好时食品集团(HSY.US)2025年第四季度业绩电话会

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会议摘要

Hershey forecasts 4-5% net sales growth and earnings recovery in 2026, driven by innovation, marketing, and cocoa hedging. Plans include doubling down on big brands, expanding into premium international markets, and navigating macroeconomic risks with built-in flexibility. The company invites investors to an upcoming event for deeper insights into its long-term strategy.

会议速览

Hershey Company Q4 2025 Earnings Call: Guidance on Forward-Looking Statements and Non-GAAP Measures

The Hershey Company's Q4 2025 earnings call outlines procedures for joining the Q&A, highlights the importance of reviewing press releases and management remarks, and clarifies the use of forward-looking statements and non-GAAP financial measures, directing participants to SEC filings for detailed risk disclosures.

Hershey's Leadership Discusses Resilient Portfolio and Growth Strategies for 2026

Hershey's CEO outlines company's achievements in 2025, resilience against market challenges, and plans for 4-5% net sales growth and investment in innovation for 2026.

Morning Greetings Exchange

A casual exchange of morning greetings among participants, reflecting a positive start to the day.

Navigating Cocoa Price Deflation and Elasticity in Snack Industry

Discussion revolves around managing cocoa price drops, maintaining pricing strategies for consumer affordability, and the favorable elasticity outcomes. The snack industry is adapting by focusing on marketing, innovation, and strategic pricing to sustain growth and consumer engagement amidst fluctuating commodity costs.

Short: Gratitude and Farewell Until March; Normal: Expressing Thanks and Planning Reunion in March; Long: A Dialogue Capturing Appreciation and Anticipation for Future Meeting in March

The conversation revolves around expressing gratitude and setting a future meeting in March, highlighting appreciation and anticipation for the upcoming reunion.

Cocoa Price Decline: Its Impact on Margins and Future Outlook

Discussed cocoa price trends and hedging strategies, emphasizing the potential for margin recovery in 2027 due to market volatility and anticipated price equilibrium above historical levels.

Sustainability of Brand Investments: Planning for 2026 and Beyond

The dialogue discusses the strategic brand investments for 2026, emphasizing their long-term impact, and outlines plans for continued growth and margin recovery in 2027, highlighting the balance between immediate results and future foundation-building.

Analysis of Gross Margin Upside and Marketing Strategies for Hershey and Reese's

A discussion unfolds on the unexpected rise in gross margin, attributed largely to tariff adjustments and favorable volume leverage. The conversation transitions to a strategic marketing initiative, highlighting a synchronized campaign for Hershey and Reese's, emphasizing brand connection and innovation, set against the backdrop of a celebratory movie release.

Navigating Growth with Strategic Flexibility Amid Tariffs and Market Dynamics

The dialogue highlights strategic planning and flexibility in achieving earnings growth despite challenges from tariffs and macroeconomic conditions. Key points include strong portfolio momentum, innovation investments, and confidence in operating plans. The company addresses competitive pressures and affordability concerns with a focus on customer-driven growth and innovation, maintaining a balanced view of controllable and uncontrollable factors.

Investment Priorities and Growth Strategies for Future Earnings in the Cocoa Industry

The dialogue discusses balancing margin recovery with investments for long-term growth, monitoring macroeconomic impacts, and planning for future earnings in the cocoa sector. It highlights upcoming investor day details, emphasizing portfolio investments, strategic growth activations, and shareholder returns for the next generation of growth.

Innovation Plans, Timing, and Growth Focus for the Coming Year

The dialogue explores the company's innovation and activation strategies, emphasizing the timing of these initiatives and the balance between innovation growth and core business development in the upcoming year.

Innovation and Investment Drive Growth: A Focus on Hershey's and Reeses

The dialogue highlights the importance of innovation and investment in driving growth, specifically discussing successful innovations like Ree and upcoming product launches across the sweets and chocolate portfolio. It also emphasizes the company's commitment to maintaining a robust pipeline of innovations extending through 2027, supported by continued investments in R&D. The conversation concludes with anticipation for future investor day updates and a discussion on gross margin trends for the year.

Q1 Momentum with Q2 Margin Inflection and Double-Digit EPS Growth Outlook

Q1 expected to carry top line momentum, but margins and earnings pressured by higher costs and tariffs. Q2 to see a margin inflection, with double-digit EPS growth anticipated for the remainder of the year, despite tougher comparisons in the second half. Brand investment is planned to increase significantly across quarters.

Navigating Growth in Chocolate and Snack Categories Amidst Pricing Cycles

Discusses strategies for sustaining chocolate and salty snack growth despite pricing challenges, emphasizing functional and emotional branding, health trends, and premiumization. Highlights successful reinvention of categories through consumer-relevant innovations and upcoming investor day insights on long-term growth plans.

