Hershey's Chocolate Sales Rise on Pricing: Can Volumes Recover?

The Hershey Company HSY continues to demonstrate pricing power in its core chocolate business, though the company’s recent performance highlights a growing divergence between price-led sales gains and underlying volume trends.

In the fourth quarter of 2025, North America Confectionery sales increased 5.3% to $2.48 billion, supported primarily by nearly 10 points of pricing contribution. However, volumes declined about 5 points, reflecting the impact of higher prices on consumer demand. At the consolidated level, organic constant-currency sales rose 5.7%, driven by around 9% pricing, while overall volume and mix fell 3%. This dynamic underscores that recent growth has been largely price-driven rather than demand-led.

The pressure on volumes stems from elasticity effects following successive price increases related to elevated cocoa costs. While elasticity trends have so far been more favorable than initially anticipated, volume softness remains evident across both domestic confectionery and international markets. Pricing actions taken in 2025 are still being absorbed, with some price-pack adjustments and retail resets continuing to flow through.

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The Hershey Company expects approximately 3% organic sales growth in its confectionery segment in 2025. This outlook suggests pricing could remain an important contributor. At the same time, there is a clear shift in focus toward rebuilding volume. The current phase reflects a transition period where prior pricing actions are being processed before a more balanced mix of price and volume can emerge.

The recent quarter indicates that while HSY has successfully offset cost pressures through pricing, sustained growth will increasingly depend on its ability to restore unit demand. Until that inflection materializes, the chocolate business remains in a price-led growth cycle, with volumes yet to fully recover.

The Zacks Rank #3 (Hold) stock has gained 12% in the past three months compared with the industry’s growth of 10.9%.

Stocks to Consider

Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1 (Strong Buy). Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures.

Hormel Foods Corporation HRL develops, processes and distributes various meat, nuts and other food products to foodservice, convenience store, and commercial customers in the United States and internationally. It carries a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Hormel Foods’ current financial-year sales and earnings indicates growth of 1.4% and 4.4%, respectively, from the prior-year reported levels. HRL delivered a positive earnings surprise consecutively in the past two quarters.

US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. US Foods Holding delivered a trailing four-quarter earnings surprise of 2.2%, on average.

The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings calls for growth of 5.4% and 20.9%, respectively, from the year-ago figures.

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