Earnings call transcript Q1 2023

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Operator

Greetings and welcome to The Hershey Company First Quarter 2023 Question-and-Answer Session. At this time, all participants are in a listen-only mode.

As a reminder this conference is being recorded.

I'd now like to turn the call over to your host, Ms. Melissa Poole, Vice President of Investor Relations for The Hershey Company. you. Thank

begin. may You

Melissa Poole

press Thank on first joining session. quarter had of read everyone everyone. pre-recorded to The remarks, website. management I today Hershey has both our to chance Company's XXXX are the and you morning, listen us our available for which for hope release our Good earnings Q&A

a replay Q&A the the conclusion At this addition, have session will In we remarks. we audio posted pre-recorded a transcript also call. post today's of transcript live and of of

these Please note Q&A performance. include financial of subsequent company's A today's SEC today's materially uncertainties. various during from those risks projected. such forward-looking press The the statements session, and company's company statements make be based that risks Actual we results update release detailed that events. statements found listing undertakes filings. expectations These to uncertainties regarding operations to and may can no the and in could assumptions are differ and subject on obligation future and

please non-GAAP be believe as results financial refer this to information are information measures to release. in of is for to or substitute GAAP note information financial considered accordance the in with certain not for GAAP. this isolation press we provide useful intended will may a that that presented the morning's Finally, The investors. presentation we Reconciliations in included

Hershey's CFO, are CEO, Hershey's Michele and today Chairman Steve Voskuil. and me Vice Joining Buck, President and Senior

first that, With it turn to for I will question. operator over the the

Operator

Our with Andrew your Lazar Barclays. first Please line with Instructions] question question. of [Operator proceed from comes

Andrew Lazar

so Thanks Great. everybody. morning, Good much.

Melissa Poole

morning. Good

Michele Buck

morning. Good

Andrew Lazar

Yes.

were few ahead on for the quarter. growth its only high is just the update on little organic a full to view. beat But the ask results year. raised top-line we about guidance the the of by previous out timing, But to I earlier of take when range guidance company sales Hershey street slightly really the the on wanted which the summer the I off, First in top-line. The points guess, end shipments, a bit

question that you is, the my the you So stage top-line what I the at this did? seeing you gave are way guess confidence to guidance shift that

Michele Buck

you, thank right. Yeah, Yeah, Andrew. exactly you're

the about also beat on performance of the in sales line - the impact half was half quarter, For the timing the strong first and international.

were moderating see those going in to six is to and big the balance the year. versus we seen two the but the still a months. So go Obviously, in performance We better bit of second drivers nine out the little a some to elasticities period. timing strong expect year we see to quarter, the wash do of the last look to we've

and that investment more little But plan. a the we bit we're year bit in to little more that go also improvement a on incrementally have spaced media

business, strength the confidence we're bit the the with say, go would seeing the the in the I us year between, a international little of right? back on So period, what in saw what race, we gives that's improved in to elasticities

Andrew Lazar

I tougher, QX modeling key that. so the I in for shipments to keep XQ? growth and comparisons year are of guess, mind along some Great. puts then, Thanks takes when in pull-forward organic the XQ, And of much. EPS from Thanks the what to into and some ago we're sales with guess with XQ, for

Michele Buck

of well. quarter recall most big the also then our as back out, timing will the inventory look have to shift We're quarter. year probably it piece challenging balance be XQ Yeah, I till going was year. to last the a but

the side range, to we'll pressure put that EPS a quarters. mid-single will laps, look half the And so, And when at more you digit the probably a pretty on lap. out, put, of rest point That tough it's combined that sales and the the from with more standpoint. coming than

Andrew Lazar

Great. Thanks so much.

