In short: Named beside Kraft Heinz as the staples "all starting to bottom here… worth a look" (Verrone) — a bottoming call inside a group he still ranks last among defensives, not a leadership call.
Hershey has had the additional problem of cocoa costs on top of the general staples malaise. It is named beside Kraft Heinz as one of the names "starting to bottom," with exactly the same modest framing — worth a look, not leadership.
40:31You're kidding. Where is the life? Kraft Heinz, Hershey's all starting to bottom here. I think they're worth a look. I would hardly call the sector leader in the market, I'm sure there's a — And then you look at health care which I think is an animal of its own.
In short: Price over volume. Q2 revenue +7% Y/Y to $2.8B ($160M beat) and adjusted EPS +57% to $1.90 ($0.47 beat), with gross margin expanding to 45.3% from 30.5% on pricing, lower cocoa costs and productivity. But growth came almost entirely from 12 points of price against an 8-point volume/mix decline — Hershey is protecting profit by charging more, and it's costing volume. North American salty snacks surged 23%, helped by the LesserEvil acquisition, though the segment's profitability was weaker than expected; North American confectionery grew 4.2% on price with double-digit volume declines underneath, leaving organic growth at just 3.6%. FY26 guidance raised — sales growth to 4.5–5% and adjusted EPS to $8.36–$8.52 — with CFO Steve Voskuil expecting confectionery volumes to recover as cocoa inflation eases and shoppers adjust to higher prices, and management optimistic on an early Halloween. The bull case is falling cocoa costs while the price increases hold. Watch North American confectionery volume in Q3: "pricing this far ahead of volume isn't durable growth… the 12-point price lever becomes a ceiling rather than an engine." (Recap, not a stance call.)
Hershey's profit soared 57% and gross margin went from 30.5% to 45.3%, which sounds spectacular until you see how: twelve percentage points of price increases against an eight-point decline in volume. In other words, Hershey is protecting profit by charging more, and shoppers are buying less chocolate. Confectionery sales in North America grew 4.2% purely on price, with double-digit volume declines underneath. Management's bet is that cocoa costs are now falling while the higher prices stick, and that volumes recover as shoppers adjust — helped by an early Halloween. The article's caution is the right one: pricing this far ahead of volume isn't durable growth, and if shoppers don't come back as inflation eases, that twelve-point price lever becomes a ceiling rather than an engine. Watch North American confectionery volume next quarter. A recap, not a call.
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