What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-01 compared with 2024-11-07 · 215 added, 364 removed, 736 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Net sales $ 2,805,419 $ 3,252,749

26 unchanged sentences

(in thousands)

For the Three Months Ended For the Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount

For the Three Months Ended

March 30, 2025 March 31, 2024

Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount

Net income $ 224,203 $ 797,453

15 unchanged sentences

(in thousands, except share data)

September 29, 2024 December 31, 2023

March 30, 2025 December 31, 2024

Current assets:

27 unchanged sentences

Common stock, shares issued:

166,939,511 at September 29, 2024 and December 31, 2023

166,939,511 at March 30, 2025 and December 31, 2024

166,939 166,939

Class B common stock, shares issued:

54,613,514 at September 29, 2024 and December 31, 2023

54,613,514 at March 30, 2025 and December 31, 2024

54,614 54,614

2 unchanged sentences

Treasury—common stock shares, at cost:

19,207,198 at September 29, 2024 and 17,160,099 at December 31, 2023

18,956,021 at March 30, 2025 and 19,169,956 at December 31, 2024

( 2,269,560 ) ( 2,278,551 )

7 unchanged sentences

(in thousands)

Nine Months Ended

September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Operating Activities

5 unchanged sentences

Write-down of equity investments — 31,391

Unrealized gains on derivative contracts ( 200,284 ) —

Unrealized losses (gains) on derivative contracts 270,794 ( 269,582 )

Other 18,272 19,923

10 unchanged sentences

Capital additions (including software) ( 145,527 ) ( 213,304 )

Equity investments in tax credit qualifying partnerships ( 78,196 ) ( 18,132 )

Business acquisitions, net of cash and cash equivalents acquired — ( 165,818 )

Receipts (payments) related to equity investments in tax credit qualifying partnerships 3,558 ( 13,944 )

Other investing activities ( 5,017 ) ( 321 )

1 unchanged sentence

Financing Activities

Net increase in short-term debt 482,767 126,090

Net (decrease) increase in short-term debt ( 1,165,724 ) 569,809

Long-term borrowings, net of debt issuance costs 1,986,026 —

5 unchanged sentences

( 12,573 ) ( 26,404 )

Net cash used in financing activities ( 846,969 ) ( 784,365 )

Net cash provided by (used in) financing activities 537,076 ( 221,655 )

Effect of exchange rate changes on cash and cash equivalents ( 2,266 ) ( 1,408 )

Net increase (decrease) in cash and cash equivalents 213,049 7,363

Net increase in cash and cash equivalents 784,506 118,502

Cash and cash equivalents, beginning of period 730,746 401,902

7 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended September 29, 2024 and October 1, 2023

For the Three Months Ended March 30, 2025 and March 31, 2024

(in thousands)

7 unchanged sentences

Stockholders’

Balance, June 30, 2024

$ — $ 166,939 $ 54,614 $ 1,325,876 $ 4,997,269 $ ( 2,283,219 ) $ ( 251,613 ) $ 4,009,866

Net income 446,301 446,301

Other comprehensive loss ( 507 ) ( 507 )

Dividends (including dividend equivalents):

Common Stock, $ 1.370 per share

( 202,860 ) ( 202,860 )

Class B Common Stock, $ 1.245 per share

( 67,993 ) ( 67,993 )

Stock-based compensation 15,164 15,164

Exercise of stock options and incentive-based transactions 1,895 3,072 4,967

Repurchase of common stock (including excise tax) 31 31

Balance, September 29, 2024

$ — $ 166,939 $ 54,614 $ 1,342,935 $ 5,172,717 $ ( 2,280,116 ) $ ( 252,120 ) $ 4,204,969

Stock Class B

Stock Additional

Capital Retained

Earnings Treasury

Stock Accumulated Other

Comprehensive

(Loss) Income Total

Stockholders’

Balance, July 2, 2023

Balance, December 31, 2024

$ — $ 166,939 $ 54,614 $ 1,377,226 $ 5,698,316 $ ( 2,278,551 ) $ ( 303,890 ) $ 4,714,654

8 unchanged sentences

Exercise of stock options and incentive-based transactions ( 18,736 ) 8,991 ( 9,745 )

Repurchase of common stock (including excise tax) 17 17

Balance, October 1, 2023

Balance, March 30, 2025

$ — $ 166,939 $ 54,614 $ 1,372,137 $ 5,652,065 $ ( 2,269,560 ) $ ( 291,299 ) $ 4,684,896

The Hershey Company | Q3 2024 Form 10-Q | Page 6

THE HERSHEY COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 29, 2024 and October 1, 2023

(in thousands)

Stock Class B

18 unchanged sentences

Repurchase of common stock (including excise tax) ( 498,994 ) ( 498,994 )

Balance, September 29, 2024

$ — $ 166,939 $ 54,614 $ 1,342,935 $ 5,172,717 $ ( 2,280,116 ) $ ( 252,120 ) $ 4,204,969

Stock Class B

Stock Additional

Capital Retained

Earnings Treasury

Stock Accumulated Other

Comprehensive

(Loss) Income Total

Stockholders’

Balance, December 31, 2022

$ — $ 163,439 $ 58,114 $ 1,296,572 $ 3,589,781 $ ( 1,556,029 ) $ ( 252,333 ) $ 3,299,544

Net income 1,512,745 1,512,745

Other comprehensive income 1,686 1,686

Dividends (including dividend equivalents):

Common Stock, $ 3.264 per share

( 484,314 ) ( 484,314 )

Class B Common Stock, $ 2.967 per share

( 166,749 ) ( 166,749 )

Conversion of Class B Common Stock into Common Stock 3,500 ( 3,500 ) —

Stock-based compensation 56,644 56,644

Exercise of stock options and incentive-based transactions ( 31,683 ) 21,858 ( 9,825 )

Repurchase of common stock (including excise tax) ( 242,091 ) ( 242,091 )

Balance, October 1, 2023

Balance, March 31, 2024

$ — $ 166,939 $ 54,614 $ 1,315,813 $ 5,087,126 $ ( 2,285,370 ) $ ( 230,835 ) $ 4,108,287

See Notes to Unaudited Consolidated Financial Statements.

