The Hershey Company (HSY): BCG Matrix [Dec-2025 Updated]

You're looking for a clear, no-nonsense breakdown of The Hershey Company's business portfolio as of late 2025, and honestly, the BCG Matrix is the perfect tool for mapping where they should be spending their capital. We've mapped their key units: the high-flying Salty Snacks, showing 10% net sales growth in Q3, are the clear Stars, while the massive core chocolate business, which banked $571.5 million in segment income that quarter, remains the reliable Cash Cow. Still, the International segment is lagging as a Dog, and newer bets like Sour Strips are Question Marks needing serious investment to catch up in those high-growth snacking areas.

Background of The Hershey Company (HSY)

The Hershey Company (HSY) reported its third-quarter 2025 financial results on October 30, 2025, under the leadership of President and Chief Executive Officer Kirk Tanner. For the third quarter ended September 28, 2025, consolidated net sales reached $3,181.4 million, marking an increase of 6.5% compared to the same period in the prior year. Organic, constant currency net sales for the quarter grew by 6.2%, driven by net price realization of approximately 6 points.

Despite the top-line growth, profitability metrics showed pressure; reported net income for the third quarter was $276.3 million, a decrease of 38.2% year-over-year. Adjusted earnings per share-diluted came in at $1.30, reflecting a decrease of 44.4%. The company raised its full-year 2025 outlook, now anticipating net sales growth of approximately 3%, up from the prior guidance of at least 2%.

Looking at the segments for the third quarter of 2025, Hershey's North America Confectionery segment posted net sales of $2,615.6 million, up 5.6%. However, this segment's margin was 21.8%, a decrease of 750 basis points versus the prior year period. The International segment showed strong growth, with net sales increasing 12.1% to $244.8 million, helped by volume growth in Brazil.

The North America Salty Snacks business demonstrated momentum, with segment net sales increasing 10% in the third quarter, reflecting growth across brands like Dot's, SkinnyPop, and Pirates Foodie. Specific brand strength was evident earlier in the year; for instance, Dot's Homestyle Pretzels retail sales surged 20.7% in the 12-week period ending March 30, 2025, capturing a 337-basis point pretzel category share gain.

The Hershey Company maintains a dominant position in its core market, with its top US chocolate brand, which includes Reese's, commanding nearly 18% of the market and contributing to almost 500 basis points of market share gain since 2015. The company continues to invest strategically, allocating approximately 7% of annual sales, or more than $900 million, to marketing and R&D initiatives. The Hershey Company also noted the impact of the Sour Strips acquisition in its third-quarter results and mentioned its proposed acquisition of LesserEvil.

The Hershey Company (HSY) - BCG Matrix: Stars

The Stars quadrant represents The Hershey Company's business units or products that command a high market share within a high-growth market. These units require significant investment to maintain their leading position and fuel further expansion, often resulting in cash flow neutrality-the money they bring in is largely reinvested to support their growth rate.

The North America Salty Snacks segment is a clear Star performer, demonstrating robust top-line expansion in the third quarter of 2025. This segment is a key driver of The Hershey Company's overall growth strategy, consuming cash for promotion and placement to secure its market leadership.

Performance metrics for the North America Salty Snacks segment in Q3 2025 include:

• Net sales increase: 10.0% versus the prior year period.
• Volume increase: approximately 11 points.
• Segment income: $57.7 million, a 6.9% increase year-over-year.
• Segment margin: 18.0%.

The strength of the segment is further evidenced by retail takeaway data for the 12-week period ended September 28, 2025, in MULO+ w/ Convenience channels, which increased by 14.2% over the prior year period. This significantly outpaces the growth of other major segments within The Hershey Company.

Within this segment, specific brands are acting as category leaders, solidifying The Hershey Company's high market share claims:

The overall momentum in the salty category is strong. Year-to-date, The Hershey Company's salty brands have seen a 9.5% sales increase in convenience stores (C-stores), which is noted as significantly outpacing the total category growth.

Stars like these are where The Hershey Company must continue to invest heavily. If they sustain this success as the high-growth salty snack market eventually matures, these brands are positioned to transition into the Cash Cow quadrant, providing stable, high returns for the enterprise.