Operator

comes question the with line from question. your proceed Ken of next Please Our JPMorgan. with Goldman

Ken Goldman

morning. on I had year. it prior if if your five think down I questions right, on to guidance, Hi, could? Two new First, I this lines capacity, come good was for

think now. for some more calling you're I

reading make I'm a also then, in or they So generally terms of thing wrong good to in the that obviously, you. light in was or down already of products just more you one terms just efficiency, that bit in the delayed? plants road I little of capacity acquisitions efficiency. they a But help added bringing am for may And houses learn did Weaver fact how about for curious the is

of of little of road better the bit for down benefits you. Just a you. Thank some trying a the get sense to

Melissa Poole

Sure.

just So of our number there in five think are one There and is no didn't there's remarks. we specifically that out the lines. change call lines I to

that able So, be acquisition. difference Weaver, capacity manufacturing are in growth sufficient plants for so We there. we no feel very years acquired several about Weaver good Relative a to gives really to to SkinnyPop. us things currently two is to of the it us what gives three come. support come and

us can It you the also know, to as with on continue strong very seeing And flexibility support we strong that growth just and provides are resiliency so growth seeing. we are SkinnyPop. that we

are manufacturing as we to have degree network. As some across you least our know, own our categories of strategic business and across do look businesses we at for in, you that like

we about of on it are good that return the needed on own. and the newer the We to made. the we also build cheaper that the assets, at And the that facilities is faster investments pretty side given if feel this believe, than fact we quality our investment

Ken Goldman

Thank you.

Melissa Poole

Sure.

Operator

with with of UBS. line the Ross from comes question proceed Please next your question. Our Cody

Cody Ross

taking question. you Good morning. our Thank for

announced effective can of believe I do the believe the fiscal high-single-digit increase portfolio correct explain versus the at that's what of Day. your on XX% year? the end confection implementing How the you at of benefit will a ‘XX much ‘XX? Analyst fiscal you price May. And mechanics benefit by You're you

Michele Buck

also ’XX. about ‘XX in Investor the we're retailers That’s more of on we And date still Yeah, as based fact promotions implementation in place a have the impact then with implementation. partly talked we the the and in protection year. at high it for it's good big level the have, working is programming for that going in and the part Conference to on than

all of continue. will so, that And

I have mark, able on more talk think, time. more visibility the by mid-year and to to be time I it of both that impacts at the we’ll we ‘XX balance get ‘XX that about

Cody Ross

Great. Thank just you. a on margin. And question quick then, gross

expectation in margin this both gross the came Your yours quarter. higher and street’s than

of of your are Partners, this to basis especially who retail year, for margin You to Thank this early struggling raised gross outlook gives their raise outlook your expand context based year. on your the What to points XX year to the you in confidence you. XX guidance? expansion in

Michele Buck

we Yeah, Yeah or probably year look it our in guidance think, top-line in wouldn’t I the thank this you. general, at bottom-line earlier in raising is the early year.

we be whether stick that a few ingredients some were. things, some that sugar right On able a more that one, in a we that's the Time commodities are to expensive the of than margin will clearly non-test favorable gross around. bit though, to getting are little tell cocoa going and wrong couple it’s have now direction are smaller have more than they side, in particular, moving

increasing and I'll just you downside this year than the at was on forth. pieces and surprises we in contracted recall but so getting that some costs freight costs. that was appointments our we for and up did for chain truck at first when freight least, support and quarter supply the saw also logistics the say for improvement time, and last biggest on one call, And the probably the logistics big, But improvements freight if show both of and

But what first quarter confidence the in in the really captured drivers out. is us the the tell the year as quarter plays really just on are how the that the Time those gives first will outlook. So, we performance. goes rest that's

Cody Ross

you it much. pass Thank along. very I’ll

Operator

question. Our with RBC. from of line next proceed question comes Nick Please Modi with the your

Nick Modi

you. Good thank morning everyone. Yeah,

a number good morning. the saw strong recovery So expectations. just quick comment initiatives was there in very put to of any specific just outside the curious, I'm maybe international, you some more remarks. exactly on clarification. a on of relative in the I prepared context But a On travel. Hey,

And then, kind that the mix, referencing. unclear some of was on You was kind talked that? what's share just in of the the you U.S., what touch if but I market about made you exactly could of commentary driving

Melissa Poole

the Yeah, we've if in in at Easter stronger had a than seen saw we We markets. I anticipated. look international, season we initiatives the category mean strength Brazil across

India. We in continue to and see distribution gains in Mexico also

laps. So, across some some going the has board really demand some resilient. We our forward expect But we do moderation, remained pretty because strong pretty, pretty strength have there.

one more from quarter. that you may if And as outpaced QX, in and can we've we're in timing seeing first shipments also share consumer some recall your repeat question then, And demand recovered some of impacts our the time? you