The Hershey Company | Q1 2025 Form 10-Q | Page 6

12 unchanged sentences

The financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of operations, financial position, and cash flows for the indicated periods.

Operating results for the quarter ended September 29, 2024 may not be indicative of the results that may be expected for the year ending December 31, 2024 because of seasonal effects on our business.

Operating results for the quarter ended March 30, 2025 may not be indicative of the results that may be expected for the year ending December 31, 2025 because of seasonal effects on our business.

These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024 (our “2024 Annual Report on Form 10-K”), which provides a more complete understanding of our accounting policies, financial position, operating results and other matters.

1 unchanged sentence

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations .

This ASU requires a buyer in a supplier finance program to disclose qualitative and quantitative information about the program including the program’s nature, activity during the period, changes from period to period and potential magnitude.

ASU 2022-04 is effective for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

A rollforward of obligations during the annual period, including the amount of obligations confirmed and obligations subsequently paid, is effective for annual periods beginning after December 15, 2023 with early adoption permitted.

This ASU should be applied retrospectively to each period in which a balance sheet is presented, except for the amendment on rollforward information, which should be applied prospectively.

We early adopted provisions of this ASU in the fourth quarter of 2022, with the exception of the amendment on rollforward information, which we adopted in the fourth quarter of 2023.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

This ASU requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) rather than adjust them to fair value at the acquisition date.

ASU 2021-08 is effective for annual periods beginning after December 15, 2022 and interim periods within those annual periods.

This ASU should be applied prospectively to business combinations occurring on or after the date of adoption.

As a result, we adopted the provisions of this ASU in the first quarter of 2023.

This new standard was not applicable to the May 2023 acquisition of Weaver Popcorn Manufacturing, Inc.

(“Weaver”) due to no contract assets or liabilities being acquired in this transaction (as discussed in Note 2 );

however, it will be applied in relevant future acquisitions.

The Hershey Company | Q3 2024 Form 10-Q | Page 8

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

2 unchanged sentences

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the update should be applied retrospectively to each period presented in the financial statements.

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

As a result, we intend to adopt the provisions of this ASU in the fourth quarter of 2024.

We adopted the provisions of this ASU in the fourth quarter of 2024 and applied the provisions retrospectively to each period presented in the consolidated financial statements.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

7 unchanged sentences

As a result, we intend to adopt the provisions of this ASU in the fourth quarter of 2025.

The Hershey Company | Q1 2025 Form 10-Q | Page 7

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

This ASU requires entities to disclose certain additional expense information including, among other items, purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each Consolidated Statement of Income expense caption.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and the update should be applied on a prospective basis, with a retrospective application permitted in the financial statements.

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

BUSINESS ACQUISITIONS

Manufacturing Capacity

On May 31, 2023, we completed the acquisition of certain assets that provide additional manufacturing capacity from Weaver, a leader in the production and co-packing of microwave popcorn and ready-to-eat popcorn, and former co-manufacturer of the Company’s SkinnyPop brand.

The initial cash consideration paid for Weaver totaled $ 165,818 and consisted of cash on hand and short-term borrowings.

Acquisition-related costs for the Weaver acquisition were immaterial.

The acquisition has been accounted for as a business combination and, accordingly, Weaver has been included within the North America Salty Snacks segment from the date of acquisition.

The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values and consisted of $ 85,231 to goodwill, $ 79,136 to property, plant and equipment, net and $ 1,451 to other net assets acquired.

The purchase price allocation has been finalized as of the fourth quarter of 2023 and did not include measurement period adjustments.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired.

The goodwill derived from this acquisition is deductible for tax purposes and reflects the value of leveraging our supply chain capabilities to accelerate growth and access to our portfolio of salty snacks products.

LesserEvil, LLC

On March 31, 2025, we entered into a Merger Agreement to acquire LesserEvil, LLC, a privately held company that produces and sells organic popcorn and puffed snack products to retailers and distributors in the United States and Canada, which complements Hershey’s existing product portfolio.

The Merger Agreement contains customary conditions, including, among others, (i) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or order prohibiting the consummation of the transactions contemplated in the Merger Agreement and (iii) the accuracy, to specified degrees, of representations and warranties set forth therein and material compliance with covenants.

If approved, the Company expects the acquisition to close by mid-2025 and will be financed with of cash on hand and short-term borrowings.

On November 8, 2024, we completed the acquisition of the Sour Strips brand from Actual Candy, LLC.

Sour Strips is an emerging sour candy brand and is available in a wide range of food distribution channels in the United States.

The initial cash consideration paid for Sour Strips was deemed immaterial and consisted of cash on hand and short-term borrowings;

however, the Company may be required to pay additional contingent consideration if certain defined targets are met over a multi-year period.

Acquisition-related costs for the Sour Strips acquisition were immaterial.

The acquisition has been accounted for as a business combination and, accordingly, Sour Strips has been included within the North America Confectionery segment from the date of acquisition.

The purchase consideration, inclusive of the acquisition date fair value of the contingent consideration, was allocated to minimal net assets acquired, goodwill and other intangible assets.

The first quarter of 2025 includes an immaterial amount of measurement period adjustments to the initial allocation.

We are in process of evaluating additional information necessary to finalize the valuation of assets acquired and liabilities assumed as of the acquisition date.

We expect to finalize the purchase price allocation by mid-2025.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets).

The goodwill derived from this acquisition is expected to be deductible for tax purposes and reflects the value of leveraging our brand building expertise, commercial capabilities and retail relationships to accelerate growth.

Other intangible assets include trademarks valued at $ 41,800 and customer relationships valued at $ 41,300 .

Trademarks were assigned an estimated useful life of 22 years and customer relationships were assigned estimated useful lives ranging from 14 to 16 years.

