Hershey (HSY)
Consumer Staples · $34.9B market cap · SEC CIK 0000047111
ahead of 40% of the S&P 500 · #23 of 36 in Consumer Staples
Next reports on Feb 3, 2027, after the close, with analysts expecting $1.81 in earnings per share.
52-week range $156.16 to $239.48. 27% below its 52-week high and 11% above its low.
The case for HSY
- Earns 38% back on shareholder equity.
- Generated $1.8B of free cash flow in FY2025, 16% of revenue.
- Moves less than the market (beta 0.05).
- Pays a modest 2.5% dividend.
The case against
- Expensive for its growth: 24.3× earnings, where 0% a year of growth plus a 2.5% dividend would justify about 12×.
- Revenue was flat on the year (+0.4%).
- Dividend takes 123% of earnings, leaving little cushion.
- The price trend is weak (36/100): +1.7% over a year, −5.1% over three months, 27% below its 52-week high.
- Long-term debt of $4.7B against $926M of cash.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Consumer Staples companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 36 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 53 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 73 |
| Momentumhow the price has behaved lately | 36 |
| Stabilityhow violently it moves, what it owes and what it pays you | 66 |
- Each factor except momentum is half fixed thresholds, half rank among the 36 Consumer Staples companies.
The financials
Revenue growth
Is the business growing? No, flat
| Last 12 months | +0.4% |
|---|---|
| Over 5 years | +7.5% a year |
| FY2025 revenue | $11.7B (+4%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2025 free cash flow | $1.8B |
|---|---|
| Of revenue | 16% |
| Of profit | 206% |
Profit margins
Is profitability improving? No, slipping
| Gross margin | 41% |
|---|---|
| Operating margin | 21% |
| Net margin, FY24 → FY25 → now | 19.8% → 7.6% → 14.2% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $926M |
|---|---|
| Long-term debt | $4.7B |
| Net debt | $3.8B |
| Years to repay | 2.1 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 24.3× |
|---|---|
| Fair P/E for its growth | 12× |
| P/FCF | 19.1× |
| Forward P/E | 17.6× |
| EV / EBITDA | 15.9× |
At 24.3× earnings it trades well above the 12× that 0% a year of growth plus a 2.5% dividend would justify. At 19.1× free cash flow it trades above that same mark.
The financials, five years deep
Pulled from Hershey's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $11.7B | $11.2B | $11.2B | $10.4B | $9.0B |
| Change on the year | +4% | 0% | +7% | +16% | — |
| Free cash flow | |||||
| Free cash flow | $1.8B | $1.9B | $1.6B | $1.8B | $1.6B |
| Of revenue | 16% | 17% | 14% | 17% | 18% |
| Profit margins | |||||
| Gross margin | 33.5% | 47.3% | 44.8% | 43.2% | 45.1% |
| Operating margin | 12.3% | 25.9% | 22.9% | 21.7% | 22.8% |
| Net margin | 7.6% | 19.8% | 16.7% | 15.8% | 16.5% |
| Debt vs. cash | |||||
| Cash | $926M | $731M | $402M | $464M | $329M |
| Long-term debt | $4.7B | $3.2B | $3.8B | $3.3B | $4.1B |
| Net cash (debt) | −$3.8B | −$2.5B | −$3.4B | −$2.9B | −$3.8B |
What Hershey says it does
The Hershey Company was incorporated under the laws of the State of Delaware on October 24, 1927 as a successor to a business founded in 1894 by Milton S. Hershey. In this report, the terms “Hershey,” “Company,” “we,” “us” or “our” mean The Hershey Company and its wholly-owned subsidiaries and entities in which it has a controlling financial interest, unless the context indicates otherwise. Hershey is a global confectionery leader known for making more moments of goodness through chocolate, sweets, mints, and other great tasting snacks. We are the largest producer of quality chocolate in North America, a leading snack maker in the United States and a global leader in chocolate and non-chocolate confectionery. We market, sell, and distribute our products under more than 85 brand names in approximately 65 countries worldwide. Reportable Segments The Company reports its operations through three segments: (i) North America Confectionery,…
Risk factors HSY lists in its 10-K
- Disruption to our manufacturing operations or supply chain could impair our ability to produce or deliver finished products, resulting in a negative impact on our operating results
- We might not be able to hire, engage, and retain the talented global human capital we need to drive our growth strategies
- Increases in raw material and energy costs along with the availability of adequate supplies of raw materials could affect future financial results
- Price increases may not be sufficient to offset cost increases and maintain profitability or may result in sales volume declines associated with pricing elasticity
- Market demand for new and existing products could decline
- Increased marketplace competition could hurt our business
- Our financial results may be adversely impacted by the failure to successfully execute or integrate acquisitions, divestitures and joint ventures
- Our international operations may not achieve projected growth objectives, which could adversely impact our overall business and results of operations
- We may not fully realize the expected cost savings and/or operating efficiencies associated with our strategic initiatives or restructuring programs, which may have an adverse impact on our business
- Changes in governmental laws, regulations and policies, including taxes and tariffs, could increase our costs and liabilities or impact demand for our products
- Political, economic and/or financial market conditions could negatively impact our financial results
- Disruptions, failures or security breaches of our information technology infrastructure could have a negative impact on our operations
- Complications with the design or implementation of our new enterprise resource planning system could adversely impact our business and operations