European vs. US Chocolate Market: Consumer Behavior and Brand Differentiation

The dialogue explores the differences between European and US chocolate markets, focusing on consumer behavior, brand differentiation, and affordability. European markets show a concentration of chocolate tablet bars and private labels, contrasting with the US, which features more brand differentiation and premium products. Affordability remains a key factor, with a significant portion of the portfolio priced under $4, ensuring accessibility to consumers.

Navigating SNAP Waiver Impacts and Boosting Engagement Through Cultural Moments

Discusses the impact of SNAP waivers on the portfolio, emphasizing early insights and manageable headwinds. Highlights strategies for enhancing engagement through cultural events, showcasing brand alignment with significant moments to drive year-round activity and growth.

Balancing Promotions and Marketing Investments for Brand Growth

Discusses strategic allocation between promotions and marketing to enhance brand visibility and consumer engagement, emphasizing rational pricing and planned advertising investments for top-line growth.

International Market Strategy & Profit Recovery Amid Pricing Adjustments

Discussed sales growth expectations for segments including confection, salty snacks, and international, highlighting double-digit EBIT improvements. Addressed profit recovery in international markets through strategic pricing, focusing on premium and cocoa-intensive products. Emphasized market share gains and future investment strategies in key regions, with detailed plans to be unveiled in March.

Strategies for Capital Allocation, Investment Growth, and Buyback Plans

The dialogue covers potential upside scenarios in guidance, emphasizing elasticities, innovation media, and productivity goals. It outlines a strategic shift in capital allocation towards normalcy, focusing on funding the business, investing in organic growth, and maintaining agility for inorganic opportunities. The discussion highlights the importance of buybacks as part of a balanced capital strategy, driven by strong cash flow and prudent investment. Investments are portrayed as having immediate and long-term benefits, aimed at driving sustainable growth, modernizing the portfolio, and staying relevant to consumers.

Price Elasticity Trends: US vs International Markets

Discusses price elasticity differences between US and international markets, highlighting US category uniqueness, affordability, and portfolio differentiation versus premium positioning and limited scale in international markets.

Investment in Growth and Efficiency for Future Leverage

Discusses strategic investments in marketing and operations, emphasizing efficiency and productivity to drive future growth and leverage, aiming for margin recovery while fueling demand creation and fulfillment.

Navigating Macro Factors and Retail Strategies for Forecasting Accuracy

A discussion on forecasting challenges due to federal and state macro factors, emphasizing the importance of retailer collaboration and strategic planning to mitigate impacts and optimize portfolio performance.

Cocoa Cost Hedging & Portfolio Management Strategies

Discussed cocoa cost hedging strategies ensuring costs align with market trends, emphasizing flexible hedging structures. Explored portfolio management focusing on both large and small brands, aiming to leverage growth opportunities and convert smaller brands into billion-dollar successes through targeted investments and non-working media support.

Cocoa Market Strategies and Volume Growth Outlook

Discussion on hedging cocoa prices for 2027, emphasizing non-price strategies for value creation and targeting a balanced mix of price and volume growth in the coming years.

Investing in Protein Portfolio: Organic Growth and Acquisition Opportunities

The dialogue discusses the company's strategy to invest in its protein business, emphasizing organic growth through innovation and brand development. It also considers the potential for acquisitions to expand the protein portfolio, drawing parallels to Hershey's approach in building a salty snack portfolio. The focus is on balancing current brand growth with future opportunities in the protein space.

Pricing Strategy and Volume Impact Management in 2026 Outlook

The dialogue discusses the company's strategy regarding pricing increases and their impact on volume, emphasizing readiness to adjust marketing and promotional efforts to mitigate potential declines. It clarifies that all announced price hikes are on track and there have been no rollbacks, maintaining the planned 10% pricing increase for 2026.

要点回答

Q：What are the expectations for net sales growth and earnings recovery mentioned in the speech?

A：The company expects 4 to 5% net sales growth and meaningful earnings recovery.

Q：What is the Hershey Company's position on pricing in response to recent cocoa commodity price declines?

A：The Hershey Company does not take pricing lightly and has been patient, playing the long game. They have anchored their actions in consumer insights and ensuring their brands remain affordable and accessible. The pricing from 2025 does not cover 2026 cocoa cost inflation and they are on a recovery path while also focusing on investments in marketing, innovation, and R&D.

Q：How does the company plan for pricing flexibility and what is their view on elasticity in the market?

A：The company is cautious and has planned for potential elasticity fluctuations by accounting for them in their guidance. They aim to do better than the current plan, especially with their strong activation calendar and investments. Elasticities are not static and can change over time, but they are currently experiencing favorable outcomes and continue to plan for around 0.8% while expecting further adjustments as prices and channels continue to evolve.