The Hershey Company | Q1 2025 Form 10-Q | Page 8

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying value of goodwill by reportable segment for the nine months ended September 29, 2024 are as follows:

The changes in the carrying value of goodwill by reportable segment for the three months ended March 30, 2025 are as follows:

North America Confectionery North America Salty Snacks International Total

1 unchanged sentence

$ 2,032,857 $ 657,001 $ 15,895 $ 2,705,753

Measurement period adjustments 1,382 — — 1,382

Foreign currency translation 463 — 188 651

Balance at September 29, 2024

Balance at March 30, 2025

$ 2,034,702 $ 657,001 $ 16,083 $ 2,707,786

The Hershey Company | Q3 2024 Form 10-Q | Page 9

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset:

September 29, 2024 December 31, 2023

March 30, 2025 December 31, 2024

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

8 unchanged sentences

$ 1,853,530 $ 1,873,866

Total amortization expense for the three months ended September 29, 2024 and October 1, 2023 was $ 19,534 and $ 19,882 , respectively.

Total amortization expense for the nine months ended September 29, 2024 and October 1, 2023 was $ 58,627 and $ 59,620 , respectively.

Total amortization expense for the three months ended March 30, 2025 and March 31, 2024 was $ 20,568 and $ 19,554 , respectively.

SHORT AND LONG-TERM DEBT

5 unchanged sentences

The credit agreements governing the credit facility contain certain financial and other covenants, customary representations, warranties and events of default.

As of September 29, 2024, we were in compliance with all covenants pertaining to the credit facility, and we had no significant compensating balance agreements that legally restricted access to these funds.

As of March 30, 2025, we were in compliance with all covenants pertaining to the credit facility, and we had no significant compensating balance agreements that legally restricted access to these funds.

For more information, refer to the Consolidated Financial Statements included in our 2024 Annual Report on Form 10-K.

2 unchanged sentences

Short-term debt consisted of the following:

September 29, 2024 December 31, 2023

Short-term foreign bank borrowings against lines of credit $ 200,276 $ 192,278

commercial paper 996,127 527,561

Total short-term debt $ 1,196,403 $ 719,839

Weighted average interest rate on outstanding commercial paper 5.1 % 5.4 %

The Hershey Company | Q1 2025 Form 10-Q | Page 9

2 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

March 30, 2025 December 31, 2024

Short-term foreign bank borrowings against lines of credit $ 144,626 $ 161,364

commercial paper — 1,145,612

Total short-term debt $ 144,626 $ 1,306,976

Weighted average interest rate on outstanding commercial paper — % 4.5 %

Long-term Debt

2 unchanged sentences

Maturity Date

September 29, 2024 December 31, 2023

2.050 % Notes

November 15, 2024 300,000 300,000

March 30, 2025 December 31, 2024

0.900 % Notes

7 unchanged sentences

4.550 % Notes (1)

February 24, 2028 500,000 —

4.250 % Notes

May 4, 2028 350,000 350,000

2 unchanged sentences

4.750 % Notes (1)

February 24, 2030 500,000 —

1.700 % Notes

June 1, 2030 350,000 350,000

4.950 % Notes (1)

February 24, 2032 500,000 —

4.500 % Notes

May 4, 2033 400,000 400,000

5.100 % Notes (1)

February 24, 2035 500,000 —

3.375 % Notes

August 15, 2046 300,000 300,000

9 unchanged sentences

Long-term portion $ 5,177,251 $ 3,190,210

(1) During the first quarter of 2025, we issued $ 500,000 of 4.550 % Notes due in February 2028, $ 500,000 of 4.750 % Notes due in February 2030, $ 500,000 of 4.950 % Notes due in February 2032 and $ 500,000 of 5.100 % Notes due in February 2035 (together, the “2025 Notes”).

Proceeds from the issuance of the 2025 Notes, net of discounts and issuance costs, totaled $ 1,986,026 .

The 2025 Notes were issued under a shelf registration on Form S-3 filed in May 2024 that registered an indeterminate amount of debt securities.

Interest Expense

Net interest expense consists of the following:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Interest expense $ 54,916 $ 46,044

19 unchanged sentences

We generally hedge commodity price risks for 3 - to 24 -month periods.

Our open commodity derivative contracts had a notional value of $ 149,616 as of September 29, 2024 and $ 94,917 as of December 31, 2023.

Our open commodity derivative contracts had a notional value of $ 274,738 as of March 30, 2025 and $ 667,421 as of December 31, 2024.

Derivatives used to manage commodity price risk are not designated for hedge accounting treatment.

7 unchanged sentences

The contracts are either designated as cash flow hedges or are undesignated.

The net notional amount of foreign exchange contracts accounted for as cash flow hedges was $ 129,883 at September 29, 2024 and $ 80,068 at December 31, 2023.

The net notional amount of foreign exchange contracts accounted for as cash flow hedges was $ 102,965 at March 30, 2025 and $ 79,028 at December 31, 2024.

The effective portion of the changes in fair value on these contracts is recorded in other comprehensive income and reclassified into earnings in the same period in which the hedged transactions affect earnings.

The net notional amount of foreign exchange contracts that are not designated as accounting hedges was $ 54,442 at September 29, 2024 and $ 13,665 at December 31, 2023.

The net notional amount of foreign exchange contracts that are not designated as accounting hedges was $ 95,887 at March 30, 2025 and $ 123,014 at December 31, 2024.

The change in fair value on these instruments is recorded directly in cost of sales or selling, marketing and administrative (“SM&A”) expense, depending on the nature of the underlying exposure.

7 unchanged sentences

The change in fair value of these derivatives is recorded in selling, marketing and administrative expense, together with the change in the related liabilities.

The notional amount of the contracts outstanding at September 29, 2024 and December 31, 2023 was $ 28,827 and $ 22,867 , respectively.

The notional amount of the contracts outstanding at March 30, 2025 and December 31, 2024 was $ 31,391 and $ 30,524 , respectively.

