Hershey Q4 2025 The Hershey Co Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 The Hershey Co Earnings Call
Operator: Greetings, and welcome to The Hershey Company Q4 2025 Question and Answer Session. To join the question queue, please press star one on your telephone keypad. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. I'd now like to turn the call over to your host, Anoori Naughton, Vice President of Investor Relations for The Hershey Company. Thank you. You may begin.
Operator: Greetings, and welcome to The Hershey Company Q4 2025 Question and Answer Session. To join the question queue, please press star one on your telephone keypad. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. I'd now like to turn the call over to your host, Anoori Naughton, Vice President of Investor Relations for The Hershey Company. Thank you. You may begin.
Speaker #1: Greetings, and welcome to the HERSHEY CO 4th quarter 2025 question and answer session. To join the question queue, please press star 1 on your telephone keypad.
Speaker #1: At this time, all participants are in a listen-only mode. recorded. I'd now like to turn As a reminder, this conference is being the call over to your host, Anoori Naughton, Vice President of you.
Speaker #1: Investor Relations for the HERSHEY Company. begin.
Speaker #1: Thank You may Good morning, everyone.
Anoori Naughton: Good morning, everyone. Thank you for joining us today for The Hershey Company's Q4 2025 Earnings Q&A Session. I hope everyone has had the chance to read our press release and listen to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events.
Anoori Naughton: Good morning, everyone. Thank you for joining us today for The Hershey Company's Q4 2025 Earnings Q&A Session. I hope everyone has had the chance to read our press release and listen to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events.
Speaker #2: Thank you for joining us today for the HERSHEY earnings Q&A session. I Company's 4th quarter 2025 hope everyone has had the chance to read our press release and listen to our are available on our pre-recorded management remarks.
Speaker #2: website. In addition, we have posted a transcript of the pre-recorded Q&A session, we will also post a transcript Both of which and audio replay of this call.
Speaker #2: Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations and financial performance.
Speaker #2: Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's FCC filings.
Anoori Naughton: A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. Finally, please note that we may refer to certain non-GAAP financial measures that we believe provide useful information for investors. This information is not intended to be in consideration, in isolation, or as a substitute for the financial information presented in accordance with GAAP. Reconciliations for the GAAP results are included in this morning's press release. Joining me today are Hershey's President and CEO, Kirk Tanner, and Hershey's Senior Vice President and CFO, Steve Voskuil. I will now invite Kirk to begin with a brief introduction.
Anoori Naughton: A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. Finally, please note that we may refer to certain non-GAAP financial measures that we believe provide useful information for investors. This information is not intended to be in consideration, in isolation, or as a substitute for the financial information presented in accordance with GAAP. Reconciliations for the GAAP results are included in this morning's press release. Joining me today are Hershey's President and CEO, Kirk Tanner, and Hershey's Senior Vice President and CFO, Steve Voskuil. I will now invite Kirk to begin with a brief introduction.
Speaker #2: Finally, please note that we may refer to certain non-GAAP financial measures that we believe provide useful information for investors. This information is not intended to be in consideration in isolation or as a substitute for the financial information presented in accordance with GAAP.
Speaker #2: Reconciliations for the GAAP results are included in this morning's press release. Joining me today are Hershey's President and CEO, Kirk Tanner, and Hershey Senior Vice President and CFO, Steve Voskuil.
Speaker #2: I will now invite Kirk to begin with a brief introduction.
Speaker #3: Hey, good morning, everyone. Thank you for questions, I just want to recognize our team and what they accomplished in 2025 through skillful execution. We strengthened our market position.
Kirk Tanner: Hey, good morning, everyone. Thank you for joining us. Hey, before we get to questions, I just want to recognize our team and what they accomplished in 2025. Through skillful execution, we strengthened our market position, we invested for the future, and we closed out the year with real momentum, all while navigating serious headwinds like cocoa inflation and macro volatility. Heading into 2026, I am confident. Our portfolio is resilient. We're looking at 4 to 5% net sales growth and meaningful earnings recovery, and that gives us runway to invest in innovation, brand building, and execution to drive growth, and we are going after it. Thanks for attending the call today, and we're ready to take your questions.
Kirk Tanner: Hey, good morning, everyone. Thank you for joining us. Hey, before we get to questions, I just want to recognize our team and what they accomplished in 2025. Through skillful execution, we strengthened our market position, we invested for the future, and we closed out the year with real momentum, all while navigating serious headwinds like cocoa inflation and macro volatility. Heading into 2026, I am confident. Our portfolio is resilient. We're looking at 4 to 5% net sales growth and meaningful earnings recovery, and that gives us runway to invest in innovation, brand building, and execution to drive growth, and we are going after it. Thanks for attending the call today, and we're ready to take your questions.
Speaker #3: closed out the year with real We invested for the future, and we momentum. All while navigating serious headwinds like COCO inflation and macro volatility.
