The Hershey Company (NYSE:HSY) shares are trading slightly lower in the premarket session on Thursday.
The company reported third-quarter adjusted earnings per share of $1.30 (down 44.4%), beating the analyst consensus estimate of $1.07. Quarterly sales of $3.181 billion (+6.5% year over year) outpaced the Street view of $3.113 billion.
Organic, constant-currency net sales increased 6.2%, driven by net price realization of approximately 6 points.
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Segments
Hershey’s North America Confectionery segment net sales were $2.615 billion in the third quarter, an increase of 5.6% year over year.
Hershey’s North America Salty Snacks segment net sales were $321.0 million, up 10%.
Third-quarter net sales for Hershey’s International segment increased 12.1% year over year to $244.8 million.
“Third quarter results surpassed expectations, as strong innovation, strategic brand investments, and market leading execution drove momentum across business segments,” said Kirk Tanner, Hershey Company president and CEO.
Volume & Margins
The company said volume was slightly positive in the quarter, reflecting the cadence of programming in North America, Salty Snacks, and the timing of shipments in the International segment.
Adjusted gross margin fell to 31.8% in the third quarter, down 850 basis points from a year ago, as higher commodity and tariff costs and an unfavorable mix more than offset net pricing, supply-chain productivity, and transformation program savings.
Quarterly adjusted operating profit of $422.5 million decreased 35.4% versus the third quarter of 2024. The adjusted operating profit margin of 13.3% declined 860 basis points.
The Hershey Company exited the quarter with cash and equivalents worth $1.163 billion. Inventories totaled $1.707 billion.
Dividend
The firm announced quarterly dividends of $1.370 per share on the Common Stock and $1.245 per share on the Class B Common Stock. The dividends were declared on October 29 and are payable on December 15.
Outlook
Hershey raised its fiscal 2025 adjusted EPS outlook to $5.90 to $6.00, up from $5.81 to $6.00 and above the $5.96 consensus. It now expects sales of about $11.538 billion, topping the $11.505 billion estimate.
The company also expects tariff expense, based on current assumptions, to total roughly $160 million to $170 million.
Price Action: HSY shares are trading lower by 1.30% to $173 premarket at last check on Thursday.
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