Hershey Gears Up for Q1 Earnings: Here's What You Should Know

The Hershey Company HSY is likely to register a decline in its top and bottom lines when it reports first-quarter 2025 earnings on May 1. The Zacks Consensus Estimate for revenues is pegged at $2.82 billion, implying a 13.3% decrease from the prior-year quarter’s reported figure. The consensus mark for earnings has moved down by 2 cents in the past 30 days to 1.94 per share, which suggests a decrease of 36.8% from the figure reported in the year-ago quarter. However, HSY has a trailing four-quarter earnings surprise of 1.7%, on average. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

Hershey Company (The) Price and EPS Surprise

Hershey Company (The) price-eps-surprise | Hershey Company (The) Quote

Things to Know About HSY’s Q1 Earnings

Hershey is navigating a particularly challenging landscape due to historically high cocoa prices and a financially stretched consumer base. These pressures continue to weigh heavily on the company's overall performance. For the first quarter of 2025, we project an adjusted gross margin contraction of 410 basis points.

Shifting consumer behavior, influenced by economic uncertainty, has led shoppers to prioritize essential purchases and seek value. As a result, foot traffic to convenience and drug stores — where Hershey’s brands have traditionally held a strong presence — has declined. This shift has negatively impacted impulse sales and contributed to Hershey’s loss of market share in its core everyday chocolate category, a segment critical to its business model.

Although take-home chocolate sales are showing signs of recovery, ongoing weakness in the convenience store channel remains a concern. Increased competition from smaller, more agile brands is also eroding Hershey’s share in key categories. At the same time, evolving consumer preferences have led to a rise in shopping at club, dollar and online channels — areas where Hershey’s product offerings are currently underdeveloped, further complicating the competitive landscape.

Adding to these challenges, tighter inventory management by retailers is impacting Hershey’s North America operations. Our model suggests a 12.1% decline in sales for the North America Confectionery segment in the first quarter. In addition, we anticipate a 1.1% decrease in net sales for the North America Salty Snacks business for the to-be-reported quarter.

While slowing demand and the impact of inflation on key ingredients like cocoa raise concerns, benefits from price realization and supply chain productivity improvements are likely to have offered some respite.

Earnings Whispers for HSY Stock

Our proven model predicts an earnings beat for Hershey this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hershey currently carries a Zacks Rank #3 and has an Earnings ESP of +2.20%.

Other Stocks With the Favorable Combination

Here are some other companies worth considering, as our model shows that these also have the right combination of elements to beat on earnings this reporting cycle.

Church & Dwight CHD currently has an Earnings ESP of +0.66% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for quarterly earnings per share (EPS) is pegged at 89 cents, which implies a roughly 7.3% decrease year over year. CHD has a trailing four-quarter earnings surprise of roughly 9.6%, on average. The Zacks Consensus Estimate for Church & Dwight’s first-quarter 2025 revenues is pegged at $1.51 billion, which indicates growth of 0.5% from the figure reported in the prior-year quarter.

Ollie's Bargain Outlet Holdings, Inc. OLLI currently has an Earnings ESP of +1.64% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter fiscal 2025 EPS is pegged at 70 cents, which implies a 4.1% decrease year over year.

The consensus mark for Ollie's Bargain’s quarterly revenues is pegged at $564.2 million, which indicates growth of 10.9% from the figure reported in the prior-year quarter. OLLI delivered a trailing four-quarter earnings surprise of 3.3%, on average.

The J. M. Smucker Company SJM currently has an Earnings ESP of +4.52% and a Zacks Rank of 3. The consensus estimate for J. M. Smucker’s quarterly revenues is pegged at $2.2 billion, which indicates a decline of 0.9% from the figure reported in the prior-year quarter. SJM delivered a trailing four-quarter earnings surprise of 11.7%, on average.

The Zacks Consensus Estimate for fourth-quarter fiscal 2025 EPS is pegged at $2.25, which implies a 15.4% decrease year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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