Even well-run companies face hard times now and again. In fact, it is the ability to survive the hard times that makes a company well run in the first place.
The consumer staples industry is large and varied. There are always some consumer staples companies that are attracting a great deal of interest on Wall Street while others languish in relative obscurity.
Hershey's stock has outperformed the S&P 500 recently, despite high cocoa prices and expected short-term weakness. Revenue and profitability have grown across all segments, with significant gains in North American Confectionary and Salty Snacks. Management anticipates cost pressures in 2025 but expects improvements by 2026 due to operational changes and potential cocoa price normalization.
The Hershey Company HSY, an industry-leading snacks firm, is facing mounting challenges, including historically high cocoa prices, weakening consumer demand and intensifying competition in key markets. Such challenges have led to a 6.1% drop in its share price in the past six months.
I rate The Hershey Company (NYSE:) as a HOLD, waiting for the earnings hype to cool down before potentially buying. I expect cocoa prices to keep rising due to climate change, negatively impacting Hershey's profit margins and net income. Despite strong historical financial growth and dividend performance, the company's future growth may slow, making current valuation fair but without a margin of safety.
The recent decline in Hershey's stock is now largely pricing-in the cost headwinds in 2025. A quick recovery in 2026, however, is something that I wouldn't rely on given the speculative nature of commodity prices. The business is also in a very delicate situation as far as price increases are concerned, and this could result in more short-term volatility.
The consumer staples sector giant saw shares rip higher after announcing its fourth quarter of 2024 earnings report, which firmly beat both top and bottom-line consensus analyst estimates.
The Hershey Company (HSY 0.56%) stock is one that has likely frustrated its long-term shareholders. It has delivered a flat performance over the last five years, largely because it has dropped more than 40% from its peak in May 2023.
In this podcast, Motley Fool analyst Bill Barker and host Ricky Mulvey discuss:
The Hershey Company (NYSE:HSY ) Consumer Analyst Group of New York Conference (CAGNY) 2025 February 18, 2025 1:00 PM ET Company Participants Michele Buck - Chairman, President and CEO Steve Voskuil - Senior Vice President and CFO Anoori Naughton - Head of Investor Relations Conference Call Participants Andrew Lazar - Barclays Capital Andrew Lazar Good afternoon, everyone. Next up, please welcome Hershey back to the CAGNY stage.
If you've been around long enough, you will encounter some bumps in the road. This is true for The Hershey Company (HSY -0.98%), whose history dates back to the 1890s.
The Hershey Company (HSY 1.73%) is one of the less volatile businesses you can own.