01—Abstract
Summary
Summary of the 10-K filed February 17, 2026. Cited figures are marked; the original filing is the authoritative source.
The Hershey Company reported full-year 2025 net sales of $11,692.6 milliona, up 4.4% from $11,202.3 million in 2024, driven by favorable price realization of approximately 6% and a volume decrease of approximately 1%.
Gross margin fell to 33.5% from 47.3%, and operating profit dropped to $1,441.5 millionb from $2,898.2 million, as higher commodity and tariff costs and a $491.0 million unfavorable mark-to-market impact on commodity derivatives weighed on results. Net income declined to $883.3 million from $2,221.2 million, and diluted EPS was $4.34 compared with $10.92 in 2024. The filing attributes the decline primarily to cost pressures from cocoa and other commodities, supply chain costs including tariffs, and lower volume.
Segment results were mixed. North America Confectionery net sales rose to $9,479.7 millionc, but segment income fell 15.3% to $2,493.8 million, with segment margin at 26.3%. North America Salty Snacks grew net sales 11.9% to $1,271.3 million, with segment income up 21.3% to $241.8 million, helped by volume gains and the LesserEvil acquisition completed November 18, 2025 for $815.2 million in consideration.
International segment income collapsed to $3.3 milliond from $111.5 million. Balance sheet and cash flow changes were notable. Operating cash flow was $2,277.4 million, down from $2,531.6 million.
Long-term debt rose to $4,681.2 million (carrying value of total debt $5.2 billion long-term plus short-term), following $2.0 billion of new notes issued in February 2025, and cash dividends paid totaled $1,085.3 million. The company guided 2026 capital expenditures of approximately $425 million to $475 million. Hershey Trust Company, as trustee for the Milton Hershey School Trust, retains voting control of the company.
02—Key points
Key Highlights
- Net sales of $11,692.6 million, up 4.4%, with price realization of approximately 6% offsetting a volume decrease of approximately 1%.
- Gross margin declined to 33.5% from 47.3%, reflecting $1,965.1 million of unfavorable costs including $736.6 million in higher commodity costs and $491.0 million of unfavorable commodity derivative mark-to-market activity.
- Operating profit fell 50.3% to $1,441.5 million; net income decreased to $883.3 million and diluted EPS to $4.34 from $10.92.
- North America Confectionery segment income fell 15.3% to $2,493.8 million, while North America Salty Snacks segment income rose 21.3% to $241.8 million.
- International segment income dropped to $3.3 million from $111.5 million, driven by higher commodity and manufacturing costs.
- Operating cash flow decreased to $2,277.4 million from $2,531.6 million; capital expenditures were $454.6 million in 2025 and are expected to be $425 million to $475 million in 2026.
- Acquired LesserEvil, LLC on November 18, 2025 for $815.2 million, and issued $2.0 billion of senior notes in February 2025; quarterly dividend declared at $1.452 per share for March 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Hershey kept $0.08.
- Revenue$11.69B100.0%
- Cost of revenue−$7.77B66.5%
- Gross profit$3.92B33.5%
- Operating costs−$2.48B21.2%
- Operating income$1.44B12.3%
- Interest, other & tax−$558.3M4.8%
- Net income$883.3M7.6%
Where FY2025 revenue went
$11.69B- Cost of revenue: $7.77B, 66% of revenue
- SG&A: $2.46B, 21% of revenue
- Net income: $883.3M, 7.6% of revenue
- R&D: $61.7M, 0.5% of revenue
- Interest, other & tax: $558.3M, 4.8% of revenue
Kept 7.6% as net incomeR&D $61.7M · 0.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 17, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $11.69B$11.20B | +4.4% |
| Cost of Revenue | $7.77B$5.90B | +31.7% |
| Gross Profit | $3.92B$5.30B | −26.0% |
| R&D Expenses | $61.66M$55.80M | +10.5% |
| SG&A Expenses | $2.46B$2.37B | +3.7% |
| Operating Income | $1.44B$2.90B | −50.3% |
| Interest Expense | $236.78M$194.24M | +21.9% |
| Net Income | $883.26M$2.22B | −60.2% |
05—Questions
Frequently Asked Questions
Why did Hershey's profitability decline sharply in 2025?
Cost of sales rose 31.7% to $7,769.9 million, driven by $736.6 million in higher commodity costs, $287.2 million in higher supply chain costs including tariffs, and $491.0 million of unfavorable mark-to-market activity on commodity derivatives that hedge future purchases. Price realization of approximately 6% only partially offset these costs, and gross margin fell to 33.5% from 47.3%.
How did the company's segments perform?
North America Confectionery net sales grew 4.0% to $9,479.7 million, but segment income fell 15.3% to $2,493.8 million. North America Salty Snacks net sales rose 11.9% to $1,271.3 million with segment income up 21.3%, aided by volume growth and the LesserEvil acquisition. International segment income fell to $3.3 million from $111.5 million.
What did the company do with capital in 2025?
Hershey acquired LesserEvil for $756.1 million in cash paid during 2025, purchased the Fulfil brand for $73.6 million, and paid $1,085.3 million in cash dividends. It issued $2.0 billion of new notes in February 2025 and repaid $300 million each of its 0.900% and 3.200% notes. No share repurchases were made in 2025, and approximately $470 million remains available under its December 2023 authorization.
What is the outlook for capital spending and tax-related items?
The company expects 2026 capital expenditures, including capitalized software, to approximate $425 million to $475 million. Its effective tax rate was 27.3% in 2025 compared with 10.2% in 2024, with the filing citing state taxes and tax reserves as primary drivers relative to the 21% statutory rate.
Who controls the company and what are the key ongoing risks?
Hershey Trust Company, as trustee for the Milton Hershey School Trust, maintains voting control of the company and was entitled to cast approximately 79% of votes on matters where both classes vote together. Key risks cited include cocoa and other commodity price volatility, U.S. tariffs and retaliatory tariffs, price elasticity affecting volume, and a customer concentration in which McLane Company accounted for approximately 27% of 2025 consolidated net sales.
06—Continue