The Hershey Company | Q1 2025 Form 10-Q | Page 11

2 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of September 29, 2024 and December 31, 2023:

September 29, 2024 December 31, 2023

The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of March 30, 2025 and December 31, 2024:

March 30, 2025 December 31, 2024

Assets (1) Liabilities (1) Assets (1) Liabilities (1)

9 unchanged sentences

Derivative liabilities are classified on our Consolidated Balance Sheets within accrued liabilities and other long-term liabilities.

(2) As of September 29, 2024, amounts reflected on a net basis in assets were assets of $ 31,902 and liabilities of $ 32,667 , which are associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period.

(2) As of March 30, 2025, amounts reflected on a net basis in assets were assets of $ 311,408 and liabilities of $ 74,132 , which are associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period.

The comparable amounts reflected on a net basis in liabilities at December 31, 2024 were assets of $ 533,115 and liabilities of $ 32,998 .

At September 29, 2024 and December 31, 2023, the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively.

At March 30, 2025 and December 31, 2024, the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively.

Income Statement Impact of Derivative Instruments

The effect of derivative instruments on the Consolidated Statements of Income for the three months ended September 29, 2024 and October 1, 2023 was as follows:

Non-designated Hedges Cash Flow Hedges

Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) Gains (losses) reclassified from accumulated OCI (“AOCI”) into income (b)

2024 2023 2024 2023 2024 2023

Commodities futures and options

$ 32,270 $ 17,103 $ — $ — $ — $ —

Foreign exchange contracts 621 ( 583 ) 1,779 2,945 1,714 ( 1,924 )

Interest rate swap agreements

— — — — ( 2,274 ) ( 2,274 )

Deferred compensation derivatives

1,265 ( 1,103 ) — — — —

$ 34,156 $ 15,417 $ 1,779 $ 2,945 $ ( 560 ) $ ( 4,198 )

The Hershey Company | Q3 2024 Form 10-Q | Page 13

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The effect of derivative instruments on the Consolidated Statements of Income for the nine months ended September 29, 2024 and October 1, 2023 was as follows:

The effect of derivative instruments on the Consolidated Statements of Income for the three months ended March 30, 2025 and March 31, 2024 was as follows:

Non-designated Hedges Cash Flow Hedges

13 unchanged sentences

Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense.

The amount of pre-tax net losses on derivative instruments, including interest rate swap agreements and foreign currency forward exchange contracts expected to be reclassified into earnings in the next 12 months was approximately $ 6,644 as of September 29, 2024.

The Hershey Company | Q1 2025 Form 10-Q | Page 12

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The amount of pre-tax net loss on derivative instruments, including interest rate swap agreements and foreign currency forward exchange contracts expected to be reclassified into earnings in the next 12 months was approximately $ 5,361 as of March 30, 2025.

This amount is primarily associated with interest rate swap agreements.

5 unchanged sentences

We did no t have any Level 3 financial assets or liabilities, nor were there any transfers between levels during the periods presented.

The Hershey Company | Q3 2024 Form 10-Q | Page 14

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of September 29, 2024 and December 31, 2023:

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of March 30, 2025 and December 31, 2024:

Assets / Liabilities

Level 1 Level 2 Level 3 Total

September 29, 2024:

March 30, 2025:

Derivative Instruments:

Foreign exchange contracts (1) $ — $ 5,225 $ — $ 5,225

Deferred compensation derivatives (2) $ — $ 1,265 $ — $ 1,265

Commodities futures and options (3) $ 242,791 $ — $ — $ 242,791

Foreign exchange contracts (1) $ — $ 1,545 $ — $ 1,545

Deferred compensation derivatives (2) — 1,886 — 1,886

Commodities futures and options (3) $ 8,424 $ — $ — $ 8,424

9 unchanged sentences

(3) The fair value of commodities futures and options contracts is based on quoted market prices.

The Hershey Company | Q1 2025 Form 10-Q | Page 13

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Other Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximated fair values as of September 29, 2024 and December 31, 2023 because of the relatively short maturity of these instruments.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximated fair values as of March 30, 2025 and December 31, 2024 because of the relatively short maturity of these instruments.

The estimated fair value of our long-term debt is based on quoted market prices for similar debt issues and is, therefore, classified as Level 2 within the valuation hierarchy.

1 unchanged sentence

Fair Value Carrying Value

September 29, 2024 December 31, 2023 September 29, 2024 December 31, 2023

March 30, 2025 December 31, 2024 March 30, 2025 December 31, 2024

Current portion of long-term debt $ 600,324 $ 597,547 $ 603,617 $ 604,965

1 unchanged sentence

Total $ 5,379,251 $ 3,331,869 $ 5,780,868 $ 3,795,175

The Hershey Company | Q3 2024 Form 10-Q | Page 15

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Other Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, GAAP requires that, under certain circumstances, we also record assets and liabilities at fair value on a nonrecurring basis.

In connection with the acquisition of Weaver in May 2023, as discussed in Note 2 , we used valuation techniques to determine fair value, with the primary technique being the cost approach to value personal property, which uses significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.

2024 Activity

In connection with the acquisition of Sour Strips in 2024, as discussed in Note 2 , we used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis and the relief-from-royalty, a form of the multi-period excess earnings, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.

Additionally, we estimated the fair value of the contingent consideration using a Monte Carlo simulation model.

We lease office and retail space, warehouse and distribution facilities, land, vehicles, and equipment.

