v3.25.2
SEGMENT INFORMATION
 6 Months Ended
Jun. 29, 2025
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
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, 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. This includes our business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes our retail operations, including Hershey’s Chocolate World stores in Hershey, Pennsylvania; New York, New York; Las Vegas, Nevada; Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain of the Company’s trademarks and products to third parties around the world.
•North America Salty Snacks – This segment is responsible for our salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks.
•International – International is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. 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, 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 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. These derivatives are recognized at fair market value with the resulting realized and unrealized (gains) losses recognized in unallocated derivative (gains) losses outside of the reporting segment results until the related inventory is sold, at which time the related gains and losses are reallocated to segment income. This enables us to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income.
Certain manufacturing, warehousing, distribution and other activities supporting our global operations are integrated to maximize efficiency and productivity. As a result, assets and capital expenditures are not managed on a segment basis and are not included in the information reported to the CODM for the purpose of evaluating performance or allocating resources. We disclose depreciation and amortization that is generated by segment-specific assets, since these amounts are included within the measure of segment income reported to the CODM.
Our segment net sales and earnings for the three months ended June 29, 2025 and June 30, 2024 were as follows:
For the three months ended June 29, 2025
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$2,085,468 $315,519 $213,731 $2,614,718 
Cost of sales1,274,772 194,534 148,412 
SM&A expense306,767 54,505 45,524 
Total segment income$503,929 $66,480 $19,795 $590,204 
Unallocated corporate expense (1)181,527 
Unallocated mark-to-market losses on commodity derivatives200,727 
Costs associated with business realignment activities (see Note 9)
15,139 
Operating profit$192,811 
Interest expense, net (see Note 4)
46,035 
Other (income) expense, net (see Note 17)
(2,336)
Income before income taxes$149,112 
For the three months ended June 30, 2024
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$1,579,826 $289,894 $204,760 $2,074,480 
Cost of sales862,848 180,282 136,135 
SM&A expense252,482 57,408 43,615 
Total segment income$464,496 $52,204 $25,010 $541,710 
Unallocated corporate expense (1)161,518 
Unallocated mark-to-market losses on commodity derivatives53,371 
Costs associated with business realignment activities (see Note 9)
39,000 
Operating profit$287,821 
Interest expense, net (see Note 4)
41,373 
Other (income) expense, net (see Note 17)
574 
Income before income taxes$245,874 
(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.
Our segment net sales and earnings for the six months ended June 29, 2025 and June 30, 2024 were as follows:
For the six months ended June 29, 2025
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$4,385,608 $593,317 $441,212 $5,420,137 
Cost of sales2,589,848 375,172 302,396 
SM&A expense595,457 109,812 90,295 
Total segment income$1,200,303 $108,333 $48,521 $1,357,157 
Unallocated corporate expense (1)341,952 
Unallocated mark-to-market losses on commodity derivatives412,181 
Costs associated with business realignment activities (see Note 9)
40,992 
Operating profit$562,032 
Interest expense, net (see Note 4)
90,657 
Other (income) expense, net (see Note 17)
(1,391)
Income before income taxes$472,766 
For the six months ended June 30, 2024
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$4,287,136 $565,000 $475,093 $5,327,229 
Cost of sales2,291,239 364,028 316,067 
SM&A expense583,205 110,062 91,266 
Total segment income$1,412,692 $90,910 $67,760 $1,571,362 
Unallocated corporate expense (1)334,419 
Unallocated mark-to-market gains on commodity derivatives(164,644)
Costs associated with business realignment activities (see Note 9)
55,666 
Operating profit$1,345,921 
Interest expense, net (see Note 4)
81,195 
Other (income) expense, net (see Note 17)
32,594 
Income before income taxes$1,232,132 
(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 EndedSix Months Ended
June 29, 2025June 30, 2024June 29, 2025June 30, 2024
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in income$31,545 $38,300 $85,402 $(159,464)
Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income 169,182 15,071 326,779 (5,180)
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses$200,727 $53,371 $412,181 $(164,644)

As of June 29, 2025, the cumulative amount of mark-to-market losses on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $29,683. Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pre-tax losses on commodity derivatives of $1,949 to segment operating results in the next twelve months.

Depreciation and amortization expense included within segment income presented above is as follows:
Three Months EndedSix Months Ended
June 29, 2025June 30, 2024June 29, 2025June 30, 2024
North America Confectionery$72,787 $63,984 $142,560 $126,405 
North America Salty Snacks22,327 19,856 44,173 39,699 
International6,713 6,128 12,898 12,199 
Corporate22,006 20,453 43,766 39,882 
Total$123,833 $110,421 $243,397 $218,185 

Additional information regarding our net sales disaggregated by geographical region is as follows:
Three Months EndedSix Months Ended
June 29, 2025June 30, 2024June 29, 2025June 30, 2024
Net sales:
United States$2,285,230 $1,778,467 $4,752,984 $4,632,899 
All other countries329,488 296,013 667,153 694,330 
Total$2,614,718 $2,074,480 $5,420,137 $5,327,229