What drove the sharp decline in reported earnings?

The filing attributes the decline mainly to a $423.2 million full-year 2025 derivative mark-to-market loss on commodity derivatives, higher commodity and tariff costs, lower volume from price elasticity, and increased selling, marketing and administrative expenses. Fourth-quarter gross margin also reflected the lap of $264.7 million in derivative gains recorded in the prior-year period.

What is the company's 2026 outlook?

Management expects full-year 2026 reported net sales to increase 4% to 5%, with reported diluted EPS of $7.77 to $8.19 and adjusted diluted EPS of $8.20 to $8.52. Adjusted EPS growth is projected at 30% to 35%. The company also expects an effective tax rate of about 25% to 27%, interest expense of $200 million to $210 million, and capital expenditures of $425 million to $475 million.

Why does the reported EPS outlook differ from the adjusted outlook?

The filing states the gap primarily reflects a large derivative mark-to-market loss recorded in reported 2025 earnings per share. The 2026 projected EPS excludes the impact of mark-to-market gains and losses on commodity derivatives, which the company cannot forecast, and it includes business realignment and acquisition-related costs of $0.30 to $0.35 and $0.15 to $0.20 per share, respectively.

Which segments drove growth and which weakened?

North America Salty Snacks drove growth, with fourth-quarter net sales up 28.0% and segment income up 38.1%, aided by LesserEvil and higher volume. North America Confectionery net sales rose 5.3%, but segment income fell 10.7%. International net sales were nearly flat at up 0.4%, but the segment posted a $31.6 million loss due to higher commodity costs and lower volume.

What were the main items affecting comparability in the quarter?

In the fourth quarter of 2025, items positively impacting comparability totaled $84.4 million pre-tax, or $0.14 per share-diluted. These included a $35.2 million derivative mark-to-market loss, $34.9 million in acquisition and integration-related activities, $7.8 million in business realignment activities, and a $6.4 million goodwill impairment charge, offset by a $(0.29) per share tax effect.

HSY 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.

The Hershey Company (NYSE: HSY) reported fourth-quarter 2025 consolidated net sales of $3,091.0 million^a, up 7.0%, with organic, constant currency net sales up 5.7%.

Reported net income fell 59.9% to $320.0 million^b, or $1.57 per share-diluted, and adjusted earnings per share-diluted fell 36.4% to $1.71. For full-year 2025, net sales rose 4.4% to $11,692.6 million, while reported net income decreased 60.3% to $883.3 million, or $4.34 per share-diluted, and adjusted earnings per share-diluted decreased 32.7% to $6.31. The filing attributes the profit decline to higher commodity and tariff costs, lower volume from price elasticity, a large derivative mark-to-market loss in 2025, and increased selling, marketing and administrative expenses, partly offset by net price realization and transformation program savings.

For 2026, the company expects reported net sales to grow 4% to 5%, including an approximate 150 basis point benefit from the LesserEvil acquisition, with foreign currency expected to be neutral. Reported diluted EPS is projected at $7.77 to $8.19^c, and adjusted diluted EPS at $8.20 to $8.52, representing increases of 30% to 35% on an adjusted basis. Management expects sales growth and gross margin recovery to more than offset higher strategic investment in brands, capabilities and technology, and higher interest expense.

Guidance also includes an effective tax rate of approximately 25% to 27%, interest expense of $200 million to $210 million^d, and capital expenditures of $425 million to $475 million. The North America Salty Snacks segment was the standout performer, with fourth-quarter net sales up 28.0% and segment income up 38.1%, while North America Confectionery segment income fell 10.7% and International swung to a segment loss of $31.6 million in the quarter. The filing also records a $84.4 million net positive pre-tax item affecting comparability in the fourth quarter of 2025 and a $264.7 million derivative mark-to-market gain in the prior-year quarter.

02—Key points

Key Highlights

Fourth-quarter 2025 net sales were $3,091.0 million, up 7.0%; organic, constant currency net sales rose 5.7%, with net price realization of approximately 9%.
Reported fourth-quarter diluted EPS was $1.57, down 59.9% in net income terms; adjusted diluted EPS was $1.71, down 36.4%.
Full-year 2025 net sales were $11,692.6 million, up 4.4%, while reported diluted EPS was $4.34 and adjusted diluted EPS was $6.31, down 32.7%.
North America Confectionery fourth-quarter segment income fell 10.7% to $722.0 million, with segment margin down 520 basis points to 29.1%.
North America Salty Snacks fourth-quarter net sales rose 28.0% to $357.0 million, and segment income rose 38.1% to $75.3 million, helped by the LesserEvil acquisition and volume growth.
International segment posted a fourth-quarter loss of $31.6 million, compared with segment income of $29.6 million in the prior-year quarter.
2026 guidance calls for net sales growth of 4% to 5% and adjusted diluted EPS of $8.20 to $8.52, versus reported EPS of $7.77 to $8.19.

03—Questions

Frequently Asked Questions

What drove the sharp decline in reported earnings?
The filing attributes the decline mainly to a $423.2 million full-year 2025 derivative mark-to-market loss on commodity derivatives, higher commodity and tariff costs, lower volume from price elasticity, and increased selling, marketing and administrative expenses. Fourth-quarter gross margin also reflected the lap of $264.7 million in derivative gains recorded in the prior-year period.
What is the company's 2026 outlook?
Management expects full-year 2026 reported net sales to increase 4% to 5%, with reported diluted EPS of $7.77 to $8.19 and adjusted diluted EPS of $8.20 to $8.52. Adjusted EPS growth is projected at 30% to 35%. The company also expects an effective tax rate of about 25% to 27%, interest expense of $200 million to $210 million, and capital expenditures of $425 million to $475 million.
Why does the reported EPS outlook differ from the adjusted outlook?
The filing states the gap primarily reflects a large derivative mark-to-market loss recorded in reported 2025 earnings per share. The 2026 projected EPS excludes the impact of mark-to-market gains and losses on commodity derivatives, which the company cannot forecast, and it includes business realignment and acquisition-related costs of $0.30 to $0.35 and $0.15 to $0.20 per share, respectively.
Which segments drove growth and which weakened?
North America Salty Snacks drove growth, with fourth-quarter net sales up 28.0% and segment income up 38.1%, aided by LesserEvil and higher volume. North America Confectionery net sales rose 5.3%, but segment income fell 10.7%. International net sales were nearly flat at up 0.4%, but the segment posted a $31.6 million loss due to higher commodity costs and lower volume.
What were the main items affecting comparability in the quarter?
In the fourth quarter of 2025, items positively impacting comparability totaled $84.4 million pre-tax, or $0.14 per share-diluted. These included a $35.2 million derivative mark-to-market loss, $34.9 million in acquisition and integration-related activities, $7.8 million in business realignment activities, and a $6.4 million goodwill impairment charge, offset by a $(0.29) per share tax effect.

04—Continue

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