The Hershey Company (HSY) 8-K Entry into a Material Definitive Agreement

Exhibit 99.1

   THE HERSHEY COMPANY ANNOUNCES RECORD SECOND QUARTER AND
FIRST HALF RESULTS FROM OPERATIONS, RAISES 2005 AND 2006
OUTLOOK, AND LAUNCHES NEW PROGRAM TO ADVANCE  ITS
VALUE-ENHANCING STRATEGY

HERSHEY, Pa., July 21, 2005 —The Hershey Company (NYSE:HSY) today reported record sales and earnings from operations for the second quarter and first half ended July 3, 2005. Consolidated net sales for the second quarter were $988,447,000, compared with $893,688,000 for the second quarter of 2004, an increase of 10.6 percent. Net income for the second quarter of 2005 was $97,361,000, or $.39 per share-diluted, compared with $147,217,000, or $.56 per share-diluted, for the comparable period of 2004. Results for the second quarter of 2004 include the benefit of a $61.1 million, or $.23 per share-diluted, non-cash reduction of income tax expense resulting from adjustments to income tax contingency reserves following the completion of prior years’ tax audits. Excluding this item, net income for the second quarter of 2004 was $86,136,000, or $.33 per share-diluted; second quarter 2005 earnings per share-diluted rose 18.2 percent over this number.

“Hershey’s strong second quarter results clearly show the continued momentum behind our value-enhancing strategy. A combination of solid sales growth and improved leverage across the business system delivered record profitability, with earnings per share-diluted from operations increasing by 18.2 percent compared with the same period a year ago,” said Richard H. Lenny, Chairman, President and Chief Executive Officer, The Hershey Company. “Organic sales growth of 7.6 percent represented a good balance between higher net price realization and continued new product innovation both within core confectionery and our snack platforms. The recently acquired Mauna Loa and Grupo Lorena businesses contributed three percent to the quarter’s 10.6 percent sales growth.”

For the first six months of 2005, consolidated net sales were $2,114,861,000, compared with $1,906,777,000 for the first half of 2004, an increase of 10.9 percent. Net income for the first six months of 2005 was $215,582,000, or $.86 per share-diluted, compared with $254,364,000, or $.97 per share-diluted, for the first half of 2004. Excluding the one-time income tax contingency reserve adjustment mentioned above, net income for the first half of 2004 was $193,283,000, or $.74 per share-diluted.

“Hershey’s performance has been very healthy through the first half of 2005,” Lenny said. “We’ve delivered above-trend organic sales growth of 8.0 percent, strengthened our marketplace leadership, and delivered earnings per share-diluted growth from operations of 16.2 percent compared with the first half of last year. These results have been driven by broad-based innovation, superior retail execution and solid cost control.

“Looking ahead, our second-half seasonal programs are off to a good start. We’ve recently announced several exciting new products that further extend Hershey’s iconic brands. For the year as a whole, we expect 2005 net sales to increase at a rate somewhat above our long-term goal of 3 to 4 percent, with diluted earnings per share from operations increasing slightly above our long-term range of 9 to 11 percent.”

Program To Further Enhance Value

The Hershey Company also announced a new program to further advance its value-enhancing strategy. This program includes three components: (1) voluntary workforce reduction through an Early Retirement Program and an Enhanced Mutual Separation Program; (2) streamlining and creating new capabilities in Hershey’s North American operations; and (3) closure of the Company’s under-utilized Las Piedras, Puerto Rico manufacturing facility. Employees at this facility will receive severance support as well as assistance with career decisions and transition leading up to the plant closing in late 2005.

Hershey estimates that the cost to implement the program will result in a pre-tax charge of approximately $140 million to $150 million, or $.41 to $.44 per share-diluted on an after-tax basis. The cash portion of the charge is $85 million to $90 million. About 80 percent of the charge will be recorded in the second half of 2005, and the final 20 percent in the first half of 2006. The program, when fully implemented, is expected to generate ongoing annual savings of approximately $45 million to $50 million. A substantial portion of these savings will be invested in key growth efforts in the US snack market as well as in selected international markets principally through global customer alliances.