Q：What is the perspective on gross margin expectations and historical levels?

A：While 2026 is anticipated to show a recovery in gross margins to around 41% from 2025, it is still below historical levels. The company is optimistic about the future due to expectations of a larger supply surplus and a new equilibrium price for cocoa that is likely to be above historic levels. The hedging program is in a great shape for 2026, being hedged above current market levels, and suggests there could be further deflation in 2027.

Q：How should investors think about the durability of increased brand investments and the potential for further reinvestment in 2027?

A：Investors should consider that the investments made in 2026 are not only for the current year but will lay a foundation for future growth as well. These investments include scaling investments in R&D and innovation, brand building, retail sales team, and technology. They focus on delivering growth in the present while building a multi-year foundation. For 2027, the focus will continue to be on driving growth and margin recovery. The company will detail these plans at their investor conference in March.

Q：What was the biggest positive factor contributing to the company's performance in the quarter mentioned?

A：The biggest positive factor contributing to the company's performance in the quarter was the tariffs on the company's products and the支付的关税比预计要少，这对公司利润产生了一个积极的影响。

Q：Why is it notable that Hershey and Reese's are launching a new campaign after eight years?

A：It is notable that Hershey and Reese's are launching a new campaign after eight years because it signifies a significant investment in these major brands to keep them relevant and to fuel future growth.

Q：What are the significant components of the investment in the upcoming year for these brands?

A：The significant components of the investment in the upcoming year for Hershey and Reese's include innovation on both brands, a new movie celebrating Milton Hershey, and a full year of marketing plans which are designed to build on the brands' connection and love among consumers.

Q：How does the company expect the top line and earnings to be affected by the current business momentum and portfolio strength?

A：The company expects the top line and earnings to be positively affected by the current business momentum and portfolio strength. This is due to the real strength in theCMG business, fundamental investments in brands and innovation, tailwinds in the company's salty portfolio leading to 18% organic growth in the last quarter, and the combined health of the salty and sweet portfolio giving confidence to deliver on the top line which in turn helps earnings.

Q：What is the company's outlook on potential upside due to better data on elasticity and macro headwinds?

A：The company's outlook on potential upside is optimistic as they have a better view on elasticity due to new data, and they feel good about the balanced outlook they've established. The macro headwinds are also being closely watched, and the company believes they have a prudent outlook on these factors.

Q：What is the company's strategy regarding the potential effects of lower cocoa prices in the upcoming year?

A：The company's strategy in light of potential lower cocoa prices involves continued monitoring of the situation as cocoa prices have been volatile and haven't found a new normal. The company is focused on making investments that set the stage for multi-year performance while balancing margin recovery and growth.

Q：How does the company plan to continue investing in its portfolio and products for future success?

A：The company plans to continue investing in its portfolio and products for future success by focusing on multi-year performance. They aim to balance investments in the portfolio with strategies that ensure margin recovery and growth, closely monitor macroeconomic factors, and use the insights gathered to guide their strategic plans.

Q：What should investors expect to learn about the company's future plans at the upcoming investor day?

A：Investors should expect to learn about the company's future plans at the upcoming investor day, which includes insights into the portfolio being built, specific investments being made, capabilities the company has, and the expected outcomes. This information is meant to bring to life the strategies and plans that the company will be sharing with investors.

Q：What is the company's approach to innovation and how does it plan to continue in the future?

A：The company is making continued investments in Research and Development (R&D) to be able to bring products to the market faster with relevant consumer facing ideas. They will share the upcoming innovations at their upcoming investor day and expect to maintain a robust pipeline of innovation through 2027.

Q：What are the expected trends for gross margin and earnings in the upcoming quarters?

A：The company expects a strong top line in Q1, with momentum carried through from the fourth quarter. Gross margin and earnings will remain under pressure due to higher cost inventory and tariffs. Q2 is expected to show an inflection from a profitability standpoint, and there will be a moderate top line growth rate in Q3. The company anticipates double-digit EPS growth for the balance of the year, factoring in tougher comps in the second half.

Q：What is the company's strategy for growth in the chocolate category and how does it plan to address potential volume decline narratives?

A：The company believes in the resilience and emotional appeal of the chocolate category, which is seeing growth in functional and emotional brands. Looking historically, the category has been very resilient. They plan to focus on the right segments within the category such as better-for-you, premium, and portion control, which are driving growth. At the upcoming investor day, they will discuss the long-term plan and category sustainability. They emphasize their brands' positioning in the category and their plans to reinvent and grow existing products, like A1 and pretzels, to align with consumer trends.

Q：How is the company responding to the changing competitive landscape in the chocolate market in Europe?