16 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

The components of lease expense for the three months ended September 29, 2024 and October 1, 2023 were as follows:

The components of lease expense for the three months ended March 30, 2025 and March 31, 2024 were as follows:

Three Months Ended

Lease expense Classification September 29, 2024 October 1, 2023

Operating lease cost Cost of sales or SM&A (1) $ 13,678 $ 12,101

Finance lease cost:

Amortization of ROU assets Depreciation and amortization (1) 2,133 1,849

Interest on lease liabilities Interest expense, net 1,140 1,095

Net lease cost (2) $ 16,951 $ 15,045

The components of lease expense for the nine months ended September 29, 2024 and October 1, 2023 were as follows:

Nine Months Ended

Lease expense Classification September 29, 2024 October 1, 2023

Lease expense Classification March 30, 2025 March 31, 2024

Operating lease cost Cost of sales or SM&A (1) $ 14,211 $ 12,215

6 unchanged sentences

Information regarding our lease terms and discount rates were as follows:

September 29, 2024 December 31, 2023

March 30, 2025 December 31, 2024

Weighted-average remaining lease term (years)

4 unchanged sentences

Finance leases 6.3 % 6.3 %

The Hershey Company | Q3 2024 Form 10-Q | Page 17

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Supplemental balance sheet information related to leases were as follows:

Leases Classification September 29, 2024 December 31, 2023

Leases Classification March 30, 2025 December 31, 2024

Operating lease ROU assets Other non-current assets $ 357,070 $ 337,739

8 unchanged sentences

Total lease liabilities $ 437,703 $ 419,205

The maturities of our lease liabilities as of September 29, 2024 were as follows:

The Hershey Company | Q1 2025 Form 10-Q | Page 15

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The maturities of our lease liabilities as of March 30, 2025 were as follows:

Operating leases Finance leases Total

9 unchanged sentences

Supplemental cash flow and other information related to leases were as follows:

Nine Months Ended

September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Cash paid for amounts included in the measurement of lease liabilities:

5 unchanged sentences

Finance leases 62 983

The Hershey Company | Q3 2024 Form 10-Q | Page 18

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

8 unchanged sentences

We regularly review our investments and adjust accordingly for capital contributions, dividends received and other-than-temporary impairments.

Total investments in unconsolidated affiliates were $ 207,855 and $ 207,177 as of September 29, 2024 and December 31, 2023, respectively.

Total investments in unconsolidated affiliates were $ 209,578 and $ 212,928 as of March 30, 2025 and December 31, 2024, respectively.

The Hershey Company | Q1 2025 Form 10-Q | Page 16

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

BUSINESS REALIGNMENT ACTIVITIES

1 unchanged sentence

Advancing Agility & Automation Initiative

On February 2, 2024, the Board of Directors of the Company (the “Board” or “Board of Directors”) approved a multi-year productivity initiative (“Advancing Agility & Automation” or "AAA") to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes, and generate long-term savings.

On February 2, 2024, the Board of Directors of the Company approved a multi-year productivity initiative (“Advancing Agility & Automation Initiative” or "AAA Initiative") to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes, and generate long-term savings.

The Company estimates that the AAA Initiative will result in total pre-tax costs of $ 200,000 to $ 250,000 from inception through 2026.

2 unchanged sentences

The cash portion of the total cost is estimated to be $ 175,000 to $ 225,000 .

At the conclusion of the program in 2026, ongoing annual savings are expected to be approximately $ 300,000 .

Since inception through September 29, 2024, we recognized total costs associated with the AAA Initiative of $ 104,795 .

At the conclusion of the program in 2026, ongoing annual savings are expected to be approximately $ 300,000 to $ 350,000 .

Since inception through March 30, 2025, we recognized total costs associated with the AAA Initiative of $ 143,390 .

These charges predominantly included employee severance and related separation benefits related to workforce reductions and third-party costs supporting the design and implementation of the new organizational structure, as well as technology capability costs.

1 unchanged sentence

However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs.

2020 International Optimization Program

In the fourth quarter of 2020, we commenced a program (“International Optimization Program”) to streamline resources and investments in select international markets, including the optimization of our China operating model that will improve our operational efficiency and provide for a strong, sustainable and simplified base going forward.

The International Optimization Program was originally expected to total pre-tax costs of $ 50,000 to $ 75,000 , with cash costs in the range of $ 40,000 to $ 65,000 , primarily related to workforce reductions of approximately 350 positions outside of the United States, costs to consolidate and relocate production, and third-party costs incurred to execute these activities.

The costs and related benefits of the International Optimization Program relate to the International

The Hershey Company | Q3 2024 Form 10-Q | Page 19

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs.

For the nine months ended October 1, 2023, we recognized total costs associated with the International Optimization Program of $ 3,440 .

From program inception in 2020 through completion in 2023, we incurred pre-tax charges to execute the program totaling $ 53,799 .

Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Cost of sales $ — $ 2,612

2 unchanged sentences

Costs associated with business realignment activities $ 25,854 $ 16,666

Costs recorded by program during the three and nine months ended September 29, 2024 and October 1, 2023 related to these activities were as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Costs recorded by program during the three months ended March 30, 2025 and March 31, 2024 related to these activities were as follows:

Three Months Ended

March 30, 2025 March 31, 2024

Advancing Agility & Automation Initiative:

1 unchanged sentence

Other program costs 9,480 16,666

International Optimization Program:

Severance and employee benefit costs $ — $ — $ — $ 441

Other program costs — ( 426 ) — 2,999

Total $ 25,854 $ 16,666

The following table presents the liability activity for costs qualifying as exit and disposal costs for the nine months ended September 29, 2024:

The following table presents the liability activity for costs qualifying as exit and disposal costs for the three months ended March 30, 2025:

The Hershey Company | Q1 2025 Form 10-Q | Page 17

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Liability balance at December 31, 2024 (1)

1 unchanged sentence

Cash payments ( 5,412 )

Liability balance at September 29, 2024 (1)

Liability balance at March 30, 2025 (1)

(1) The liability balances reflected above are reported within accrued liabilities and other long-term liabilities.

(2) The costs reflected in the liability roll-forward represent employee-related charges.

The Hershey Company | Q3 2024 Form 10-Q | Page 20

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The majority of our taxable income is generated in the United States and taxed at the United States statutory rate of 21 %.

The effective tax rates for the nine months ended September 29, 2024 and October 1, 2023 were 18.6 % and 18.3 %, respectively.