Nick Modi

was commentary hoping provide You the the I context share had you had I release? some think could on press was I Yeah, remarks just prepared prepared just, in referenced US and the provide mix you that the remarks, But seeing? was some could and context was a I just just share any trends driver you the unclear. of are if market in on you

Melissa Poole

Yeah, absolutely.

that continued also, the then refreshments sweets post-COVID of the see - of those in But that Easter, we growth behind very we constraints. we've from if some definitely will had We we So, look be some And and of to impacts in then at trends also year. that Halloween rebound us. - us. strong and weaker impacted holiday, type impact by anticipate from supply

So really mix as an impact.

Nick Modi

on. Thank you. it pass I’ll Great.

Operator

with Our next Stanley. from Pamela proceed question. Kaufman of question with comes Morgan Please your the line

Pamela Kaufman

morning. good Hi,

Melissa Poole

morning. Good

Michele Buck

Good morning.

Pamela Kaufman

demand growth. hoping what talk about in was the consumer strong seen You've I despite generally of could volumes you're strong kind pricing that you seeing environment?

you the year? are of how thinking elasticities course consumer and the So about the over

Melissa Poole

know and We and bit much to to that food at to those Certainly continue even So, continued pretty strong. do dining has candy consumer broader food changes see compared affordable also specifically know little a in continue elasticities. more out. respond expect food versus have strengthen categories categories, I'll continues performed have about as well for we'll talk a marketplace. certainly And we better behavior we to made to by see consumers continue to to talking it's other elasticities. let their remain And and those elasticities I’ll to spending option that than evolve about in home to perform and snacks that in trends consumers the Steve inflation many the we start

And seeing. are shopping, that activations being Whether about it increasingly are just whether shop. whether really sure our promotion. channels and mindful we in align trends, are options. we constantly in-store those more media to increased the which trends carefully optimized, the they that We and we're its it is can our monitoring are They where for the consumers is to they deals that so looking make know private-label, affordable are

side? elasticity to Steve, the want talk do - you bit about little elasticity a on

Steve Voskuil

a question. this we on our little in elasticity our see to year severely now the moderate how original bit touched first on, in still We as bit in year outlook a out. And plan. But the plays the little that's goes than expect but assumption. we'll We current our did less

Pamela Kaufman

snacks. And ERP within Okay, benefits on just it? on my thank realize Can is guidance what second expect this implementation factored you the the to your from touch you. into And from impact implementation? ERP question you for is year what

Steve Voskuil

Sure.

So, build and back the we the in of some itself in quarters guidance. of the changeover the inventory impact changeover ERP we the that half baked transition year. out the the profiled of the across We have on the into advance then have, including

driving ingredient businesses. efficient In it's scale across terms of to that benefits, critical a

bit a is And forth. Well, all our of system. can the rest capabilities. side, is and important that inventory so visibility the on to get business will chain can to efficiently. supply operate our we operate on operate front-end, touched investor are same of on We the scale efficiently, company system office goal have that this efficiency parts planning drive the in on, one the that the We The front-end of so them on more back conferences.

so And the is integral. so, it

it. Everything that us are we'll year. behind is on to forward We excited to-date this look getting later about track and

Melissa Poole

for half a quarter think the the on last that we point focused out I headwind results. We Pam, the related us transition impact. year called to It's for And call. full the a in about did all might fourth

Pamela Kaufman

Right. Thank you.

Operator

Please ISI. next Our question. with with from comes the of your Evercore question line David Palmer proceed

David Palmer

some for of mentioned you Good ahead In position a prepared color your ‘XX. of be support you morning. fully some It's if production – in demand you you'll good consumer strong I that. expecting of - give Thanks. remarks, morning wonder you're X% to rest to that the about add. in increase that could that mentioned obviously

suppliers coming your in the Is that the So, quick constraints And I labor COVID issues a through? with is follow-up. supply that era upstream chain? have

