The Hershey Company saw its profit decrease by more than half in the fourth quarter due to several headwinds, including higher commodity costs and tariffs.
The US-based snacks giant reported operating profit of US$444.9 million for the quarter ended December 31, representing a 52.6 per cent drop year-on-year. Operating profit margin also fell 18.1 percentage points to 14.4 per cent, and reported net income slid 59.9 per cent to $320 million.
Management attributed the decline to higher commodity and tariff costs, increased selling, marketing and administrative expenses, which were partially offset by net price realisation, net savings and supply chain productivity.
The company’s consolidated net sales increased 7 per cent to $3.09 billion. Organic, constant currency net sales grew 5.7 per cent, driven by favorable net price realisation, partially offset by elasticity-driven volume declines in both the North America confectionery and international segments.
By segment, North America confectionery sales were up 5.3 per cent, and North America salty snacks sales increased 28 per cent. International sales were largely flat, up only 0.4 per cent.
For the full year, consolidated net sales increased 4.4 per cent to $11.69 per cent, while net income plunged 60 per cent to $883.3 million.
The company expects net sales to increase 4-5 per cent in FY26.