The Hershey Company (HSY) - BCG Matrix: Cash Cows

You're looking at the engine room of The Hershey Company's portfolio, the segment that consistently funds the rest of the enterprise. In the BCG framework, these are the established market leaders operating in mature spaces, and for The Hershey Company, that's the North America Confectionery business, encompassing powerhouse brands like Reese's, Hershey's Kisses, and Kit Kat.

This segment embodies the Cash Cow profile perfectly: high market share in a mature category, generating substantial cash flow that supports the entire corporate structure. Even with volume headwinds, the pricing power here is evident.

Here are the core characteristics defining this Cash Cow position, based on recent performance:

• Cash cows are in a position of high market share in a mature market.
• If competitive advantage has been achieved, cash cows have high profit margins and generate a lot of cash flow.
• Because of the low growth, promotion and placement investments are low.
• Investments into supporting infrastructure can improve efficiency and increase cash flow more.
• Cash cows are the products that businesses strive for.

The third quarter of fiscal year 2025 clearly demonstrated this dynamic. Net sales for the North America Confectionery segment hit $2,615.6 million. That's a year-over-year increase of 5.6%. Honestly, that growth wasn't volume-driven; it was almost entirely due to strategic pricing actions.

Here's the quick math on the drivers for that top-line result:

The volume decline of approximately 1 point reflects the expected price elasticity in the market after implementing price increases. Still, the segment's ability to realize approximately 7 points of net price realization shows strong brand equity and pricing power-a hallmark of a true Cash Cow. This pricing power is what keeps the margins high, even as volume softens slightly.

The financial output from this segment is critical. For the third quarter of 2025, the segment income was $571.5 million. What this estimate hides is that this figure represented a 21.2% decrease versus the prior year period, resulting in a segment margin of 21.8%, down 750 basis points. Even with that margin compression-likely due to commodity costs not fully offset by pricing-the absolute dollar amount generated is massive capital for The Hershey Company. This cash flow is what funds the pursuit of Stars and Question Marks.

To put the cash generation into perspective against shareholder returns, The Hershey Company paid dividends totaling $271 million in Q3 2025. That's the core business paying the bills and rewarding investors. The overall 2025 full-year outlook for net sales growth was raised to approximately 3%, largely underpinned by the strength and pricing power demonstrated by this confectionery core.

The segment's performance metrics for Q3 2025 were:

• Segment Income: $571.5 million.
• Segment Margin: 21.8%.
• U.S. Candy, Mint, and Gum (CMG) retail takeaway (12-period ended September 28, 2025): Increased 5.4%.
• CMG Share Performance: Remained largely consistent with the prior year period.

Finance: draft 13-week cash view by Friday.

The Hershey Company (HSY) - BCG Matrix: Dogs

You're looking at the parts of The Hershey Company portfolio that aren't pulling their weight, the ones that require cash or just break even without offering significant growth potential. These are the Dogs, units or products with a low market share and low growth rates.

The overall International segment is positioned as a low-growth area, with a full-year 2025 constant currency net sales growth outlook of only low single digits. This contrasts sharply with the North America Salty Snacks segment, which saw its retail takeaway increase by 11% in Q3 2025, driven by brands like SkinnyPop and Dot's Pretzels. For the International segment, Q3 2025 reported net sales increased 12.1% versus the same period last year, but this was heavily influenced by price realization of approximately 7 points and a shipment shift from Q4, with volume increasing approximately 6%.

Underperforming non-core international markets are evident where competitive pricing pressure is escalating. For instance, net sales trends within the International segment in Q2 2025 reflected softer category growth in Mexico and reduced export demand, even though The Hershey Company continued to gain market share there despite economic challenges. This softness, combined with price elasticity, was expected to cause a deceleration in Q4 2025 performance for the segment. To be fair, Brazil was a bright spot, showing double-digit constant currency net sales growth in Q2 2025. However, the segment as a whole posted a significant financial result in Q3 2025, reporting a $13.6 million loss, a decrease of $27.8 million versus the prior year period, driven by higher commodity and manufacturing costs.

Certain older, smaller confectionery brands that lack significant market share or growth momentum in the highly competitive US market contribute to the overall pressure. The company is losing ground in its core business, as evidenced by the North America Confectionery segment's volume performance. For the first quarter of 2025, the North America Confectionery segment reported a 26.6% decrease in segment income to $696.4 million, resulting in a segment margin of 30.3%, a decrease of 470 basis points year-over-year. This segment's performance is indicative of challenges in established product lines facing intense competition.

