The Hershey Company Q4 FY2025 earnings call

• Kirk mentioned the team's strong execution in 2025 despite headwinds like cocoa inflation and macro volatility, with 4%-5% net sales growth and earnings recovery expected in 2026. • Snack business had 18% growth in Q4 with double-digit volume growth. • Campaigns for Hershey's and Reese's, including a true campaign for the first time in eight years, with innovation and a movie about Milton Hershey planned. • Focus on cultural and seasonal events like the Olympics, NCAA final four, and 250-year anniversary of the country to boost engagement. • Investments in R&D, innovation, brand building, and retail sales team to drive growth and capture new consumers.

Confection segment had around 3% organic sales growth; Salty snacks saw mid-single digits organic sales growth; International had low single-digit organic sales decline. EBIT was double-digit year over year across all segments.

• Expect 4%-5% net sales growth and meaningful earnings recovery in 2026. • Elasticities factored in with a range of 0.8, allowing for upside potential. • Brand investments with double-digit advertising increase, balancing current growth and long-term foundation. • Margin recovery expected with cocoa price deflation taking future pricing pressure down, but balancing growth and margin in 2027.

• Cocoa price volatility and macroeconomic headwinds. • SNAP rule changes at state and federal levels impacting sales. • Competitive response and impact of GLP-1 drugs on consumer behavior.

Q: Concern about price deflation in chocolate category and its impact on guidance A: Kirk noted competitors are sophisticated, private label is small, pricing anchored in consumer insights, 75% of portfolio under $4, and deflationary cocoa momentum reduces future pricing pressure Q: Elasticity performance and flexibility in plan A: Kirk and Steve mentioned favorable elasticities so far, elasticities fluctuate, plan accounts for 0.8 with upside potential from strong activation calendar Q: Cocoa margin framework and future gross margin recovery A: Kirk said cocoa market fundamentals reflect supply surplus, hedging program is strong for 2026, with potential upside for 2027 as cocoa finds new equilibrium Q: Quarter gross margin upside detail and brand campaign impetus A: Steven Voskuil detailed 100 basis points gross margin upside from tariffs and volume leverage; Kirk explained Reese's and Hershey's campaigns as part of staying relevant and driving growth with innovation and cultural events Q: 2026 guidance flexibility and salty business outlook A: Kirk and Steven Voskuil discussed momentum in business, strong CMG and salty business performance, and salty business growth driving category share and distribution gains Q: Earnings into 2027 and investment balance A: Kirk and Steven Voskuil talked about external factors improving, balancing growth investments and margin recovery, with details to be unpacked at Investor Day Q: Innovation plans and growth balance A: Kirk said innovation is balanced with core growth, with robust innovation pipeline across sweets, chocolate, and salty, to be shared at Investor Day Q: SNAP impact and cultural event uplift A: Kirk discussed manageable SNAP headwind factored into outlook and cultural events driving top-line robust growth through consumer connection Q: Promotions and advertising balance A: Kirk stated balanced approach of demand creation through advertising and promotion, rational category pricing, and all pricing sold in Q: Segment sales growth and international profit recovery A: Kirk shared organic sales growth by segment and international focus on premium markets, pricing, and portfolio optimization Q: Guidance upside and buybacks A: Steven Voskuil mentioned upside from elasticities, macros, innovation, and productivity, with buybacks to be reintroduced as cash flow allows Q: Price elasticity in international vs US and investment near-term vs long-term A: Kirk explained differences in category structure, affordability, and market positioning leading to elasticity differences; detailed investment balance with near-term and long-term benefits Q: Macro factor forecasting and offense against challenges A: Steven Voskuil discussed challenges in forecasting macros, working with retailers, and offense including affordable pricing and channel focus; Kirk expanded on working with customers for affordable solutions Q: Cocoa hedging and tail brand investment A: Steven Voskuil explained cocoa hedging structure for 2026 and potential for 2027; Kirk discussed world-class portfolio management with focus on all brands, including tail brands, for growth Q: Cocoa impact on 2027 pricing and volume outlook A: Steven Voskuil and Kirk talked about cocoa's impact on 2027 pricing pressure relief and volume recovery plans, to be detailed at Investor Day Q: Volume absorption and pricing rollback concern A: Steven Voskuil mentioned volume impact factored into guide, agility to respond if needed; clarified no pricing rollback, all pricing on track