Navigating Leadership Transitions: Hershey's Opportunity and Wendy's Uncertainty

The confectionery and fast-food industries are bracing for leadership changes that could redefine their trajectories. Kirk Tanner's move from Wendy's to Hershey as CEO on August 18, 2025, marks a pivotal moment. While Hershey gains a seasoned leader to tackle cost pressures, Wendy's faces interim leadership risks that could amplify its operational and market challenges. This article evaluates the strategic implications for both companies and argues for a buy rating on Hershey while advising caution toward Wendy's until a permanent CEO is appointed.

Hershey's Transition: A Strategic Gamble with High Upside

Kirk Tanner's 30-year career at PepsiCo, capped by his role as CEO of PepsiCo Beverages North America, positions him uniquely to navigate Hershey's challenges. His experience in operational scalability, supply chain management, and brand revitalization—key to PepsiCo's success—aligns with Hershey's needs. The company faces rising costs due to tariffs and cocoa price volatility, which have contributed to a 7% decline in EBITDA margins over the past year.

But Hershey's strength lies in its iconic brands—Kit Kat, Reese's, and Hershey's chocolate—commanding 24% of the U.S. chocolate market.

Tanner's track record suggests he can stabilize margins through pricing discipline, supply chain optimization, and geographic diversification. His tenure at Wendy's, though brief, also provided insights into balancing cost control with customer-centric strategies.

Hershey's stock has underperformed peers like Mondelez (MDLZ) and Mars (private) in 2024–2025, reflecting investor anxiety over cost pressures. However, its brand equity and cash flow remain robust, with a 2.5% dividend yield offering a safety net.

Why Buy?
- Brand Resilience: Dominant market share and pricing power in a category with low elasticity.
- Leadership Credibility: Tanner's operational expertise and track record of turning around underperforming divisions.
- Stabilization Potential: Analysts estimate Hershey could reduce cocoa cost exposure by 15% through forward contracts and supplier partnerships.

Wendy's Interim Leadership: Risks of a Fragile Transition

Ken Cook's dual role as CFO and interim CEO raises red flags. His 20-year career at UPS focused on logistics and financial planning, but he lacks consumer-facing leadership experience critical to the fast-food industry. Wendy's stock has already dropped 31% year-to-date, reflecting investor skepticism about its ability to execute on growth plans under interim leadership.

The governance shift—replacing Matthew Peltz with his brother Bradley, who retains ties to a franchisee generating $7.6M in royalties—adds to concerns about independent oversight. Meanwhile, the search for a permanent CEO remains undefined, leaving strategic initiatives like global expansion and digital transformation in limbo.

Wendy's sales growth has lagged behind McDonald's (MCD) and Burger King (BKW) for three consecutive quarters, with same-store sales declining by 2% in Q1 2025.

Key Risks:
- Strategic Drift: Cook's financial background may prioritize cost-cutting over innovation, undermining growth initiatives.
- Governance Concerns: Peltz family influence could delay necessary reforms in operational efficiency and supply chain management.
- Leadership Vacuum: The interim period risks losing top talent and customer trust, compounding existing issues like slow digital adoption and inconsistent global execution.

Market Resilience and Investment Outlook

Hershey's brand strength and Tanner's leadership provide a solid foundation to weather near-term cost pressures. The company's ability to maintain pricing power in a mature market and expand into emerging economies (e.g., Asia-Pacific) offers long-term growth. Meanwhile, Wendy's requires a CEO with deep consumer-facing expertise and a clear turnaround plan—qualities absent under Cook's interim leadership.

While cocoa prices remain elevated, Hershey's margin resilience is supported by hedging strategies and premium pricing.

Investment Thesis:
- Hershey (HER): Buy with a 12–18 month horizon. Target price: $240 (based on 20x 2026E EPS estimates). Risks include geopolitical disruptions to cocoa supplies.
- Wendy's (WEN): Hold until a permanent CEO is named. Avoid adding new positions until governance and strategy clarity improve.

Conclusion

Leadership transitions are high-stakes moments for consumer companies. Hershey's move to bring in a proven operator like Tanner, paired with its fortress-like brand portfolio, justifies optimism. For Wendy's, the interim period introduces operational and governance risks that could prolong underperformance. Investors should prioritize Hershey's long-term potential while remaining cautious on Wendy's until decisive leadership is in place.

In markets defined by brand loyalty and operational precision, the next 12 months will test both companies' resilience—and investors' patience.

Analysis as of July 7, 2025.