On March 31, 2025, Hershey entered into a Merger Agreement to acquire LesserEvil, LLC, a privately held company that produces and sells organic popcorn and puffed snack products. This acquisition complements Hershey's existing product portfolio and is expected to close by mid-2025.

Total U.S. retail takeaway declined 6.7%, driven by a 9.0% decline in CMG consumer takeaway. However, Salty consumer takeaway increased 9.6%, indicating a shift in consumer preferences.

Net sales in the International segment decreased 15.9% YoY, driven by volume declines and unfavorable foreign currency exchange rates. This indicates challenges in international markets.

The Advancing Agility & Automation Initiative, designed to improve supply chain and manufacturing efficiency, resulted in $16.4 million in costs during Q1 2025. The initiative is expected to generate $300-350 million in annual savings by 2026.

The enterprise resource planning (ERP) system implementation, which caused accelerated shipments in Q1 2024, was completed in the beginning of the second quarter of 2024. This suggests a key project was successfully executed.

Pre-tax compensation expense for stock compensation plans increased from $5.986 million in Q1 2024 to $13.559 million in Q1 2025. This indicates a change in equity-based compensation strategy.

The average cocoa futures contract price increased approximately 25% compared to the 2024 annual average, and the price outlook remains uncertain due to liquidity and volatility events in the market. This could impact financial condition and results of operations.

Changes in global trade policies, including tariffs, and geopolitical events, such as the conflict between Russia and Ukraine, could increase global economic and political uncertainty and negatively impact financial results.

The Company anticipates continued developments in food industry legislation and regulatory requirements, which may result in incremental costs to our business. The FDA intends to phase out the approved use of petroleum-based synthetic dyes in food products.

The U.S. candy, mint and gum (CMG) consumer takeaway declined 9.0% and experienced a CMG market share decline of 46 basis points. This indicates increased competition or changing consumer preferences in this segment.

Salty consumer takeaway increased 9.6% in the first quarter of 2025 and experienced a Salty market share increase of 37 basis points. This suggests a strengthening competitive position in the salty snacks market.

The International segment experienced volume declines and unfavorable foreign currency impacts, indicating challenges in maintaining competitive positioning in international markets.

Selling, marketing & administrative expenses decreased 9.6% YoY, driven by lower compensation costs across reportable segments, as well as $4.6 million of incremental business realignment costs. This indicates improved operational efficiency.

The increase in cost of sales was partially offset by $334.3 million, primarily related to lower sales volume and lower supply chain costs. This indicates improved supply chain efficiency.

Business realignment costs totaled $16.4 million during Q1 2025, indicating ongoing efforts to improve operational efficiency. These costs are related to the Advancing Agility & Automation Initiative.

Capital expenditures decreased from $213.3 million in Q1 2024 to $145.5 million in Q1 2025, largely driven by the wind down of key strategic initiatives, including the ERP system implementation. This suggests a shift in investment priorities.

The Advancing Agility & Automation Initiative focuses on leveraging new technology to improve supply chain and manufacturing-related spend, and optimize selling, general and administrative expenses. This indicates a focus on technological innovation.

The company monitors consumer expectations and behavior, which suggests a focus on adapting products and strategies to meet evolving consumer needs.

The company issued $2 billion in new notes during the first quarter of 2025. Proceeds from the issuance of the 2025 Notes, net of discounts and issuance costs, totaled $2.0 billion. This indicates a focus on managing the capital structure.

The company repurchased shares of Common Stock to offset the dilutive impact of treasury shares issued under equity compensation plans. This indicates a commitment to managing shareholder value.

The company continues to invest in partnership entities that in turn make equity investments in projects eligible to receive federal historic and renewable energy tax credits. This indicates a focus on tax optimization.

The Company monitors human and workplace rights, suggesting an awareness of and commitment to social responsibility.

The Company monitors environmental matters, suggesting an awareness of and commitment to environmental responsibility.

The Company monitors governance matters, suggesting an awareness of and commitment to good governance.

The company experienced a dynamic macroeconomic environment, including shifts in consumer behavior and continued price volatility related to select commodities. This highlights the impact of external factors on the company's performance.

The possibility of a recession, changes in consumer shopping and consumption behavior, and changes in geopolitical events, including the imposition of tariffs and retaliatory tariffs, may continue to experience increasing supply chain costs, higher inflation and other impacts to our business.

The food industry is subject to increasing laws and regulations, including nutrition, food date labeling and traceability recordkeeping requirements, as well as changes in consumer expectations and behavior.