“The changes announced today are necessary for Hershey to remain competitive in the years ahead,” Lenny said. “They will enable us to streamline our business, increase the investment in our consumer and customer initiatives, and build new organization capabilities. Our value-enhancing strategy implemented in late 2001 has served Hershey shareholders well. This strategy has accelerated profitable organic growth, strengthened Hershey’s leadership position, and delivered record profitability. We anticipate similar benefits into the future. Based on our 2005 expected performance and the impact of today’s announcement, we believe that, in 2006, net sales will increase at a rate somewhat above our 3 to 4 percent expectations, and diluted earnings per share, excluding the charge related to our new value-enhancing program, will be slightly above the 9 to 11 percent long-term range.”

Note:  In this sales and earnings release, Hershey has provided income measures excluding certain items described above, in addition to income determined in accordance with GAAP. These non-GAAP financial measures, as shown in the attached pro forma income statements, are used in evaluating results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations.

Live Web Cast

As previously announced, the Company will hold a conference call with analysts today at 8:00 a.m. Eastern Time. The conference call, with slides, will be broadcast live via Hershey’s corporate Web sitewww.hersheys.com. Please go to the Investor Relations Section of the Web site for further details.

Safe Harbor Statement

This release contains statements which are forward-looking. These statements are made based upon current expectations which are subject to risk and uncertainty. Actual results may differ materially from those contained in the forward-looking statements. Factors which could cause results to differ materially include, but are not limited to: the Company’s ability to implement and generate expected ongoing annual savings from the program to advance its value-enhancing strategy, announced today; changes in the Company’s business environment, including actions of competitors and changes in consumer preferences; customer and consumer response to selling price increases; changes in governmental laws and regulations, including taxes; market demand for new and existing products; changes in raw material and other costs; pension cost factors such as actuarial assumptions, market performance, and employee retirement decisions; and the Company’s ability to implement improvements to and reduce costs associated with its supply chain, as discussed in the Company’s Annual Report on Form 10-K for 2004.

About The Hershey Company

The Hershey Company (NYSE: HSY) is a leading snack food company and the largest North American manufacturer of quality chocolate and non-chocolate confectionery products. With revenues of over $4 billion and more than 13,000 employees worldwide, The Hershey Company markets such well-known brands asHershey’s,Reese’s,Hershey’s Kisses,Kit Kat,Almond Joy, Mounds, Jolly Rancher, Twizzlers, Ice Breakers,and Mauna Loa, as well as innovative new products such asTake 5candy barand Hershey’scookies. In addition to its traditional confectionery products, Hershey offers a range of products specifically developed to address the nutritional interests of today’s health-conscious consumer. These products include sugar-free Hershey’s, Reese’s andYork candies, as well asHershey’s SmartZonebars for people seeking balanced nutrition. It also marketsHershey’scocoa,Hershey’ssyrup and other branded baking ingredients, toppings and beverages. Visit us atwww.hersheynewsroom.com.

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Media Contact:   Stephanie L. Moritz   717-534-7641
Financial Contact:   James A. Edris   717-534-7556

       The Hershey Company
Summary of Consolidated Statements of Income
for the periods ended July 3, 2005 and July 4, 2004
(in thousands except per share amounts)

