Hershey beat expectations in Q3 2025 with US$3.18B in revenue
This earnings strength was attributed to strategic pricing, product innovation, and focused brand investments despite rising commodity costs and tariff expenses.
USA – The Hershey Company has reported its third-quarter 2025 financial results, showcasing strong top-line growth and better-than-expected earnings, despite facing significant cost headwinds.
For the quarter ending September 28, the company posted net sales of US$3.18 billion, representing a 6.5% increase year-over-year, driven largely by strong demand across its product portfolio, including new innovations like the Reese’s Oreo collaboration and zero sugar offerings.
Earnings per share (EPS) came in at US$1.30, beating forecasts of US$1.09, though down from US$2.34 in Q3 2024.
This earnings strength was attributed to strategic pricing, product innovation, and focused brand investments despite rising commodity costs and tariff expenses.
However, adjusted gross margin declined by 850 basis points to 31.8%, reflecting inflationary pressures on production inputs and supply chain challenges.
Net income for the quarter was US$276.3 million, down 38.2% compared to the previous year, impacted by higher costs squeezing profit margins.
Despite this, Hershey’s CEO Kirk Tanner expressed optimism, highlighting the company’s strong execution and momentum in key business segments.
Tanner emphasized that the company’s transformation programs and innovation pipeline are on track, paving the way for future growth.
Following the strong quarter, Hershey raised its full-year net sales growth outlook to approximately 3% but warned that adjusted earnings per share might decline by 36-37% due to ongoing cost inflation.
The company plans continued investments in technology, sustainability, and supply chain agility to enhance efficiency and meet evolving consumer trends.
However, the upbeat earnings were tempered by rising costs. Hershey reported US$160–170 million in tariff-related expenses, some of which were passed on to customers through price increases.
These pressures, along with elevated cocoa costs and brand spending, contributed to margin compression and investor caution.
Despite the earnings beat, Hershey’s stock dipped 2.76% to US$175.28 post-announcement and continued to fall in pre-market trading.
Analysts attributed the decline to concerns over future profitability and cost inflation, even as revenue growth remains robust.
Hershey’s Q3 2025 results showcased strong top-line growth and better-than-expected earnings, offset by significant margin pressures.
The company’s focus on innovation, cost management, and customer engagement aims to strengthen its market position while navigating economic headwinds in the confectionery sector.
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