Melissa Poole

several Investments mean, make driven by capacity. that be them over et it able time increasing up would anticipate take that to some continued Yeah, recovery really running in of is and the the I get past I equipment, get say, we've the some to we years cetera. Obviously, to

ahead. so, the at which that's get we point to And we start believe

think ‘XX of So, anticipate these consistently we've and I pretty about ‘XX, being beyond of we issues. supply end that talked and many

a I I sales capacity. predominantly, were question, not industry the in Certainly, remark. actually clarify, pound maybe in they've the well. is to focused number. I'm the - we even enough that years early other would sure clear It's But on yes, that were some dynamics, just a your been as It's not the X%, mean, there number

of kind ahead up. So guidance what pounds that's X% of growth volume be how calls the well production for catch and that we that in will

David Palmer

capacity you're than with it's new will that I think? that ramping up the ramping plant, for plants of in capacity three the through and Because And X% into wondering increases one the XXXX be more what's it. you impact that do the year. Reese's Hershey Got ‘XX? new the am

Melissa Poole

expansions ‘XX carryover additional will those, well some have capacity coming into online. as we from that There a be as

there as be next low-single-digit a production in year will increase new from some pounds and carryover So available initiatives. well

David Palmer

much. you very Thank

Operator

BNP question question. comes Gumport Paribas. line Max with from proceed your next with Our of the Please

Max Gumport

talking we're like an Hey, to through retailers the back seeing again in see in yourself give It headlines but could like thanks you're manufacturers, hoping I on to to we're food companies you regard seeing the retailer pushing for continuing packaged media what about pricing strong question. environment. was more physically us feels the getting results. quarterly with update pricing

you this us on can hoping seems give color be that just debate some emerging. to So Thanks.

Melissa Poole

partner us. drive do believe with So what to retail category always good consumer our for we growth, which demand to also closely try best customers to of meet we very and is and is both

plans with to to enable very includes our conversion. support also very have right implementations, discussion a discussions have reinvestment with our business to collaborative continue about the will we unit which So strong retailers lot that of pricing of the relative

Max Gumport

gross up seems and outlook. and into look I implies guidance that, is about the in to I'm Thanks your unusual taking if for think the gross realized a of the one and the imply on you it getting margin would follow-up and in results first speaks through some –in like quarter But your sequential year that the is we the at remainder year what after down it question your have margin. some it year, confidence bit seasonality. taking the guidance account step in gross margins even one

assumptions of those be And factors curious what just so, there? might into Thanks. type I'm into going

Steve Voskuil

taking what is play of the it Yeah, the is certainly of cautious But has stock lot a have – first we is is a on we're ahead. there the upsides big volatility over think still also in still biggest early lot changed the in these to still I year. or a being the world to factor and We saw come lot quarters that quarter. so still the potentially we're in out

And so, go And QX that. particularly also, we're factoring the forward, get as tougher. we then laps in

And the the factor guidance. so, that's in other weighing

Max Gumport

Thanks very much.

Steve Voskuil

you. Thank

Operator

America. next question. the your from Bryan question Please Spillane comes line with of Bank proceed with Our of

Bryan Spillane

part ask to right, a more question we in for I move share you Good was through - seasonals And year. wanted talked capacity thanks what talked quarter seasonals think, we've just available market everybody. the the Hey, on constraints. I of operator. about first capacity seasonal, about the, morning, what impacted about as

of the you fall whether and fourth adequately seasonal be or and up sets And supplied you'll talk for like kind just how quarter? the that you about third especially can if with products feel that So there?

Melissa Poole

Yeah, sure.

as So, meet additional holiday Halloween the have that supply up in to shape go we year, with we We and believe the plan will that absolutely. ramping very a through be solid have demand. we that good to

issues So, of should passed we the in be back the during encounter that Easter some half. we

Bryan Spillane

you. Okay. Thank

Operator

Our Please comes Piper your Sandler. Michael question. proceed question Lavery the with of next from line with

Michael Lavery

ability out, had up that obviously kind would color press call caught the far But at just that In into you and early. you morning. drive release, you would you sustain of Good just give you. momentum on eye beyond, a that mentioned Thank how ahead it's XXXX are the to what seeing can about reference you come that and you're thinking now? much that right how XXXX my

