Despite the challenging quarter, the confectionery giant reaffirmed its full-year outlook and emphasized progress in strategic initiatives.
The company has also warned that the 'unmitigated' impact of tariffs may cost up to $100 million per quarter and was already working to reduce any impact by negotiating with the White House.
Live Q&A
In a live question-and-answer session with investors and financial analysts on Thursday, outgoing chief executive Michele Buck said: "We're going to use, aside from the lobbying and the influencing and so forth, really, every lever in the toolbox for whatever amount of tariffs remain as we go forward in the back half of the year."
Anthony Myers
The company said it is working to ease the impact of tariffs by improving productivity, pricing, sourcing and manufacturing.
‘No-regrets actions’
"Cocoa cannot be grown in the United States, and thus, we are engaging with the US government to seek an exemption," Buck said. "We are developing robust mitigation plans for other raw-material and finished-goods exposures, with several no-regrets actions already underway."
Net sales
Hershey’s net sales for Q1 2025 fell 13.8% to $2.81 billion, while adjusted earnings per share dropped 31.9% to $2.09. Reported EPS declined 71.7% to $1.10.
“Consumption exceeded expectations across U.S. candy, mint, gum, and salty snacks,” said Buck. “We remain focused on long-term value creation through investments and strategic acquisitions, even amid heightened cost pressures.”
Segment Results
North America Confectionery: Sales dropped 15% to $2.3 billion, due to the timing of Easter and the lapping of prior-year inventory builds. Segment income fell nearly 27%.
North America Salty Snacks: Sales rose 1% to $277.8 million, with strong performances from SkinnyPop and Dot’s Pretzels. Segment income grew 8.1%.
International: Sales declined 15.9% to $227.5 million, with an 8% volume drop and continued foreign exchange headwinds. Segment income decreased by over $14 million.
Gross margins
Gross margins came under pressure, falling to 33.7% from 51.5% a year ago. Hershey attributed this to commodity cost inflation, unfavourable sales mix, and mark-to-market losses on commodity derivatives.
2025 Outlook
The company maintained its full-year guidance, including:
Net sales growth: At least 2%
Reported EPS: $5.55 to $5.87 (down high-40% range)
The outlook includes $15–$20 million in expected Q2 tariff expenses but does not factor in future trade policy changes or the impact of Hershey’s proposed acquisition of LesserEvil.
Other 2025 forecasts include:
Capital expenditures: $425 million–$450 million
Interest expense: $185 million–$190 million
Expected savings: $125 million from its ongoing Agility & Automation initiative
Tough quarter
Despite a tough quarter, Hershey expressed confidence in its growth strategy, supported by brand strength and innovation in its ‘better-for-you’ product portfolio.
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