Speaker #3: Heading into 2026, I am confident our portfolio is resilient. We're looking at 4 to 5 percent net sales growth and meaningful earnings recovery. And that gives us runway to invest in innovation, brand building, and execution to drive growth.
Speaker #3: And we are going after it. Thanks for attending the call today, and we're ready to take your questions.
Speaker #1: Thank you. As a reminder, it's star 1 to join the question queue. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up.
Operator: Thank you. As a reminder, it's star one to join the question queue. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Our first question comes from the line of Andrew Lazar with Barclays. Please proceed with your question.
Operator: Thank you. As a reminder, it's star one to join the question queue. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Our first question comes from the line of Andrew Lazar with Barclays. Please proceed with your question.
Speaker #1: Our first question comes from the line of Andrew Lazar with Barclays. Please proceed with your
Speaker #1: question.
Speaker #4: Great. Thanks so much. Good morning,
Andrew Lazar: Great. Thanks so much. Good morning, everybody.
Andrew Lazar: Great. Thanks so much. Good morning, everybody.
Kirk Tanner: Morning.
Steven Voskuil: Morning.
Speaker #6: Good everybody.
Anoori Naughton: Good morning, Andrew.
Kirk Tanner: Good morning, Andrew.
Speaker #4: Hi.
Andrew Lazar: Hi. Maybe to start, I appreciate, obviously, that the chocolate category is typically not one that is a pass-through category, and that, you know, Hershey and others are still hedged well above where current spot rates are for cocoa at this point. But I guess, just given the precipitous recent decline in the commodity, I guess, is there a risk maybe this time around that we could see some price deflation at some point by either Hershey or competitors to sort of better match, you know, go forward cocoa costs? And I guess, how do you account for that sort of possibility in the guidance?
Andrew Lazar: Hi. Maybe to start, I appreciate, obviously, that the chocolate category is typically not one that is a pass-through category, and that, you know, Hershey and others are still hedged well above where current spot rates are for cocoa at this point. But I guess, just given the precipitous recent decline in the commodity, I guess, is there a risk maybe this time around that we could see some price deflation at some point by either Hershey or competitors to sort of better match, you know, go forward cocoa costs? And I guess, how do you account for that sort of possibility in the guidance?
Speaker #4: Maybe to start, I appreciate, morning, Andrew. obviously, the Chalkman category is typically not one that is a pass-through category. And that HERSHEY and Good morning.
Speaker #4: above where current spot rates are for COCO at this point. But I guess just given the precipitous recent decline in the commodity, I guess is there a risk maybe this time around that we could see some price deflation at some point by either HERSHEY or competitors to sort of better match go forward COCO costs?
Speaker #4: And I guess how do you account for that sort of possibility in the
Speaker #4: guidance? Yeah.
Kirk Tanner: Yeah, thank you for the question. Look, our competitors in the category are sophisticated and are large, like ourselves, and they likely have coverage for more certainty in their business. And private label remains small here in the US, so that's kind of the first point. But there's a big conversation around how we think about pricing and, and the price of cocoa, et cetera. I'd like to make a few points here. So first, we don't take pricing lightly, and we've been very patient and played the long game when cocoa markets surged to balance consumer needs. Our actions that we've taken are anchored in consumer insights, and the brands remain affordable and accessible. 75% of our portfolio is still under $4.
Kirk Tanner: Yeah, thank you for the question. Look, our competitors in the category are sophisticated and are large, like ourselves, and they likely have coverage for more certainty in their business. And private label remains small here in the US, so that's kind of the first point. But there's a big conversation around how we think about pricing and, and the price of cocoa, et cetera. I'd like to make a few points here. So first, we don't take pricing lightly, and we've been very patient and played the long game when cocoa markets surged to balance consumer needs. Our actions that we've taken are anchored in consumer insights, and the brands remain affordable and accessible. 75% of our portfolio is still under $4.
Speaker #6: Thank you for the question. Look, our competitors in the category are sophisticated and large, like ourselves, and they likely have coverage for more certainty in their business.
Speaker #6: And private label remains small here in the U.S., so that's kind of the first point. But there's a big conversation around how we think about pricing and the price of cocoa, et cetera.
Speaker #6: I'd like to make a few points here. So first, we don't take pricing lightly, and we've been very patient and played the long game when COCO markets surged to balance consumer needs.
Speaker #6: Our actions that we've taken are anchored in consumer insights and the brands remain affordable and accessible, 75 percent of our portfolio is still under $4.
Kirk Tanner: The pricing we took in 25, I think this is important, does not fully cover our cocoa cost inflation in 2026. So we're on a recovery path while also adding significant fuel to our growth with investments in marketing, innovation, R&D, really to keep that momentum on the top line going and keeping the category exciting for consumers and keep that growth moving into 2026 and twenty... or beyond 2026, into 2027 and 2028.... And then recently, you know, pricing on our snacks business, I think we're in really good shape. We had 18% growth on our snack business in Q4, on, excuse me, on double-digit volume growth. Let me get a drink. Sorry, Andrew.