A：The company is studying consumer behavior in Europe, where there is less brand differentiation compared to the US. Europe has a concentration on chocolate tablet bars and private label products. However, the company believes in the distinction between their brands and their roles in the confectionery category. They will gather insights from the implementation of Snap in various states and monitor the impact on their business. The company aims to understand the differences between US and European markets and adjust their strategies accordingly.

Q：What is the company's outlook on Snap benefits and how does it factor into their financial expectations?

A：The company's early assessment of the impact of Snap in states where it has been implemented is still noisy, and they're closely monitoring the situation. Snap benefits have been factored into their outlook for the year, considering that two out of the 12 states with approved Snap waivers have implemented them so far. They expect it to remain a manageable headwind and are prepared to update their strategies based on ongoing insights.

Q：What are the company's plans for promotional activities and how do they balance promotions with marketing spend?

A：The company has great programming for building big brands and will continue supporting cultural events throughout the year. They aim to balance pull (brand building) and push (促销活动) strategies to deliver top-line growth. The category remains rational in terms of pricing, and they plan to leverage promotions to drive excitement among consumers and maintain the right price point. The company expects to be in line with category pricing and promotional execution, including the demand creation activities and investment in advertising and promotions.

Q：Can the team's models account for the cumulative impact of various macro factors such as federal level SNAP cuts, state level waivers, GLPs, and pricing elasticity?

A：The team is trying to understand and account for the impact of various macro factors by working with retailers to understand on-the-ground effects and trying to build models with the best available information. However, it is acknowledged that it is a challenge due to the novelty of some factors and lack of historical precedents for how they might play out cumulatively.

Q：What does 'playing offense' mean in the context of应对snap的挑战?

A：Playing offense in this context involves working with customers, particularly focusing on affordability and driving insights around affordable price points and unique packaging. Specific examples include implementing strategies in two states out of 12 where Snap is being applied, and continuing to discuss and adjust these strategies as more data is gathered.

Q：Are the cocoa costs for 2026 in line with those of 2025 as per the latest commodity basket values?

A：Cocoa costs for 2026 are slightly higher than 2025 but are hedged above the current market level, not materially above 2025 prices. There is a possibility of participating in the downside due to current hedging structures, and the company has various hedging strategies in place to manage costs.

Q：How does the company plan to support smaller brands within its chocolate portfolio?

A：The company aims to invest in its portfolio through world-class portfolio management, with significant investments announced for brands like Hershey's and Rees's. It emphasizes a balanced approach between large and small brands, focusing on each brand's role within the portfolio to target consumers more effectively and support the growth of smaller brands, including non-working media investments for new brands and occasions.

Q：What is the company's approach to hedging and pricing for 2027 and beyond?

A：The company will be very thoughtful and use a structured program to approach 2027 hedging, although specific details are not provided. For pricing, the focus is on the current pricing actions and the fact that near-term pricing pressure is reduced due to the cocoa price trading levels. The company will continue to execute and activate against the pricing taken, emphasizing that pricing is part of a long-term strategy, with attention also given to mix, innovation, and value pack architecture.

Q：What is the company's strategy for volume growth and when can volumes return to flat or positive?

A：The company is focused on digesting the price increase from 2026 and expects to return to a balanced mix of price and volume. It plans to leverage parts of the portfolio that are well-positioned for volume growth and is optimistic about equipment that can increase production of candy. Volumes are expected to improve and the company is confident in its plans to support volume growth and drive occasion-based growth.

Q：How does the company view protein as a category and what are its plans for expanding in this area?

A：The company sees a strong outlook for its protein business and has been investing in research and development around protein and fiber. It recognizes the importance of functional snacking and plans to continue building on its efforts in this area, including with brands like one and fulfill. There is an acknowledgment of the growing consumer interest in protein and the opportunity to expand the portfolio organically or through acquisitions.

Q：What are the considerations and potential opportunities for expanding the protein portfolio?

A：The company is open to growing organically and considering acquisition opportunities to expand its protein portfolio. It is focused on growing existing brands first but remains open to exploring new brand opportunities that can strengthen the portfolio. The company is taking a cautious approach, prioritizing current growth and innovation before considering new acquisition opportunities.

Q：How does the company expect to manage volume impacts and pricing in 2026?

A：The company has embedded the volume impact of the pricing in its guidance and is prepared to adjust marketing dollars, promotions, and investments based on the actual elasticity inside the plan. It believes it has the agility to deploy resources to protect sensitive areas and respond if necessary. The market has been characterized as rational with stable competitive conditions, and the pricing actions have been realized as expected.

Q：Did the company implement any changes to its pricing strategy since the last announcement?

A：The company has not implemented any rollbacks in pricing and believes all announced pricing changes are in effect. There seems to be a possible misunderstanding about whether the reference to pricing pertains to a segment or the overall company. However, the company has realized the previously announced pricing, and everything is aligned with execution.

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