$HSY (+0.2%) | Hershey Q3 '24 Earnings Highlights:

🔹 Adj EPS: $2.34 (Est. $2.56) 🔴; DOWN -10.0% YoY

🔹 Revenue: $2.99B (Est. $3.07B) 🔴; DOWN -1.4% YoY

🔹 Net Income: $446.3M; DOWN -12.7% YoY

🔹 Gross Margin: 40.3%, DOWN 460 bps YoY

🔹 Operating Profit: $654.0M; DOWN -13.2% YoY; Margin 21.9%, DOWN 300 bps YoY

🔹 Effective Tax Rate: 15.2%, DOWN 520 bps YoY

FY Guidance:

🔹 FY Adjusted EPS: $9.00-$9.10 (Prev. $9.49-$9.59) 🔴

🔹 FY Net Sales Growth: Flat (Prev. ~2%) 🔴

🔹 FY Adjusted EPS Growth: Down mid-single digits (Prev. Down slightly) 🔴

🔹 Capital Expenditures: $575M-$600M

🔹 Interest Expense: Approx. $170M

Q3 SEGMENTS:

North America Confectionery:

🔹 Net Sales: $2.48B; UP +0.8% YoY

🔹 Organic Sales Growth: +0.9% YoY

🔹 Segment Income: $724.8M; DOWN -14.5% YoY

🔹 Segment Margin: 29.3%, DOWN 520 bps YoY

🔸 Driven by price realization and inventory timing benefits, offset by volume declines

North America Salty Snacks:

🔹 Net Sales: $291.8M; DOWN -15.5% YoY

🔹 Segment Income: $54.0M; DOWN -5.9% YoY

🔹 Segment Margin: 18.5%, UP 190 bps YoY

🔸 Volume declines due to prior year inventory timing and shipment delays, with growth in Dot’s Pretzels sales offsetting some declines

International Segment:

🔹 Net Sales: $218.4M; DOWN -3.9% YoY

🔹 Organic Sales Growth: +0.2% YoY

🔹 Segment Income: $14.2M; DOWN $17.5M YoY

🔹 Segment Margin: 6.5%, DOWN 740 bps YoY

🔸 Competitive pressures in Brazil and soft markets in Mexico, partially offset by growth in Europe

Operational Highlights:

🔸 Margin pressure driven by higher commodity costs and unfavorable input timing; mitigated by productivity gains

🔸 Cost-saving initiatives (Agility & Automation) expected to deliver approx. $100M in savings

🔸 Reduced advertising in North America Confectionery; increased marketing in Salty Snacks and International segments