segments, with double-digit growth in the confection and salty snacks segments.

Guidance and Outlook

Hershey's provided guidance for 2026, expecting net sales growth of 4% to 5% and meaningful earnings recovery. The company is confident in its ability to deliver top-line growth, driven by investments in innovation, brand building, and execution. With a strong operating plan and a balanced outlook on macros, Hershey's is well-positioned to navigate the challenges of cocoa inflation and macro volatility.

Cocoa Hedging and Pricing Strategy

The company's cocoa hedging strategy helped mitigate the impact of cocoa inflation on its gross margin framework. As Kirk Tanner noted, Hershey's is hedged above current market levels, which provides a level of protection against future price increases. The company's pricing strategy is anchored in consumer insights, and it has taken a patient approach to pricing, balancing consumer needs with cocoa cost inflation.

Valuation and Growth Prospects

With a P/E Ratio of 37.59 and a P/S Ratio of 3.89, the market is pricing in a certain level of growth for Hershey's. The company's ROE of 19.2% and ROIC of 9.0% indicate a strong ability to generate returns on equity and invested capital. As Hershey's continues to invest in innovation, brand building, and execution, it is well-positioned to drive growth and deliver value to shareholders.

3. NewsRoom

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Market Today: Stocks Slide, Oil Majors Rally, Big Deals and FDA Setbacks

Mar -03

Source: gurufocus.com

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Buy 5 Low-Beta High-Yielding Stocks Amid Global Economic Uncertainty

Mar -03

Source: zacks.com

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Davis R M Inc. Sells 3,231 Shares of Hershey Company (The) $HSY

Mar -03

Source: defenseworld.net

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3,543 Shares in Hershey Company (The) $HSY Acquired by 111 Capital

Mar -03

Source: defenseworld.net

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Hershey (NYSE:HSY) Reaches New 12-Month High – Still a Buy?

Mar -01

Source: defenseworld.net

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He's Reese's Biggest Advocate—and Hershey's Biggest Headache

Feb -28

Source: wsj.com

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Buy 5 Non-Tech Wide Moat Stocks to Enhance Your Portfolio Returns

Feb -27

Source: zacks.com

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Is Hershey (HSY) Outperforming Other Consumer Staples Stocks This Year?

Feb -25

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.70%)

6. Segments

North America Confectionery

Expected Growth: 2.5%

The 2.5% growth in North America Confectionery from The Hershey Company is driven by increased consumer demand for premium and sustainable products, expanded distribution channels, and successful innovation in product lines such as Reese's and Hershey's Kisses, offset by pricing pressures and commodity cost inflation.

International

Expected Growth: 4.0%

The Hershey Company's international segment growth of 4.0% is driven by increased consumer demand for premium and chocolate products, expansion into emerging markets, and strategic acquisitions. Pricing actions and favorable foreign exchange rates also contributed to growth. Additionally, the company's digital transformation and marketing efforts have enhanced brand visibility and consumer engagement in international markets.

North America Salty Snacks

Expected Growth: 3.2%

The 3.2% growth of North America Salty Snacks from Hershey Company is driven by consumer preference for convenience, increased snacking occasions, and expanding product portfolio. Additionally, Hershey's strategic investments in marketing and innovation have contributed to the segment's growth, particularly in the premium and better-for-you snack categories.

7. Detailed Products

Hershey's Chocolate Bars

A variety of chocolate bars made with milk chocolate, dark chocolate, and other flavors

Reese's Peanut Butter Cups

A chocolate cup filled with peanut butter, a classic American candy

Hershey's Kisses

Small, bite-sized pieces of milk chocolate with a signature drop shape

Milka Chocolate Bars

A European-style chocolate bar with a creamy milk chocolate and colorful packaging

The Hershey's Company Ice Cream

A range of ice cream products, including cones, bars, and tubs, featuring Hershey's iconic chocolate and other flavors

Hershey's Syrup

A chocolate syrup for topping ice cream, pancakes, waffles, and other desserts

Hershey's Cookies 'n' Creme Bar

A white chocolate bar with chunks of crunchy cookies

Almond Joy and York Peppermint Patie

A coconut and chocolate candy bar and a peppermint-flavored chocolate bar

8. The Hershey Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The Hershey Company operates in the confectionery industry, where there are various substitutes available, such as healthier snack options, candies from other companies, and different types of treats. However, Hershey's has a strong brand presence and a wide range of products, which reduces the threat of substitutes.

Bargaining Power Of Customers

The Hershey Company has a large customer base, including major retailers and consumers. While customers have some bargaining power, Hershey's is a well-established brand with a loyal customer base, which reduces the bargaining power of customers.

Bargaining Power Of Suppliers

The Hershey Company has a large network of suppliers, including cocoa farmers, sugar suppliers, and packaging providers. While suppliers have some bargaining power, Hershey's is a major player in the industry and can negotiate favorable prices and terms with its suppliers.

Threat Of New Entrants

The confectionery industry has high barriers to entry, including significant marketing and advertising expenses, high production costs, and strict regulations. This reduces the threat of new entrants in the market.

Intensity Of Rivalry

The confectionery industry is highly competitive, with major players such as Mars, Inc., Mondelez International, and Nestle. Hershey's competes with these companies on price, product offerings, and marketing, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.61%
Debt Cost 4.28%
Equity Weight 46.39%
Equity Cost 6.07%
WACC 5.11%
Leverage 115.55%

11. Quality Control: The Hershey Company passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

234.16$

Current Price

234.16$

Potential

-0.00%

Expected Cash-Flows