Melissa Poole

feel going P&L engagement bit little a the business, good not give in Steve momentum about about I to I’ll going the on not are XXXX. we're component. a really terms talk we seeing talk – we that talk mean, category. high about certainly the mean the I consumer with about of consumers’ But at piece and can of very to level the we're the lot

behaviors CMG, which performance. to of see business on in some we’re as getting that that brands support lot the as media parts, well A mean I making we're good underlying all across the of really. just the sustain seeing behind the salty our investments consumer continue salty. to started we're response We're investments in to where continuing

And in certainly, the saw momentum quarter, international. as strong we first in

suggest hurdles any So signals right us any see big on now, the we that don't big top-line. to

Steve Voskuil

Yeah, off little of next as last – we we've and the have about the standpoint capacity as from excited having at the years available versus bit a that. into the Michelle the point couple would gaps conference ERP in that the that rolling about aspirations of we're back coming the year, of talked had lot salty be said, the we agree. limits I of capacity I a to, more year exit some that just on to

business that conference, growth drive well in more US then particular. to as at in sustainable being that able the help the And talked commercial about the we capabilities

we just reasons it momentum. good some of pretty feel are that the those about the So,

Michael Lavery

No, sort just And – thinking lift How expectations? And then Thank you a further helpful that see go? you. got have least factored that, it into sense think that's what there. a your a about at that. seen you and obviously curious, how just color. at a follow-up specifically and just the on do drive you And of if what's much obviously can guidance the big Day Investor how can - maybe momentum we of strong your around already and very we've think

Melissa Poole

started say in the just good would consumers’ it's with terms feel the and done that we've work about the on We early. relationship understanding We've I know, very dots You of too air. all support dots. the consumer

And so direction, the responsiveness the certainly see and with messaging that across we investments. feel execution good the about to scored we creative incredibly tend categories well our snacking it's advertising and

to share us only that. have that think clearly more in-market in we we that given So will been we actual brand the that as more past. come But we'll in help and results on haven't investing

Michael Lavery

much. so thanks Great, Okay.

Operator

comes question Rob the of line proceed question. with next Jefferies. your from Our Dickerson with Please

Rob Dickerson

great. so easy right, Two of much. kind Thanks All questions.

really in The on obviously pricing incremental side, any first is just see the don’t but international, year-over-year. impressive volume

let push I intentional as that's US? the curious I you've curious complex then to why we're to kind of international of given quick in through that’s it's cost in kind why So follow-up. a the able much just clearly And of have kind am been and just me intentional what not pricing seeing

Steve Voskuil

quarter. by is other we the Sure, just had impact of through through, price that so seeing are in more but on strategy some a in see how quarters. offset pursuing come of next are we're the They having three it’s some international. price price And laps modest should we far. of more what the coming that much in It's we

Rob Dickerson

just and for think I of enough. too, fair popcorn cash gets a lay sheet outlay there balance top-line about been free which and while little kind then, get, - into out next we clearly cash Okay, be incremental in not step cash is flow you Steve ‘XX markets facilities the - year should buying much those think the where bit the if but And a probably back headed strong. CapEx that up to better quickly facilities, decent,

always priorities. kind you your So, of of capital deployment and know standard kind reiterate I issue

- the need you you a spot like probably would or the you're the new terms the cash kind the the good know acquisition Thanks all then for, in you? say broadly other given of the facilities is this dividend CapEx at And being of deployment point on of grow. the let's kind feel there therefore But to and whether being around spent say buyback speaking recent of have new a what in pretty facilities on you it possibility the of kind you new what they or that's popcorn lines

Steve Voskuil

Sure. Yeah, great question.

do that with of And much acquisition for growth fact time we What So cloth. short still is answer additional the building that well-maintained in place will more the place yeah, the the buying business to for support very than we're in - manufacturing also do that – a we coming or good from that, facility. we not is, capacity whole state-of-the-art be we're like feel I helpful come. to doing capital efficient Weaver

pick to way, efficient capital is it so, well. as up assets And this

future. future, we So, the the flow And that the to feel as free going have on business on look we're about and to to look an the capacity cash both good as impact will installed we that confection have business. salty the I

Rob Dickerson

enough. Thank Fair you. Alright.

Steve Voskuil

Thank you.

Operator

Jonathan Our with of Please your question. line next comes the from with proceed Feeney question Consumer Edge.