Relative to the statutory rate, the 2024 effective tax rate was primarily impacted by investment tax credits partially offset by state taxes.

The effective tax rates for the three months ended March 30, 2025 and March 31, 2024 were 30.7 % and 19.1 %, respectively.

Relative to the statutory rate, the 2025 effective tax rate was primarily impacted by foreign rate differential and state taxes.

The Company and its subsidiaries file tax returns in the United States, including various state and local returns, and in other foreign jurisdictions.

4 unchanged sentences

We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $ 17,885 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law.

The IRA enacted a 15% corporate minimum tax on certain corporations and an excise tax on share repurchases after December 31, 2022, and created and extended certain energy-related tax credits and incentives.

For the nine months ended September 29, 2024 and October 1, 2023 the tax-related provisions of the IRA did not have a material impact on our consolidated financial statements, including our annual effective tax rate, or on our liquidity.

The Hershey Company | Q3 2024 Form 10-Q | Page 21

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

Net Periodic Benefit Cost

The components of net periodic benefit cost for the three months ended September 29, 2024 and October 1, 2023 were as follows:

The components of net periodic benefit cost for the three months ended March 30, 2025 and March 31, 2024 were as follows:

Pension Benefits Other Benefits

Three Months Ended Three Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Service cost $ 3,827 $ 3,747 $ 33 $ 57

Interest cost 9,662 10,259 1,215 1,794

Expected return on plan assets ( 12,800 ) ( 12,275 ) — —

Amortization of prior service credit ( 1,374 ) ( 1,414 ) ( 38 ) ( 13 )

Amortization of net loss (gain) 3,814 4,974 138 ( 242 )

Settlement loss — 943 — 926

Total net periodic benefit cost $ 3,129 $ 6,234 $ 1,348 $ 2,522

We made contributions of $ 1,134 and $ 3,498 to the pension plans and other benefits plans, respectively, during the third quarter of 2024.

In the third quarter of 2023, we made contributions of $ 987 and $ 5,314 to our pension plans and other benefit plans, respectively.

The contributions in 2024 and 2023 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans.

The components of net periodic benefit cost for the nine months ended September 29, 2024 and October 1, 2023 were as follows:

Pension Benefits Other Benefits

Nine Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Service cost $ 3,502 $ 3,849 $ 27 $ 34

3 unchanged sentences

Amortization of net loss (gain) 3,553 3,813 315 139

Settlement loss — 5,332 — 926

Total net periodic benefit cost $ 3,375 $ 3,168 $ 1,474 $ 1,353

We made contributions of $ 2,120 and $ 7,980 to the pension plans and other benefits plans, respectively, during the first nine months of 2024.

In the first nine months of 2023, we made contributions of $ 4,849 and $ 16,224 to our pension plans and other benefit plans, respectively.

We made contributions of $ 689 and $ 2,437 to the pension plans and other benefits plans, respectively, during the first quarter of 2025.

In the first quarter of 2024, we made contributions of $ 816 and $ 1,592 to our pension plans and other benefit plans, respectively.

The contributions in 2025 and 2024 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans.

The non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans is reflected within other (income) expense, net in the Consolidated Statements of Income (see Note 17 ).

The Hershey Company | Q1 2025 Form 10-Q | Page 18

2 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

Annuitization of Other Post Employment Benefits

On August 21, 2023, the Hershey Employee Benefits Committee approved the purchase of an irrevocable group annuity contract with an insurance company for eligible retirees of The Hershey Company Retiree Medical and Life Insurance Plan to cover their medical benefits.

On August 31, 2023, we paid $ 88,689 for the irrevocable group annuity contract.

As a result of this transaction, we remeasured the projected benefit obligation and recognized a $ 926 non-cash pre-tax settlement charge during the quarter ended October 1, 2023

STOCK COMPENSATION PLANS

15 unchanged sentences

For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Pre-tax compensation expense

2 unchanged sentences

Compensation expenses for stock compensation plans are primarily included in SM&A expense.

As of September 29, 2024, total stock-based compensation expense related to non-vested awards not yet recognized was $ 74,980 and the weighted-average period over which this amount is expected to be recognized was approximately 1.8 years.

The Hershey Company | Q3 2024 Form 10-Q | Page 23

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

As of March 30, 2025, total stock-based compensation expense related to non-vested awards not yet recognized was $ 105,959 and the weighted-average period over which this amount is expected to be recognized was approximately 2.1 years.

Stock Options

3 unchanged sentences

Expense for stock options is based on grant date fair value and recognized on a straight-line method over the vesting period, net of estimated forfeitures.

A summary of activity relating to grants of stock options for the period ended September 29, 2024 is as follows:

The Hershey Company | Q1 2025 Form 10-Q | Page 19

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

A summary of activity relating to grants of stock options for the period ended March 30, 2025 is as follows:

Stock Options Shares Weighted-Average

2 unchanged sentences

Outstanding at beginning of year 579,834 $ 106.73 2.7 years

Granted 2,455 $ 192.49

Exercised ( 30,277 ) $ 101.12

Forfeited ( 1,555 ) $ 147.98

Expired ( 1,565 ) $ 147.98

Outstanding as of September 29, 2024

Outstanding as of March 30, 2025

549,557 $ 107.04 2.5 years $ 35,081

Options exercisable as of September 29, 2024

Options exercisable as of March 30, 2025

544,098 $ 105.93 2.4 years $ 35,081

The weighted-average fair value of options granted was $ 45.95 and $ 57.65 per share for the periods ended September 29, 2024 and October 1, 2023, respectively.

No options were granted for the period ended March 30, 2025.

The weighted-average fair value of options granted was $ 45.95 per share for the period ended March 31, 2024.

The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions:

Nine Months Ended

September 29, 2024 October 1, 2023

Three Months Ended

March 31, 2024

Dividend yields

2 unchanged sentences

Expected term in years 6.3

The total intrinsic value of options exercised was $ 13,327 and $ 34,060 for the periods ended September 29, 2024 and October 1, 2023, respectively.

