The Hershey Company reported fourth‑quarter 2025 results that surpassed expectations, with net sales rising 7% to $3.09 billion and adjusted earnings per share of $1.71, a $0.31 beat over the $1.40 consensus estimate. Gross margin contracted to 37.0% from 39.0% in the prior year, while operating profit held steady at $444.9 million, underscoring the company’s ability to manage cost pressures while maintaining profitability.
Segment performance drove the revenue growth. North America Salty Snacks sales jumped 28% year‑over‑year, propelled by the acquisition of LesserEvil and new product launches, while North America Confectionery sales increased 5.3% and International sales grew 0.4%. The mix shift toward higher‑margin snack products helped offset the impact of commodity and tariff costs on the overall margin profile.
Gross margin compression was largely a result of higher commodity inflation—particularly cocoa—incremental tariff expenses of roughly $30 million, and lower volume. Adjusted gross margin fell 650 basis points to 38.3% from 39.0% in the prior year, reflecting the combined effect of input cost increases and a less favorable product mix. Despite the margin squeeze, operating profit remained robust, indicating effective cost control and pricing power in key segments.
Looking ahead, management guided 2026 net sales growth of 4%–5% and adjusted EPS growth of 30%–35%, a significant upside to analyst expectations. The optimistic outlook signals confidence that the company’s snacking transformation, cost‑saving initiatives, and anticipated decline in cocoa prices will translate into stronger profitability in the coming year.
CEO Kirk Tanner emphasized the company’s momentum, stating, “We have strong conviction in the momentum of our business. Our teams have navigated a challenging environment with operational excellence, impactful innovation, and skillful execution that is driving real results.” These remarks reinforce the company’s belief that it can sustain top‑line growth while recovering margins as commodity costs normalize.
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