Jonathan Feeney

driving fate, the comment outsized role at over Thanks the much. distribution last months growth, very to the distribution not really salty XX just you snack but recent volume on business Could growth? in growth of XX

then a I great most into trying these is to there to products others recently when like, you all this whether I'm care Because, dots or Hershey capabilities new guess, necessary into you how take innovation and understand have and it's insight volume what like you of offer salty or may that understand organic us it What to sustainable Thanks. forward? you going think a snack looks slows and down. growth can kind if for about help data seasons that be markets,

Melissa Poole

Yes, absolutely.

we one strengths we utilize and it. business when of to is this. I our distribution a want clearly mean, one, that's buy job fully So, key like

didn't kind a in really dots to on they the northeast. in there have in business Walmart underdeveloped particular, and of fill really Previously, large were were distribution. they opportunities very on So

been you that's driven the at focus So certainly time, strong that same the has repeat this potential in behind the describe growth seen Then But business. are. I the increases we've kind basically of a trajectory, about of as over velocity product. of big has key that will we very it time, a what see given been also drivers terms think - and from in consumers it would of evolve driver the area as

So capability as we fill out the employ the management distribution, we our start shelf. to category optimizing to really relative

in the you As we March, and the focus start key capability beyond to advertising to other other media And that, to is behind kind our then and penetration. price architecture pack of increase saw drivers. brand with then relative really apply household awareness

think for the range Day, continue, the kind Investor will next to few mentioned plus coming but really apply from of other from revenue generate in but it XX% will then, we So, recently. And at capabilities seen percent twenty years. a will see And we anticipate we've we have growth that as seeing the I the we that. that do deceleration more we

Jonathan Feeney

much. very you Thank Much.

Steve Voskuil

Thank you.

Operator

the Our with your Mizuho USA. question. next Please John Baumgartner question from of proceed Securities with comes line

John Baumgartner

the question. morning. Good Thanks for

Steve Voskuil

morning. Good

John Baumgartner

but mass on availability in snacks building here the And sticking ACV building opportunity in significant the as just seems with pretty well. stores, C distribution. John's Maybe another Michelle grocery, and question, focus salty is

to the bit ACV the didn’t routes building velocities categories. these or, that – the makes that Are for model slower path to you dislodging C in any competitors in there DSD stores the given market a whether it's considerations

in you are over how you C Thank Just about closing that stores distribution time? thinking gap you.

Melissa Poole

for and really Well, reaching core realize company consumers and importance specific are consumers in certain we businesses. CMG base the C out Certainly specific store for capability a really core is when our certain occasions about. its

it a for priority So is us.

focused We have on been that.

opportunity SkinnyPop, in But certainly are there's think more making progress. to go. we I

so, I'd done focus convenience forward. Certainly, say who key our a it distribution But more And us there good building we've there folks don't going for broadly. have business, capability DSD know I that with a remain barrier. if CMG it'll in is are where we job have any stores. don't

feel we good So, about very that.

salty really the do the across potential and to utilize best we working we're right have our business. then warehouse And both maximize each now capability. network, we And snacks of optimize DSD to how

John Baumgartner

in capacity, addition the whether then else there? to popcorn that acquiring, And or is anything of pack just the opportunity capabilities growth in your size volume there terms it’s assets pure anything terms Okay. you're of in in augment

Michele Buck

beyond capacity just opportunity network more, optimize the of supply the the chain that and one Yeah, things and the to us gives broadly.

other we talked price think if some the sure to being the right about and business assets to you strategies about architecture, support the So the you are forward. packs if coming potentially we in, have pack think of around to and future, able going make mixes

growth in just that plan. of flexibility all hands, our that deliver having by in our So control, gives more us to and agility

Melissa Poole

ahead capacity mentioned Yeah. do of demand. have we gives And earlier, as that I

the gives for next that years. trajectory us it few So

John Baumgartner

Thanks Steve. Michelle. Thanks

Michele Buck

you. Thank

Operator

line from with question. proceed question English Jason your Please Goldman the next Our Sachs. comes of with

Jason English

Hey, folks. good morning,

Melissa Poole

Good morning.

