Q3 2024 Hershey Co Earnings Call Transcript
Key Points
- The Hershey Co (HSY) expects to maintain its long-term growth algorithm of 2% to 4% on the top line, with pricing next year expected to be similar to this year.
- The company is seeing positive momentum in its sweets category, with innovation driving increased market share and strong performance during Halloween.
- Hershey's new head of North America Confectionery, Mike, brings a strong external perspective and deep retail experience, expected to enhance customer engagement and portfolio evolution.
- The company anticipates fewer headwinds in 2025 compared to 2024, with benefits from a longer Easter season and a strong innovation pipeline.
- Hershey is committed to investing in its brands, with plans to enhance marketing efficiency and focus on high-velocity items in instant consumables.
- The Hershey Co (HSY) faces significant cocoa cost inflation, which is expected to be a major headwind in 2025, impacting overall cost structure.
- The company's gross margin in the quarter was below expectations due to sales flow-through issues, negative sales mix, and volume deleverage.
- Increased competition from private label and smaller players in the confectionery market is impacting Hershey's market share, particularly in take-home segments.
- The company is experiencing pricing competition in international markets, notably in Mexico and Brazil, affecting its performance in those regions.
- Hershey's instant consumable segment remains under pressure, with convenience store challenges expected to persist into the first half of next year.
Greetings, and welcome to the Hershey Company third-quarter 2024 earnings Q&A session. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anoori Naughton, Senior Director of Investor Relations. Thank you. You may begin.
Good morning, everyone. Thank you for joining us today for Hershey Company's Third Quarter 2024 Earnings Q&A Session. I hope everyone has had the chance to read our press release and listen to the prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call.
Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements, including expectations and assumptions regarding the company's future operations and financial performance.
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