The paragraph introduces the Hershey Company's Third Quarter 2024 Earnings Q&A session. Anoori Naughton, the Senior Director of Investor Relations, welcomes participants and mentions the availability of the company's press release, prerecorded management remarks, and transcripts on their website. The session will include a live Q&A with Hershey's Chairman and CEO Michele Buck, and Senior Vice President and CFO Steve Voskuil. Anoori notes that forward-looking statements may be made, which have associated risks and uncertainties detailed in the press release and SEC filings. Certain non-GAAP financial measures will also be discussed, with reconciliations provided in the press release.

The paragraph is a transcript from a question-and-answer session of a financial call. Ken Goldman from JPMorgan asks about expected top-line growth and pricing for the next year. Steven Voskuil responds that their long-term growth algorithm targets a 2-4% increase in the top line and expects next year's pricing to be similar to this year's, taking into account price increases and competitiveness. He also mentions they expect historical elasticity to continue. Andrew Lazar from Barclays then asks about core chocolate market share trends, seeking to understand if market share can stabilize by year-end.

Michele Buck discusses the positive outlook for the chocolate and snack categories, noting consistent growth around 2%, which outpaces other snack categories. She highlights recent improvements in market share momentum, driven by successful innovations and strategies, such as the strong performance during Halloween and a reversal in trends for products like SkinnyPop. Buck also mentions future optimism due to factors like a longer Easter season and diminishing retailer inventory problems, suggesting a potential rebound in market conditions moving into next year.

The paragraph discusses a gradual improvement expected in the company's portfolio, with instant consumable products in convenience stores facing pressure until midyear. The interview includes Andrew Lazar asking about the new head of North America Confectionery, Mike, who brings valuable external perspective from PepsiCo and a strong background in customer relations and retail. Michele Buck believes Mike will help unlock new growth and adapt the portfolio to changing consumer channels. The conversation shifts to Peter Galbo asking Steve Voskuil about the expectation of inflation being a greater headwind in 2025 compared to 2024.

The paragraph discusses the financial outlook for a company, specifically in regard to cost of goods sold (COGS) and gross margin. Steve Voskuil explains that there's significant inflation expected, especially in cocoa prices, which will impact their costs significantly due to increased prices in cocoa beans and derivatives like cocoa butter and liquor. He mentions that labor and specialty ingredients will also face inflationary pressure. Plans for productivity improvements will be considered to mitigate these cost increases. Additionally, Voskuil addresses an inquiry from Peter Galbo about the company's recent gross margin, which came in below expectations, attributing potential reasons to volume deleverage and product mix variances. Further details on these matters will be provided in future updates, particularly expected by February.

The paragraph discusses a disappointing financial performance, highlighting lower-than-expected sales and margin issues driven by sales declines, negative sales mix, and volume deleverage. The conversation then shifts to an inquiry by Alexia Howard about the impact of GLP-1 drugs, noting their faster-than-expected adoption among U.S. adults and their potential effect on chocolate sales. Michele Buck responds that there is a mild year-on-year impact consistent with earlier expectations and acknowledges that consumers using these drugs are consuming less from their categories, supported by multiple data sources.

The paragraph is a conversation between various individuals discussing competitive activity in the international segment of a confectionery business. Alexia Howard asks about increased competition from global competitors and whether it involves pricing. Michele Buck confirms that it is largely due to pricing competition, with some competitors offering lower prices in certain markets where they are smaller players. Steve Voskuil mentions successes in the UK and Europe with the Reese's brand but acknowledges higher competition in Mexico and Brazil, partly related to pricing. Robert Moskow then inquires about expectations for 2026, particularly regarding cocoa costs, and seeks clarification on Steve's comment about pricing in 2025 relative to 2024, specifically regarding a high single-digit price increase in chocolate.

The paragraph is a part of a discussion about the financial outlook and marketing strategy of a company, involving several key figures, including Michele Buck and Steve Voskuil. They discuss their confidence in achieving growth by 2026, contingent on stable cocoa prices, which they are monitoring closely. Steve adds that they've implemented price increases on about half of their chocolate products, resulting in overall low to mid single-digit pricing growth. In terms of marketing spending, Michele and Steve express the importance of investing in their brands despite cost pressures. They emphasize the use of marketing mix models to achieve higher returns on investment and maintain protection of market share amid price hikes.

The paragraph discusses efforts to enhance productivity and investment strategies for approaching 2025, specifically in the instant consumable business. Steve Voskuil emphasizes a focus on sales, brand support, and leveraging media for growth while maintaining efficiency. Michael Lavery queries about inventory impacts on the company's outlook, noting an anticipated inventory restocking not materializing as expected. Voskuil responds, anticipating a mid-single-digit impact on shipping timing in the fourth quarter.

