The Hershey Co (HSY, Financial) released its 8-K filing on February 6, 2025, reporting impressive financial results for the fourth quarter and full year of 2024. The company, a leading U.S. confectionery manufacturer with a significant market presence, showcased its ability to navigate challenges and capitalize on opportunities in the consumer packaged goods industry.
Company Overview
Hershey, a dominant player in the U.S. confectionery market, controls approximately 36% of the domestic chocolate space. With a diverse portfolio of over 100 brands, including Reese's, Kit Kat, and Ice Breakers, Hershey's products are available in about 80 countries. The company has expanded beyond its core confectionery business through strategic acquisitions like Amplify Snack Brands and Dot's Pretzels.
Fourth-Quarter 2024 Financial Performance
In the fourth quarter of 2024, The Hershey Co (HSY, Financial) reported consolidated net sales of $2,887.5 million, marking an 8.7% increase compared to the previous year. This growth was driven by a 9.0% rise in organic, constant currency net sales. The company achieved a reported net income of $796.6 million, or $3.92 per diluted share, a significant 130.6% increase. Adjusted earnings per share-diluted stood at $2.69, surpassing the analyst estimate of $2.19 and reflecting a 33.2% increase.
Full-Year 2024 Financial Highlights
For the full year 2024, Hershey's consolidated net sales reached $11,202.3 million, a modest 0.3% increase. The reported net income was $2,221.2 million, or $10.92 per diluted share, up by 20.5%. However, the adjusted earnings per share-diluted decreased by 2.3% to $9.37, above the annual estimate of $8.99.
Key Financial Metrics and Achievements
The company's gross margin for Q4 2024 increased by 1170 basis points to 54.0%, driven by derivative mark-to-market gains and supply chain productivity. The adjusted gross margin rose by 60 basis points to 44.8%. Operating profit surged by 102.3% to $939.1 million, with an operating profit margin of 32.5%, primarily due to derivative gains.
Segment Performance
Hershey's North America Confectionery segment saw a 6.0% increase in net sales, driven by price realization and volume growth. The North America Salty Snacks segment experienced a remarkable 35.9% sales increase, attributed to inventory timing benefits and promotional events. International sales grew by 9.8%, with strong performance in Mexico and EMEA regions.
Challenges and Outlook
Despite the strong performance, Hershey anticipates challenges in 2025 due to rising cocoa prices and higher commodity costs. The company projects a decline in reported earnings per share in the high-40% range, with adjusted earnings per share expected to decrease in the mid-30% range. Hershey plans to focus on price realization, productivity programs, and strategic initiatives to mitigate these challenges.
I am pleased to see the consumer response to our agile innovation, marketing and in-store execution as we end the year with momentum across our segments," said Michele Buck, The Hershey Company President and Chief Executive Officer.
Conclusion
The Hershey Co (HSY, Financial) demonstrated resilience and strategic agility in 2024, achieving robust sales growth and exceeding analyst expectations. While challenges loom in 2025, the company's focus on innovation and operational efficiency positions it well for long-term success in the competitive consumer packaged goods industry.
Explore the complete 8-K earnings release (here) from The Hershey Co for further details.
