The Hershey Company reported its financial results for the third quarter and the nine months ended September 29, 2024, revealing a decline in both net sales and profitability compared to the same periods in 2023.

For Q3 2024, net sales totaled $2,987.5 million, a decrease of 1.4% from $3,030.0 million in Q3 2023. Gross profit fell to $1,232.7 million, down 9.4% from $1,360.3 million, while operating profit decreased by 16.7% to $613.2 million from $735.9 million. Net income for the quarter was $446.3 million, reflecting a 13.9% decline from $518.6 million in the prior year. Diluted earnings per share also decreased to $2.20 from $2.52.

For the nine months ended September 29, 2024, net sales were $8,314.7 million, down 2.3% from $8,507.9 million in the same period of 2023. Gross profit for this period was $3,742.5 million, a decline from $3,874.7 million, while operating profit decreased to $1,959.0 million from $2,096.5 million. Net income for the nine months was $1,424.6 million, down from $1,512.7 million, with diluted earnings per share falling to $7.00 from $7.36.

The decline in sales and profitability was attributed to shifting consumer behavior and macroeconomic pressures, including a significant increase in commodity prices, particularly cocoa, which rose approximately 70% since the beginning of 2024. Despite efforts to mitigate these pressures, overall consumer demand has declined, with U.S. retail takeaway for candy, mint, and gum down 2.6% in Q3 2024.

In terms of strategic developments, Hershey completed the acquisition of Weaver Popcorn Manufacturing, Inc. on May 31, 2023, for $165.8 million, enhancing its capabilities in the salty snacks segment. The company is also implementing the "Advancing Agility & Automation" (AAA) Initiative, which is expected to incur costs of $200 million to $250 million through 2026, with anticipated annual savings of approximately $300 million.

Hershey's financial position showed an increase in cash and cash equivalents to $615.0 million as of September 29, 2024, up from $401.9 million at the end of 2023. Total current assets rose to $3,551.8 million, while total liabilities increased to $8,416.4 million. The company reported a total stockholders' equity of $4,204.9 million, up from $4,099.1 million at year-end 2023.

Overall, Hershey's results reflect challenges in the current market environment, with ongoing evaluations of discretionary spending to maintain liquidity amid potential recession risks.