The total intrinsic value of options exercised was $ 1,833 and $ 4,148 for the periods ended March 30, 2025 and March 31, 2024, respectively.

Performance Stock Units and Restricted Stock Units

7 unchanged sentences

For performance-based condition components, we estimate the probability that the performance conditions will be achieved each quarter and adjust compensation expenses accordingly.

The performance scores of PSU grants during the nine months ended September 29, 2024 and October 1, 2023 can range from 0 % to 250 % of the targeted amounts.

The Hershey Company | Q3 2024 Form 10-Q | Page 24

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The performance scores of PSU grants during the three months ended March 30, 2025 and March 31, 2024 can range from 0 % to 250 % of the targeted amounts.

We recognize the compensation expenses associated with PSUs ratably over the three-year term.

1 unchanged sentence

The grant date fair value of PSUs is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s Common Stock on the date of grant for performance-based components.

During the nine months ended September 29, 2024 and October 1, 2023, we awarded RSUs to certain executive officers and other key employees under the EICP.

During the three months ended March 30, 2025 and March 31, 2024, we awarded RSUs to certain executive officers and other key employees under the EICP.

We also awarded RSUs to non-employee directors.

We recognize the compensation expenses associated with employee RSUs over a specified award vesting period based on the grant date fair value of our Common Stock.

We recognize expense for employee RSUs based on the straight- line method.

We recognize expense for employee RSUs based on the straight-

The Hershey Company | Q1 2025 Form 10-Q | Page 20

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

The compensation expenses associated with non-employee director RSUs is recognized ratably over the vesting period, net of estimated forfeitures.

A summary of activity relating to grants of PSUs and RSUs for the period ended September 29, 2024 is as follows:

A summary of activity relating to grants of PSUs and RSUs for the period ended March 30, 2025 is as follows:

Performance Stock Units and Restricted Stock Units

7 unchanged sentences

( 27,134 ) $ 204.08

Outstanding as of September 29, 2024

Outstanding as of March 30, 2025

737,845 $ 188.55

2 unchanged sentences

In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component using the Monte Carlo simulation model on the date of grant.

Nine Months Ended

September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Units granted

6 unchanged sentences

Expected volatility 21.7 % 18.5 %

The fair value of shares vested totaled $ 90,372 and $ 103,600 for the periods ended September 29, 2024 and October 1, 2023, respectively.

Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 254,757 units as of September 29, 2024.

The fair value of shares vested totaled $ 46,251 and $ 84,998 for the periods ended March 30, 2025 and March 31, 2024, respectively.

Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 244,525 units as of March 30, 2025.

Each unit is equivalent to one share of the Company’s Common Stock.

4 unchanged sentences

SEGMENT INFORMATION

The Company reports its operations through three reportable segments:

The Company reports its operations through three segments:

(i) North America Confectionery, (ii) North America Salty Snacks and (iii) International.

This organizational structure aligns with how our CODM manages our business, including resource allocation and performance assessment, and further aligns with our product categories and the key markets we serve.

This organizational structure aligns with how our CODM, Michele Buck, Chairman of the Board, President, and Chief Executive Officer, manages our business, including resource allocation and performance assessment, and further aligns with our product categories and the key markets we serve.

• North America Confectionery – This segment is responsible for our traditional chocolate and non-chocolate confectionery market position in the United States and Canada.

8 unchanged sentences

We currently have operations and manufacture product in Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Asia, Latin America, Middle East, Europe, Africa and other regions.

For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources.

For segment reporting purposes, the CODM uses “segment income” to evaluate segment performance and allocate resources, including considering budget-to-actual variances and prior year-to-actual variances on a monthly basis.

Segment income excludes unallocated general corporate administrative expenses, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs and other unusual gains or losses that are not part of our measurement of segment performance.

These items of our operating income are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM as well as the measure of segment performance used for incentive compensation purposes.

These items of our operating profit are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM as well as the measure of segment performance used for incentive compensation purposes.

As discussed in Note 5 , derivatives used to manage commodity price risk are not designated for hedge accounting treatment.

9 unchanged sentences

Our segment net sales and earnings were as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

North America Confectionery $ 2,477,303 $ 2,457,647 $ 6,764,439 $ 6,902,891

North America Salty Snacks 291,835 345,182 856,835 887,532

International 218,356 227,158 693,449 717,458

Total $ 2,987,494 $ 3,029,987 $ 8,314,723 $ 8,507,881

Segment income:

North America Confectionery $ 724,822 $ 847,469 $ 2,137,514 $ 2,392,397

North America Salty Snacks 53,977 57,389 144,887 147,934

International 14,207 31,688 81,967 127,838

For the three months ended

March 30, 2025

North America Confectionery North America Salty Snacks International Total

Net sales $ 2,300,140 $ 277,798 $ 227,481 $ 2,805,419

Cost of sales 1,315,076 180,638 153,984

SM&A expense 288,690 55,307 44,771

Total segment income $ 696,374 $ 41,853 $ 28,726 $ 766,953

Unallocated corporate expense (1) 160,425

Unallocated mark-to-market (gains) losses on commodity derivatives ( 31,083 ) 1,753 ( 195,727 ) 5,217

Unallocated mark-to-market losses on commodity derivatives 211,453

Costs associated with business realignment activities (see Note 9 )

49,129 ( 426 ) 104,795 3,440

Operating profit $ 369,221

Interest expense, net (see Note 4 )

44,316 39,755 125,511 114,101

Other (income) expense, net (see Note 17 )

50,101 42,781 82,695 130,248

Income before income taxes $ 323,654

For the three months ended

March 31, 2024

North America Confectionery North America Salty Snacks International Total

Net sales $ 2,707,310 $ 275,106 $ 270,333 $ 3,252,749

Cost of sales 1,428,391 183,747 179,932

SM&A expense 330,724 52,654 47,651

Total segment income $ 948,195 $ 38,705 $ 42,750 $ 1,029,650

Unallocated corporate expense (1) 172,899

Unallocated mark-to-market gains on commodity derivatives ( 218,015 )

Costs associated with business realignment activities (see Note 9 )

Operating profit $ 1,058,100

Interest expense, net (see Note 4 )

Other (income) expense, net (see Note 17 )

Income before income taxes $ 986,258

(1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, (d) acquisition and integration-related costs, and (e) other gains or losses that are not integral to segment performance.