The paragraph involves a discussion about the impacts of various inventory and timing factors on the company's financial performance, notably a 0.5 point drag for the year, and expectations for improved clarity going into 2025. Michael Lavery and Tom Palmer ask questions about the 2025 outlook during an earnings call, seeking specifics on incentive compensation levels and the potential to enhance productivity and cost savings programs. Steve Voskuil responds that details about incentive compensation will be provided in the fourth-quarter earnings, implying a reset to target levels due to this year's performance. He also indicates a focus on improving productivity through ongoing initiatives like the AAA program.

In the paragraph, company executives discuss the challenges of achieving cost savings amidst inflation pressures, specifically related to the AAA and cocoa programs. They acknowledge that determining the extent of inflation for cocoa next year is difficult due to its volatility. They mention potential savings of around $180 million from productivity and AAA programs, with $130 million to $140 million coming from improvements in the operating supply chain. However, they stress that the details are still uncertain and that achieving these savings will be challenging.

The paragraph discusses a company's update on its financial guidance and the impact of socio-economic factors on consumer behavior. A representative named Steve Voskuil addresses Max Gumport's questions about the financial breakdown related to AAA, which includes costs of goods sold (COGS) and SG&A expenses. Max also inquires about the impact of GLP-1 on snacking behavior, suggesting financial pressure as a primary reason for current trends. Michele Buck responds that their analysis shows no significant year-on-year impact from GLP-1 and that financial pressures mostly drive snacking category challenges. The conversation concludes with David Palmer from Evercore ISI indicating a need to assess future earnings.

The paragraph features a discussion between Steve Voskuil and David Palmer about the financial outlook for 2025, particularly focusing on earnings and growth areas for Hershey. Voskuil notes the challenges in providing precise earnings guidance due to evolving factors like cocoa costs and tax normalization, suggesting a potential double-digit earnings decrease for 2025. Palmer acknowledges this uncertainty and shifts the conversation to long-term growth, highlighting Hershey's success in market share and the growth of specific segments like the confectionery category. Michele Buck adds that salty snacks are anticipated to be a significant growth area for Hershey moving forward.

The paragraph discusses a company's strategic growth opportunities and anticipated improvements in 2025. It highlights areas of strong growth potential, such as household penetration in suites and distribution expansion. The speaker notes that the chocolate category is expected to perform slightly better than the market, with a major turning point in 2025. Chris Carey from Wells Fargo Securities asks about reduced headwinds projected for 2025 compared to 2024. Michele Buck responds, citing factors like the exit from the Mexico drink business, the resolution of retail inventory challenges, and overcoming pressures on ready-to-eat popcorn and key retailer merchandise. Steve is also mentioned as contributing to the discussion.

The paragraph discusses challenges and opportunities faced by a company in terms of innovation and market execution. They addressed pressures from smaller innovation projects and noted positives such as a strong innovation pipeline and longer Easter period. Michele Buck highlights that execution, particularly in-store and market activations, needs improvement, mentioning underperformance in events like the Olympics. Increased competition from private labels in the take-home category was noted, despite successful innovation in immediate consumption products. Consequently, there's a need for more focus on innovation in the take-home segment.

The paragraph discusses challenges and strategies in the confectionery market faced by Michele Buck's company. It highlights instances where retail partners may not have chosen the optimal product portfolio and emphasizes the importance of partnering with them to improve results. The company is focusing on implementing strategies for instant consumables, enhancing execution in their variety brands portfolio. Regarding increased competition, particularly from private labels and smaller players, the company attributes this to consumer focus on value and the impact of digital media lowering entry barriers. The company's response involves ensuring they offer the right product and value proposition.

The paragraph discusses the dynamics in the instant consumables market, where the focus is on high-velocity items. During the pandemic, some innovative products gained shelf space, but now smaller competitors with similar or better performance have entered the market, necessitating a shift to stronger products. Leah Jordan and Rob Dickerson address the issue of pricing for the North America confection portfolio. Steve Voskuil explains that despite taking high single-digit pricing on about half of the portfolio, the impact across the total portfolio results in a mid-single-digit range for 2025. This is due to the mix of items being priced, and the overall pricing for next year is expected to be similar to this year's.

The paragraph is part of a conversation involving Michele Buck, where there is a discussion about increasing trade and media spend for certain core brands like Almond Joy, Mounds, and PAYDAY, excluding Reese's. Michele Buck emphasizes prioritizing the distribution of these brands and investing in their marketing support. This strategy aims to enhance consumer value and maintain strong velocities, helping these brands outpace newer competitive products. The conversation concludes with Rob Dickerson and Steve Voskuil expressing gratitude, and Michele Buck looks forward to continued discussions with stakeholders.

The paragraph instructs readers to disconnect their connections and wishes them a good day.

This summary was generated with AI and may contain some inaccuracies.