Products facing sustained volume declines are a key indicator of the Dog quadrant. The company faced a significant drop in volume in its core business early in the year. Specifically, for the first quarter of 2025, The Hershey Company experienced a 15% decline in sales volumes year-on-year. Furthermore, in the US candy, mint and gum category during Q1 2025, The Hershey Company's market share was down 44 basis points, despite seasonal demand helping consumption slightly exceed expectations. The average quarterly sales volumes for the company have decreased by 4.4% over the last two years.

Here's a quick look at some of the key metrics associated with these lower-performing areas:

The strategic implication for these areas is clear, focusing on minimizing exposure:

• International Segment: Growth trajectory is muted, requiring careful capital allocation.
• Mexico Market: Facing category softness and price elasticity pressures.
• Older US Brands: Losing share in the core everyday chocolate category.
• Volume Declines: Sustained volume loss suggests weak product appeal or pricing mismatch.

The company is actively managing costs, expecting to realize $150 million in net savings for the full year 2025 from its transformation program. Finance: draft 13-week cash view by Friday.

The Hershey Company (HSY) - BCG Matrix: Question Marks

QUESTION MARKS (high growth products (brands), low market share): These are areas where The Hershey Company is actively investing to capture future growth, primarily outside its dominant chocolate core. These units consume cash due to heavy investment but have the potential to become Stars.

The Hershey Company's focus on non-chocolate and better-for-you segments places several key brands and initiatives squarely in the Question Mark quadrant. These areas are characterized by high market growth but where The Hershey Company has not yet achieved market leadership.

Newer, High-Growth Non-Chocolate Acquisitions

Newer, non-chocolate additions are being pushed into high-growth consumer bases. Sour Strips, acquired in November 2024, is a fast-growing sour candy brand. This acquisition provided a 40-basis point benefit to The Hershey Company's North America Confectionery segment net sales in the first quarter of 2025. The strategy here is to rapidly gain share in the trending sour candy space, which is part of the broader sugar confectionery segment holding around 31% of the US confectionery market share.

The company is also focused on building out its better-for-you (BFY) portfolio, which saw revenue rise 12% year-over-year in 2025, now representing 22% of total sales. This aligns with the global BFY snacking market, which has an estimated 8.5% CAGR through 2030.

• Sour Strips acquisition date: November 11, 2024.
• BFY revenue growth in 2025: 12% year-over-year.
• BFY sales as a percentage of total sales in 2025: 22%.

Proposed Acquisition of LesserEvil

The definitive agreement to acquire LesserEvil, a maker of organic snacks, was announced in April 2025. The initial deal value was reported around $750 million. This move is intended to strengthen the better-for-you snacking portfolio, which is a high-growth area. LesserEvil's products, including organic popcorn and puffs, complement existing salty snack brands like SkinnyPop. The investment requires heavy commitment to scale, but LesserEvil's household penetration grew from 5% at the start of 2025 to 8% by the time the acquisition closed in November 2025. The overall North America Salty Snacks division volumes jumped 11% year-on-year in the third quarter of 2025.

Shaq-A-Licious XL Gummies

Shaq-A-Licious XL Gummies, launched in 2024, became The Hershey Company's #1 sweets launch of the year. The brand sold over 11 million units following its initial launch. The introduction of the second generation, sneaker-shaped gummies, shows the need for substantial marketing investment to build on this initial momentum and gain a dominant share in the competitive sweets aisle. While a top launch, its overall market share remains small relative to the core chocolate business, which commands 44% of the US chocolate market.

Overall 'Sweets' Portfolio Performance

The broader non-chocolate confectionary category, which includes sweets and mints, is showing strong growth, contrasting with the core chocolate business. For the 12-week period ending June 29, 2025, The Hershey Company's U.S. candy, mint, and gum (CMG) retail takeaway grew 21.8%. This growth contrasts with the core North America Confectionery business, where volumes actually slipped 1% in the third quarter of 2025, though prices climbed 7%. The company projects overall 2025 net sales growth of about 3%.

The need for heavy investment in these Question Marks is clear, as the company projects its Reported Earnings Per Share for 2025 to be down in the high-40% range.