Hershey's first quarter results drew a negative market reaction, reflecting a combination of ongoing consumer weakness and cost pressures highlighted during the earnings call. Management attributed the decline in sales volumes to reduced consumer demand, particularly in the instant consumable chocolate segment and broader retail channels. CEO Michele Buck noted, “January and February were the worst months,” with some improvement seen later in the quarter, driven by enhanced promotional activity and shelf placement. Additionally, CFO Steve Voskuil cited significant operating margin compression, largely due to increased raw material costs, notably elevated cocoa prices, and higher selling, general, and administrative expenses as the company lapped a period of lower marketing spend last year.
Is now the time to buy HSY? Find out in our full research report (it’s free).
Hershey (HSY) Q1 CY2025 Highlights:
- Revenue: $2.81 billion vs analyst estimates of $2.81 billion (13.8% year-on-year decline, in line)
- Adjusted EPS: $2.09 vs analyst estimates of $1.93 (8% beat)
- Adjusted EBITDA: $727.7 million vs analyst estimates of $668.1 million (25.9% margin, 8.9% beat)
- Adjusted EPS guidance for the full year is $6.09 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 13.2%, down from 32.5% in the same quarter last year
- Organic Revenue fell 13.2% year on year (8.6% in the same quarter last year)
- Sales Volumes fell 15% year on year (3.4% in the same quarter last year)
- Market Capitalization: $33.94 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 Hershey’s Q1 Earnings Call
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**Ken Goldman (JPMorgan) asked about the financial risk of tariffs if government exemptions are not secured. CFO Steve Voskuil clarified the potential quarterly impact and outlined ongoing mitigation efforts, emphasizing that “all levers are on the table” for cost control.
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**Andrew Lazar (Barclays) questioned whether Hershey still expects earnings growth next year despite tariff and cocoa cost headwinds. Voskuil responded that there remains a path to growth, but it is now “narrower” and highly dependent on the success of mitigation strategies.
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**Max Gunport (BNP Paribas) inquired about consumer preference shifts toward healthier snacking and how these trends inform Hershey’s M&A and product strategy. CEO Michele Buck said the company’s focus on permissible and premium products, along with innovation in sweets, is resonating with target demographics.
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**Robert Moskow (TD Cowen) asked how Hershey plans to utilize expanded chocolate processing capacity amid lower volume expectations. Buck replied that the new facility allows for more agile, vertically integrated production, helping the company better meet seasonal demand and support future innovation.
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**Christopher Carey (Wells Fargo Securities) sought details on how price pack architecture and reformulation efforts could help drive value and margin recovery. Buck explained that flexible pack sizes and ongoing R&D investments enable Hershey to adapt to consumer needs and competitive pressures.
Catalysts in Upcoming Quarters
In the quarters ahead, our team will focus on (1) the execution and market reception of the major Reese’s innovation and other new product launches, (2) the effectiveness of Hershey’s tariff mitigation efforts and how these measures impact operating margins, and (3) consumer response to further pricing actions and evolving pack architecture. We will also monitor regulatory developments affecting product formulations and SNAP eligibility for potential category-wide impacts.
Hershey currently trades at $167.75, in line with $167.31 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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