The Hershey Company Q2 FY2025 earnings call

• Innovation and Brand Investment: Emphasized investment in innovation, with products responding well to consumer demand. Innovation as a percent of net sales is up significantly from 2019, focusing on delivering value to consumers.
• Profit Recovery Plans: Profit recovery plans are well underway, with top-line momentum and investments in brands and technology (ERP platform, AI) driving efficiency.
• Category Growth Drivers: Chocolate category growth driven by innovation, emotional well-being benefits, and favorable comps. Salty snacks like Dot's and SkinnyPop show strength with innovation, flavor, and distribution efforts.
• Tariff Optimism: Optimism regarding cocoa tariff exemptions due to public statements and ongoing country negotiations.
• Halloween Outlook: Anticipation of a strong Halloween season with early shipments and consumer trends supporting earlier celebrations.
• Supply Chain and Tariffs: Focus on optimizing supply chain to mitigate tariff exposure, with agility and cross-border opportunities.

No specific segment performance breakdown with absolute terms and revenue contribution % provided in the transcript.

• 2026 Outlook: Expect on-algorithm earnings growth, with pricing, productivity, and transformation savings contributing. Pricing impact to be mid-teens in 2026, with 80% of profit benefit in 2026, starting with Easter 2026.
• EPS Expectations: Seen as potentially well into double digits for 2026, pending tariff and cocoa cost outcomes.

• Cocoa Price Volatility: Continued cocoa price inflation remains a risk, though hedging and supply chain optimization are in place.
• Tariff Uncertainty: Uncertainty around cocoa tariff exemptions and their impact on margins.
• Consumer Demand Shifts: Potential impact from GLP-1 drugs and SNAP benefit changes, though currently not expecting material impact in 2026-2027.

Q: Andrew Lazar asks about underlying business health and Kirk's selection.

A: Michele Buck talks about consistent investment, momentum, and Kirk's experience.

Q: Max Gumport asks about pricing impact and reinvestment.

A: Steve Voskuil discusses margin recovery, reinvestment in brands, and innovation.

Q: Megan Clapp asks about CMG nonseasonal performance.

A: Michele Buck talks about innovation, emotional benefits, and comps.

Q: Peter Galbo asks about tariffs and Halloween.

A: Michele Buck discusses tariff optimism and Halloween outlook.

Q: Jim Salera asks about salty snacks.

A: Michele Buck talks about strength in Dot's and SkinnyPop, innovation, and distribution.

Q: Alexia Howard asks about innovation pace.

A: Michele Buck talks about increased innovation, percent of net sales, and strategic innovations.

Q: Leah Jordan asks about pricing phasing.

A: Michele Buck and Steve Voskuil discuss pricing phasing, impact on top line, and profit benefit.

Q: David Palmer asks about tariff mitigation.

A: Steve Voskuil talks about supply chain optimization.

Q: Scott Marks asks about cocoa supply.

A: Steve Voskuil discusses cocoa market dynamics and supply chain.

Q: Chris Carey asks about tax rate and EPS.

A: Steve Voskuil talks about tax challenges and EPS puts and takes