Hershey reported first-quarter results that topped Wall Street expectations, driven by stronger pricing and demand for its snack portfolio that helped mitigate the impact of rising commodity and tariff costs.
For the quarter ended March 29, the company said quarterly net sales were $3.10 billion, versus the $3.03 billion analysts had expected, based on data compiled by LSEG. Adjusted earnings per share for the period came in at $2.35, ahead of the $2.04 consensus.
Hershey cited a mix of higher selling prices and favorable volume trends in its salty snacks business as key contributors to the better-than-expected top-line performance. Organic volumes in the North America salty snacks segment rose 5% in the quarter. The company’s acquisition last year of the LesserEvil brand - known for popcorn and snacks that avoid seed oils - contributed meaningfully to that segment’s performance, lifting growth by about 20 percentage points for the reported quarter.
At the same time, the North America confectionary segment saw a 4% decline in volumes. Hershey has raised prices on confectionary products over recent years as a response to elevated cocoa costs. The company reported that overall organic price increased 10% in the quarter, following a 6% increase in the preceding three-month period.
Despite the revenue and earnings beat, Hershey’s adjusted gross margin for the first quarter fell 80 basis points from the prior year, reflecting higher commodity and tariff-related costs. Management said pricing actions have helped cushion margins, and the company reiterated its full-year guidance calling for 4% to 5% net sales growth and a 30% to 35% increase in adjusted earnings per share.
CEO Steve Voskuil said the forecast incorporates prudent assumptions about a range of macro headwinds. Those include potential changes to the food stamps program, a continued shift toward healthier snacking, and financial pressure on consumers stemming from the conflict in the Middle East.
Hershey is among snack makers investing in marketing and product innovation targeted at health-conscious shoppers. The company has emphasized cleaner-ingredient products as it seeks to attract consumers amid the U.S. administration’s push to "Make America Healthy Again" and wider adoption of appetite-suppressing GLP-1 drugs.
Observers noted that lower-income households have been reassessing budgets as higher fuel costs and uncertainty related to the war in Iran put pressure on discretionary spending. Commodity-market dynamics also remain a concern for chocolate makers: while cocoa prices have retreated from a 2025 peak, the conflict in the Middle East has heightened worries about renewed price spikes as farmers in key cocoa-producing countries face challenges securing fertilizers.
The quarter’s results mirrored a broader industry trend. Rival Mondelez International, which produces Toblerone among other brands, also surpassed quarterly estimates earlier in the week, aided by higher selling prices.
Context and implications
- Hershey’s pricing strategy contributed materially to revenue and EPS beats even as volumes diverged between salty snacks and confectionary.
- Margin compression from commodity and tariff costs remains a headwind despite management’s confidence in pricing to partially offset those pressures.
- Macro factors including consumer-budget sensitivity, geopolitical uncertainty, and shifts toward healthier snacking are explicitly incorporated into management’s outlook.
The results highlight the balancing act facing consumer staples firms that are navigating cost inflation, changing consumer preferences, and geopolitical risk while attempting to preserve growth and profitability.