Hershey’s latest quarter saw revenue and non-GAAP profit surpass Wall Street’s expectations, yet the market responded negatively amid concerns over falling operating margins. Management attributed top-line momentum to balanced growth across both core and new product lines, with CEO Kirk Tanner highlighting double-digit increases in everyday chocolate, mint, and gum (CMG) and strong performance in the salty snacks segment. Despite this, leadership acknowledged challenges in the seasonal business—especially Halloween—due to timing, weather, and shifting consumer behavior. CFO Steven Voskuil addressed the margin compression, noting that higher cocoa prices and increased brand investments weighed on profitability, even as recent innovation, such as the REESE'S Oreo launch, contributed meaningfully to growth.
Is now the time to buy HSY? Find out in our full research report (it’s free for active Edge members).
Hershey (HSY) Q3 CY2025 Highlights:
- Revenue: $3.18 billion vs analyst estimates of $3.11 billion (6.5% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1.30 vs analyst estimates of $1.06 (22.2% beat)
- Adjusted EBITDA: $550.3 million vs analyst estimates of $502.4 million (17.3% margin, 9.5% beat)
- Adjusted EPS guidance for the full year is $5.95 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 13.7%, down from 20.5% in the same quarter last year
- Organic Revenue rose 6.2% year on year vs analyst estimates of 4% growth (224 basis point beat)
- Market Capitalization: $34.45 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Hershey’s Q3 Earnings Call
- Andrew Lazar (Barclays): Probed the potential for earnings recovery in 2026 given moderating cocoa costs and ongoing pricing actions. CEO Kirk Tanner described the approach as gradual, emphasizing margin restoration over multiple years while remaining focused on category growth.
- Max Gumport (BNP Paribas): Asked for clarity on elasticity trends in the everyday business. CFO Steven Voskuil reported current elasticity is tracking within expectations, with no signs of significant consumer pushback so far.
- David Palmer (Evercore ISI): Inquired about Halloween performance and how the company is adapting. Tanner acknowledged the season was soft but outlined plans to refine pack sizes and marketing based on consumer insights.
- Leah Jordan (Goldman Sachs): Sought details on innovation strategy for 2026 and beyond. Tanner noted a strong pipeline and stressed the importance of balancing core brand growth with new product launches.
- Peter Galbo (Bank of America): Questioned international profitability and competitive pricing dynamics. Voskuil explained that international markets face greater cocoa-driven cost pressure, but that aggressive pricing and premium positioning should support eventual recovery.
Catalysts in Upcoming Quarters
In the quarters ahead, key developments to watch will be (1) the pace of margin recovery as cocoa costs and tariff impacts evolve, (2) consumer response to further price increases and new product launches, and (3) continued growth and profitability in the salty snacks portfolio. Execution in the convenience channel and seasonal sales recovery will also be important markers of progress.
Hershey currently trades at $170, down from $175.48 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