	Second Quarter						Six Months
	2005			2004			2005			2004
Net Sales	$	988,447		$	893,688		$	2,114,861		$	1,906,777
Costs and Expenses:
Cost of Sales		594,699			533,204			1,289,830			1,158,836
Selling, Marketing and Administrative		220,626			209,561			446,036			413,694
Total Costs and Expenses		815,325			742,765			1,735,866			1,572,530
Income Before Interest and Income Taxes (EBIT)		173,122			150,923			378,995			334,247
Interest Expense, net		20,625			15,488			40,029			30,342
Income Before Income Taxes		152,497			135,435			338,966			303,905
Income Tax Provision (Benefit)		55,136			(11,782	)		123,384			49,541
Net Income	$	97,361		$	147,217		$	215,582		$	254,364
Net Income Per Share - Basic - Common	$	0.41		$	0.58		$	.90		$	1.00
- Basic - Class B	$	0.37		$	0.53		$	.82		$	.91
- Diluted	$	0.39		$	0.56		$	.86		$	.97
Shares Outstanding - Basic - Common		184,362			198,068			185,047			198,482
- Basic - Class B		60,818			60,844			60,824			60,844
- Diluted		248,927			261,707			249,625			261,871
Key Margins:
Gross Margin		39.8	%		40.3	%		39.0	%		39.2	%
EBIT Margin		17.5	%		16.9	%		17.9	%		17.5	%
Net Margin		9.8	%		16.5	%		10.2	%		13.3	%

The Hershey Company
Pro Forma Summary of Consolidated Statements of Income
for the periods ended July 3, 2005 and July 4, 2004
(in thousands except per share amounts)

	Second Quarter						Six Months
	2005			2004			2005			2004
Net Sales	$	988,447		$	893,688		$	2,114,861		$	1,906,777
Costs and Expenses:
Cost of Sales		594,699			533,204			1,289,830			1,158,836
Selling, Marketing and Administrative		220,626			209,561			446,036			413,694
Total Costs and Expenses		815,325			742,765			1,735,866			1,572,530
Income Before Interest and Income Taxes (EBIT)		173,122			150,923			378,995			334,247
Interest Expense, net		20,625			15,488			40,029			30,342
Income Before Income Taxes		152,497			135,435			338,966			303,905
Provision for Income Taxes		55,136			49,299	(a)		123,384			110,622	(a)
Net Income	$	97,361		$	86,136		$	215,582		$	193,283
Net Income Per Share - Basic - Common	$	0.41		$	0.34		$	.90		$	.76
- Basic - Class B	$	0.37		$	0.31		$	.82		$	.69
- Diluted	$	0.39		$	0.33		$	.86		$	.74
Shares Outstanding - Basic - Common		184,362			198,068			185,047			198,482
- Basic - Class B		60,818			60,844			60,824			60,844
- Diluted		248,927			261,707			249,625			261,871
Key Margins:
Gross Margin		39.8	%		40.3	%		39.0	%		39.2	%
EBIT Margin		17.5	%		16.9	%		17.9	%		17.5	%
Adjusted Net Margin		9.8	%		9.6	%		10.2	%		10.1	%

    (a)        Excludes adjustment to income tax contingency reserves of ($61.1) million for the second quarter and the six months.

      The Hershey Company
Consolidated Balance Sheets
as of July 3, 2005 and December 31, 2004
(in thousands of dollars)

Assets	2005		2004
Cash and Cash Equivalents	$	24,712	$	54,837
Accounts Receivable - Trade (Net)		296,980		408,930
Deferred Income Taxes		46,703		46,503
Inventories		834,586		557,180
Prepaid Expenses and Other		130,803		114,991
Total Current Assets		1,333,784		1,182,441
Net Plant and Property		1,681,390		1,682,698
Goodwill		455,165		463,947
Other Intangibles		136,123		125,233
Other Assets		425,271		343,212
Total Assets	$	4,031,733	$	3,797,531
Liabilities and Stockholders' Equity
Loans Payable	$	959,499	$	622,320
Accounts Payable		173,636		148,686
Accrued Liabilities		404,047		472,096
Taxes Payable		14,564		42,280
Total Current Liabilities		1,551,746		1,285,382
Long-Term Debt		690,060		690,602
Other Long-Term Liabilities		429,312		403,356
Deferred Income Taxes		332,650		328,889
Total Liabilities		3,003,768		2,708,229
Total Stockholders' Equity		1,027,965		1,089,302
Total Liabilities and Stockholders' Equity	$	4,031,733	$	3,797,531