Hershey profit shock: 60% drop despite sales bump

Hershey Q4 results – summary

• Hershey reports a steep 59.9% quarterly net income drop
• Leadership maintains optimism despite consecutive profit declines across recent quarters
• Rising sales contrast sharply with shrinking profits amid ongoing cost pressures
• Acquisitions and organic sales growth offer limited support to overall performance
• Investors may question confidence as Hershey emphasises long‑term value creation

The Hershey Company has revealed a massive 59.9% net income drop in its fourth quarter results, released today.

The confectionery maker, known for big-name brands including Hershey Kisses, Twizzlers and Reese’s, saw net income plummet to $320m (€271m), or $1.57 per share-diluted.

This is yet another drop for the Pennsylvania-based brand, which suffered a reported 38.2% net income drop in Q3.

Moreover, reported net income for the full-year 2025 dropped 60.3%.

Despite this, president and CEO Kirk Tanner says Hershey enters 2026 with “strong conviction in the momentum” of the business.

Though he acknowledged the company’s struggles, saying he’s proud of how teams have “navigated a challenging environment”.

Tanner’s words reflect pressures that extend far beyond Hershey itself. The confectionery industry as a whole has spent the past two years grappling with an unusually tough set of headwinds.

One of the most significant being volatility in the cocoa market. Geopolitical tensions have added another layer of difficulty, with the 2025 trade war between major economies disrupting supply chains, pushing up import and production costs, and creating uncertainty for long‑term planning.

More broadly, inflation, cost‑of‑living pressures and shifting consumer behaviours are weighing on sales across the sweets category. As household budgets tighten, consumers are trading down, buying less frequently, or switching to cheaper sugar‑based confectionery – a trend that many manufacturers expect to continue into 2026.

Together, these pressures paint a picture of an industry under strain, navigating everything from climate‑driven crop failures to international trade turbulence. Hershey’s struggles, then, are far from isolated, they reflect systemic challenges reshaping the global confectionery landscape.

Having said that, it’ll be interesting to see how investors react to Tanner’s words that Hershey is “building the capabilities and brand investments” that position it for “continued success”.

Although his focus on the company’s “strategy to deliver long-term growth and value creation for our shareholders” could go some way to appeasing them.

And it’s not all bad news for the American multinational.

Consolidated net sales were up 7%, to just over $3bn, and organic, constant currency net sales increased by 5.7%.

The company also got a lift from recent acquisitions, including snack brand LesserEvil, as net sales from acquisitions provided a 1.2 percentage point bump.

In other words, if they can get costs under control then profit increases will follow.

Hershey’s future

Looking ahead, much will depend on how effectively Hershey can balance its reinvestment strategy with the need to reassure an increasingly cautious market.

The company’s full-year outlook, which emphasises disciplined cost management and a sharpened focus on innovation, suggests leadership is betting on a rebound once inflationary pressures and supply chain costs stabilise.

For now, however, the stark contrast between rising sales and shrinking profits paints a more complicated picture – one that investors will be watching closely in the quarters to come.

Whether Hershey’s confidence in its long-term path proves well‑founded remains to be seen, but with consumer demand holding strong and recent acquisitions adding momentum, the confectionery giant is clearly banking on sweeter results ahead.

We’ll be watching developments in one of America’s oldest confectionery companies closely.