Activity within the unallocated mark-to-market adjustment for commodity derivatives is as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in income $ 53,857 $ ( 197,764 )

1 unchanged sentence

Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses $ 211,453 $ ( 218,015 )

As of September 29, 2024, the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $ 145,520 .

As of March 30, 2025, the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $ 198,776 .

Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pre-tax gains on commodity derivatives of $ 163,720 to segment operating results in the next twelve months.

4 unchanged sentences

Depreciation and amortization expense included within segment income presented above is as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

North America Confectionery $ 69,773 $ 62,421

4 unchanged sentences

Additional information regarding our net sales disaggregated by geographical region is as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

United States $ 2,467,754 $ 2,854,432

3 unchanged sentences

A summary of our treasury stock activity is as follows:

Nine Months Ended September 29, 2024

Three Months Ended March 30, 2025

Shares Dollars

Shares repurchased in the open market under pre-approved share repurchase programs 2,022,064 $ 400,000

Shares repurchased in the open market to replace Treasury Stock issued for stock options and incentive compensation 483,033 94,191

Total share repurchases 2,505,097 494,191

Shares issued for stock options and incentive compensation ( 213,935 ) $ ( 8,991 )

Total net share repurchases 2,047,099 475,133

Excise tax associated with net share repurchases (1) — 4,751

Net change 2,047,099 $ 479,884

(1) A corresponding liability for excise tax associated with net share repurchases is classified on our Consolidated Balance Sheets within accrued liabilities.

In February 2023, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the Milton Hershey School Trust (the “School Trust”), pursuant to which the Company purchased 1,000,000 shares of the Company’s Common Stock from the School Trust at a price equal to $ 239.91 per share, for a total purchase price of $ 239,910 .

The Hershey Company | Q3 2024 Form 10-Q | Page 28

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

In July 2018, our Board of Directors approved a $ 500 million share repurchase authorization to repurchase shares of our Common Stock.

As a result of the February 2023 Stock Purchase Agreement with Hershey Trust Company, as trustee for the School Trust, the July 2018 share repurchase authorization was completed.

In May 2021, our Board of Directors approved an additional $ 500 million share repurchase authorization, which was completed as of March 31, 2024.

In May 2021, our Board of Directors approved a $ 500 million share repurchase authorization, which was completed as of March 31, 2024.

In December 2023, our Board of Directors approved an additional $ 500 million share repurchase authorization.

16 unchanged sentences

Three Months Ended

September 29, 2024 October 1, 2023

Common Stock Class B Common Stock Common Stock Class B Common Stock

Basic earnings per share:

Allocation of distributed earnings (cash dividends paid) $ 202,390 $ 67,993 $ 178,573 $ 59,146

Allocation of undistributed earnings 131,726 44,192 211,085 69,773

Total earnings—basic $ 334,116 $ 112,185 $ 389,658 $ 128,919

Denominator (shares in thousands):

Total weighted-average shares—basic 147,938 54,614 150,116 54,614

Earnings Per Share—basic $ 2.26 $ 2.05 $ 2.60 $ 2.36

Diluted earnings per share:

Allocation of total earnings used in basic computation $ 334,116 $ 112,185 $ 389,658 $ 128,919

Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 112,185 — 128,919 —

Reallocation of undistributed earnings — ( 107 ) — ( 264 )

Total earnings—diluted $ 446,301 $ 112,078 $ 518,577 $ 128,655

Denominator (shares in thousands):

Number of shares used in basic computation 147,938 54,614 150,116 54,614

Weighted-average effect of dilutive securities:

Conversion of Class B common stock to Common shares outstanding 54,614 — 54,614 —

Employee stock options 283 — 400 —

Performance and restricted stock units 195 — 358 —

Total weighted-average shares—diluted 203,030 54,614 205,488 54,614

Earnings Per Share—diluted $ 2.20 $ 2.05 $ 2.52 $ 2.36

The earnings per share calculations for the three months ended September 29, 2024 and October 1, 2023 excluded 12 and 8 stock options (in thousands), respectively, that would have been antidilutive.

The Hershey Company | Q3 2024 Form 10-Q | Page 30

THE HERSHEY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Nine Months Ended

September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

Common Stock Class B Common Stock Common Stock Class B Common Stock

19 unchanged sentences

Earnings Per Share—diluted $ 1.10 $ 1.03 $ 3.89 $ 3.63

The earnings per share calculations for the nine months ended September 29, 2024 and October 1, 2023 excluded 13 and 12 stock options (in thousands), respectively, that would have been antidilutive.

The earnings per share calculations for the three months ended March 30, 2025 and March 31, 2024 excluded 27 and 12 stock options (in thousands), respectively, that would have been antidilutive.

The Hershey Company | Q1 2025 Form 10-Q | Page 25

5 unchanged sentences

A summary of the components of other (income) expense, net is as follows:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

Write-down of equity investments in partnerships qualifying for historic and renewable energy tax credits (see Note 8 )

$ 49,626 $ 38,058 $ 81,017 $ 115,418

Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans (see Note 11 )

617 4,952 1,852 15,824

Other (income) expense, net ( 375 ) ( 9 )

6 unchanged sentences

The components of certain asset accounts included within our Consolidated Balance Sheets are as follows:

September 29, 2024 December 31, 2023

March 30, 2025 December 31, 2024

Raw materials $ 767,802 $ 477,592

28 unchanged sentences

The components of certain liability and stockholders’ equity accounts included within our Consolidated Balance Sheets are as follows:

September 29, 2024 December 31, 2023

March 30, 2025 December 31, 2024

Accounts payable:

22 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements