Hershey: Success in North America Salty Snacks Softens Sales Declines

The Hershey Company posted a 13.8% year-over-year net sales decrease to $2.8 billion during the first quarter in its earnings release this morning, though the decline was softer-than-expected thanks to growth in its North America Salty Snacks segment.

In the quarter ending March 30, the SkinnyPop and Dot’s Homestyle Pretzels maker saw Salty Snacks net sales grow 1% to $277.8 million. The segment’s retail takeaway in multi-outlet and convenience stores increased 9.6% versus Q1 2024.

On a brand-specific level, SkinnyPop ready-to-eat popcorn takeaway grew 6.4%, driven by velocity, innovation, refreshed branding and a media campaign starring actress Jennifer Aniston. The brand’s ready-to-eat share increased 190 basis points during the first quarter. Meanwhile, Dot’s retail sales climbed 20.7%, resulting in a 337-point pretzel category share gain fueled by innovation, programming and velocity.

LesserEvil – which Hershey has agreed to acquire for a reported $750 million – will extend the segment’s portfolio and is expected to capture incremental customers, according to chairman and CEO Michelle Buck.

“The Salty Snacks portfolio is well-positioned in the current environment with permissible and better-for-you brands continuing to resonate with consumers and driving overall category growth,” said Buck during prepared remarks. “We expect the benefits from the Jennifer Aniston campaign, new packaging and price-pack architecture to build over the coming months.”

Within the company’s North America Confectionery division, net sales plummeted 15% to $2.3 billion. Organic, constant currency net sales decreased 15.2% due to volume headwinds of 18 points tied to the timing of the Easter season this year compared to 2024 and two fewer shipping days than the prior-year period.

As for the cocoa supply chain, the Reese’s and KitKat maker is “encouraged by the recovery of the 2024-2025 cocoa crop,” as the top three cocoa markets are tracking a 20% increase in supply this season. The company has been hedging against cocoa constraints by diversifying its sourcing, seeing productivity pick up beyond Ghana and the Ivory Coast.

“There are reasons to believe that this year’s crop marks the beginning of a multi-year growth cycle in cocoa supply,” said Buck. “In the meantime, global end users are now responding to persistently high prices in earnest, having waited and watched for some time. The global cocoa grind, a measure of demand, declined 3.4% in Q1. This marks the eighth straight quarter of declines.”

Hershey has also been building up its non-chocolate sweets portfolio (see: the acquisition of Sour Strips and the launch of Shaqalicious XL Gummies) to hedge against cocoa constraints, but analysts questioned how the company will address Health and Human Services’ (HHS) voluntary directive to phase out eight synthetic food dyes – some of which are found in core products like Twizzlers (Red 40).

In response, Buck said, “Our highest priority is always around the safety and quality of our products, and we’ve proactively tried to stay ahead of where regulation might be headed. We’ve been ahead of some of the changes needed, like the paraben ban in California and Red Dye 3. We’ve had work underway on natural coloring for quite some time.”

Executives also addressed the potential impact of the U.S. Department of Agriculture’s (USDA) move to approve state requests to pull candy and soda from the Supplemental Food Assistance Program (SNAP). According to Buck, roughly 2% of SNAP purchases are candy, “well below” categories like salty snacks, desserts and soda. As such, Hershey does not believe the move will impact its business.

As a largely domestic food producer, Hershey believes it is “relatively less exposed [to] tariffs” than other industries. Still, the company expects incremental tariff expenses between $15 million and $20 million in the second quarter.

Looking ahead, Hershey is one of the few packaged food companies reiterating its net sales growth outlook for the year, though its guidance excludes potential tariff impacts. In fiscal 2025, Hershey expects net sales growth of at least 2%, reported EPS growth down in the high-40% range and adjusted EPS growth down in the mid-30% range.