Jason English

questions. quick couple A

do When like other lot So, going and the near there front a floor, making was there margins some Colgate Weaver anything Is in out term. think we past of would torsion just aware to it be did products created recently that acquisition? something capacity. similar similar came of some on into that buying with to the

Melissa Poole

No, the popcorn. eat bulk ready to I of capacity is mean,

come it overhang. So with didn't big a negative really

Michele Buck

That's right.

Melissa Poole

for that unused fixed there that capacity be there. there's so will excess while, than a overhead some Other

Steve Voskuil

Yeah.

some and portfolio overhang normal. Jason. like a overhead referencing, that cost not fixed would you're But Some be transition

Jason English

if have because as industry has low. comment got left, comment, have you lot for Thanks question, a You've then, bigger you confection know. picture a to price That's we And elasticity mentioned Good been a not cross Hershey of very that. – the by lot a through comment even it’s or like kind quite from ever expecting moving the break at ‘XX past large. you’re the that from a we're of push where, of bit not the pricing quite same sounds and to direction, industry a of in kind it

So, leave And how are where between should to elasticities? tend Which be you watching? see And cross price we it I'll switching category confection? managing you this there.

Steve Voskuil

it's all, of be the starting a would for early say, little I think cross ’XX. to elasticity first about yet to Yeah,

the in about We're cocoa right. like we the watching to terms strategy. think We're talked movements You’re of pricing the of and space and on some earlier upward trying also ahead commodity sugar.

so, other that's to all to be But good And happens us yet peers then and I seen. think is position. categories a starting what the in getting

And the But add? will and that, Melissa back the able obviously to you more turn communicate want do as we half. to you on probably to get be corner

Melissa Poole

a elongated kind add Yeah, might is seasons. that's implement of and it bit piece I to because us slower more the just, with of ours particularly for the come takes is little a timing one through

of, we think we a have outsized pricing, our won't kind of So, an kind about pre-pandemic gap versus versus of levels ‘XX competition. price as lot

them many you teens XX% high XX%. As posting pricing at up see or of versus are

of of ours particularly be closely a little some how is those to is look So it the cross certainly will within, stomach and out. spread snacking But bit we more just and progress. elasticities share watching at where very those going

Jason English

on. lot. point. that's good I’ll it a Yeah, a pass Thanks

Operator

comes your Chris line Securities. Wells Please question. the with Carey Fargo with Our of from next question proceed

Chris Carey

not easing. strongly building. over ago the on and have good for compare, about like the confection Thanks pricing morning. seems this we're very it are a thinking should in pricing Hi, cost a through clearly strong How margins question. just we even certainly year, despite with margins. coming perhaps is be tough confection quarter year as question Very I but time, just

when think of just we inflation helpful. coming sugar, had seeing some would confection be through Thanks just needed again hedges and kind just when it? assess to cocoa trajectory so of be might in and the of you your can might inflation mentioned your so, us I offset And much. be pricing so And those we and duration on remind that margins

Steve Voskuil

the piece take I'll last Sure, first.

see sugar hedging to Just on do our But cocoa We get in we potentially those the and commodities expect some out. do But than duration we hedging. see the specific share on Obviously, play ‘XX. impact ‘XX we the don't more two we'll don't how of markets duration. programs. for

the of price. of our about and is investor pricing conference, time that and also in generally sources. formula part have for margin of talked more see balance we and as both we On accretion want our a mix just part always to the as over growth volume goal That's

margins upward in want to including across architecture pack, the things, to and because of so. part our pricing, our and growth pressure but levers, even confection have margins on so, continue other future, And been that's price put strong, we All formulas mix,

Melissa Poole

continue action. which is we recently one to some our recent that And more lean to sugar see reasons inputs of we cocoa decided rise, that pricing the and into of

Steve Voskuil

That’s right.

Chris Carey

Okay, for that's so much. Thanks it me.

Steve Voskuil

you. Thank

Operator

call We session. to Melissa now back Poole the and over of the have the closing end reached answer question for turn remarks. I’ll

Melissa Poole

and Thanks much us all our for so joining in the company. great the morning Yes. interest this questions continued investment and and

answer you weeks available the I'll Have any follow-ups so coming to additional day. great a have. much. today and So be in may Thanks

Operator

concludes disconnect this conference this your you today's for And may you and lines time. your Thank at participation.

The Hershey Company (HSY) 27 Apr 232023 Q1 Earnings call transcript