The Hershey 2025 Q2 Earnings Profits Plunge 65% Amid Rising Costs

The Hershey (HSY) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. The company posted a 26.0% increase in total revenue, reaching $2.61 billion, up from $2.07 billion in the same quarter of 2024. However, net income declined to $62.72 million, a 65.3% decrease from $180.89 million in the previous year. Despite the revenue growth, Hershey's earnings per share (EPS) fell short of market expectations. The company adjusted its full-year guidance, projecting a decline in both reported and adjusted EPS, reflecting ongoing cost challenges.

Revenue

Overall, The Hershey Company saw a 26.0% rise in total revenue, reaching $2.61 billion in Q2 2025 compared to $2.07 billion in Q2 2024. Revenue from the North America Confectionery segment contributed $2.09 billion, while the North America Salty Snacks segment added $315.52 million, bringing the combined revenue from these segments to $2.40 billion.

Earnings/Net Income

The Hershey's earnings per share (EPS) experienced a significant decline of 65.2%, dropping to $0.32 in Q2 2025 from $0.92 in Q2 2024. The company's net income also fell sharply, decreasing by 65.3% to $62.72 million from $180.89 million in the same quarter last year. The EPS performance reflects substantial challenges in sustaining profitability.

Post-Earnings Price Action Review

The strategy of investing in Hershey (HSY) shares post-revenue gain on quarterly financial report days, with a holding period of 30 days, has historically offered moderate returns but has not kept pace with market benchmarks. Although the strategy demonstrated a compound annual growth rate (CAGR) of 5.95%, it lagged the market by 81.43 percentage points. Despite the absence of drawdowns and a conservative Sharpe ratio of 0.27, the investment approach carried minimal risk. It is therefore positioned as a strategy for investors prioritizing stability over aggressive growth. However, given its underperformance relative to the market, the strategy underscores the importance of aligning investment choices with broader market dynamics.

CEO Commentary

Michele Buck, President and Chief Executive Officer of The Hershey Company, expressed satisfaction with the second-quarter results, highlighting the momentum in the business driven by brand investments and innovation. She noted that effective execution has led to solid sales and market share gains in both the U.S. confectionery and salty snacking sectors. Looking forward, she emphasized a commitment to balanced growth and strategic initiatives to manage cocoa inflation through pricing strategies, enhanced productivity, and technology-driven efficiencies.

Guidance

The Hershey Company updated its full-year guidance, projecting net sales growth of at least 2%. Reported earnings per share are anticipated to decline in the high-40% range, while adjusted earnings per share are expected to decrease by 36% to 38%. The company expects tariff expenses for the year to be approximately $170 to $180 million, with an effective tax rate of around 27%. Additionally, capital expenditures are estimated at $425 million to $450 million, and savings from the Agility & Automation Initiative are anticipated to rise to approximately $150 million.

Additional News

In recent news, Hershey announced a key leadership change with Kirk Tanner appointed as President and Chief Executive Officer, effective August 18, 2025. The company also declared quarterly dividends, reflecting its commitment to shareholder returns. Meanwhile, Hershey remains focused on mitigating the impact of cocoa tariffs, employing various strategies to manage these costs. This includes leveraging pricing adjustments and operational efficiencies to navigate the ongoing challenges posed by tariffs and commodity price fluctuations.