Kirk Tanner: The pricing we took in 25, I think this is important, does not fully cover our cocoa cost inflation in 2026. So we're on a recovery path while also adding significant fuel to our growth with investments in marketing, innovation, R&D, really to keep that momentum on the top line going and keeping the category exciting for consumers and keep that growth moving into 2026 and twenty... or beyond 2026, into 2027 and 2028.... And then recently, you know, pricing on our snacks business, I think we're in really good shape. We had 18% growth on our snack business in Q4, on, excuse me, on double-digit volume growth. Let me get a drink. Sorry, Andrew.
Speaker #6: momentum on the top line going and keeping the category exciting for consumers and keep that growth moving into '26 and '20 or beyond '26 into '27 and '28.
Speaker #6: And then recently pricing on our snacks business, I think we're in really good shape. We had 18 percent growth on our snack business in Q4.
Speaker #6: Excuse me. On double-digit volume growth, let me get a—
Speaker #6: drink. Sorry, Andrew. No,
Andrew Lazar: No, no, take your time. Take your time.
Andrew Lazar: No, no, take your time. Take your time.
Speaker #4: no. Take your time. Take your
Speaker #4: time. Yeah.
Kirk Tanner: Yeah, so-
Kirk Tanner: Yeah, so-
Speaker #6: So. No. Yeah. That's kind of
Andrew Lazar: Maybe.
Andrew Lazar: Maybe.
Speaker #4: Maybe.
Kirk Tanner: Yeah, that's, you know, kind of in a broad, broad response to what we see in the market. Certainly, the deflationary momentum on cocoa takes future pricing pressure down. That's how I think about it.
Kirk Tanner: Yeah, that's, you know, kind of in a broad, broad response to what we see in the market. Certainly, the deflationary momentum on cocoa takes future pricing pressure down. That's how I think about it.
Speaker #6: an abroad response to what we see in the market. Certainly, the deflationary pricing pressure down. momentum on COCO takes future
Speaker #6: That's how I think about it.
Speaker #4: Got
Andrew Lazar: Got it. That's helpful. Then just a follow-up, I guess, regarding elasticity. It's great to see that it's thus far coming in more favorably than you anticipated. I guess I'm curious, you know, to what maybe do you owe this better outcome? And, you know, and is the company building in some flexibility in the plan, should elasticity increase, as we've seen maybe in some other markets for some other players? Thanks so much.
Andrew Lazar: Got it. That's helpful. Then just a follow-up, I guess, regarding elasticity. It's great to see that it's thus far coming in more favorably than you anticipated. I guess I'm curious, you know, to what maybe do you owe this better outcome? And, you know, and is the company building in some flexibility in the plan, should elasticity increase, as we've seen maybe in some other markets for some other players? Thanks so much.
Speaker #4: it. That's helpful. And then just a follow-up, I guess, regarding elasticity. It's great to see that it's thus far coming in more favorably than you anticipated.
Speaker #4: I guess I'm curious, to what maybe do you owe this better outcome? And is the Should elasticity increase as we've company building in some flexibility in the plan?
Speaker #4: seen maybe in some other markets for some other players? Thanks so much.
Speaker #6: Well, yeah, let me start, and I'll kick it over to Steve so that I think his voice might be stronger right now. Anyway, look, we're encouraged for what we've seen.
Kirk Tanner: Yeah, let me start, and I'll kick it over to Steve so that, I think his voice might be stronger right now. Anyway, look, we're encouraged for what we've seen so far. So, you know, we announced pricing in July. We started taking pricing mid-September, and so we've gotten information and, you know, that it's informed and, you know, our information is informed on what we're seeing right now, and we're encouraged by what we're seeing right now.
Kirk Tanner: Yeah, let me start, and I'll kick it over to Steve so that, I think his voice might be stronger right now. Anyway, look, we're encouraged for what we've seen so far. So, you know, we announced pricing in July. We started taking pricing mid-September, and so we've gotten information and, you know, that it's informed and, you know, our information is informed on what we're seeing right now, and we're encouraged by what we're seeing right now.
Speaker #6: So far. So we announced pricing in July. We started taking pricing mid-September. And so we've gotten information, and it's informed and our information is informed on what we're seeing right now, and we're encouraged by what we're seeing right now.
Speaker #5: Yeah. say elasticities, don't stay And I would static. Fluctuates over time. While we're experiencing elasticities right now that's favorable to our original outlook, we continue to plan for around 0.8 to account for some price pack changes to roll in.
Steven Voskuil: Yeah, and I would say, you know, elasticities don't stay static. It fluctuates over time. While we're experiencing elasticities right now, that's favorable to our original outlook, you know, we continue to plan for around 0.8 to account for these fluctuations, as there's still some price pack changes to roll in. There are still some channels rolling shelf tags through. So it's gonna take a little bit longer, I think, for everything to fully adjust. Of course, our goal is to do better than that. So with the strong activation calendar that we have, some of the investment that we have, you know, our goal is to do better, but the guide, you know, allows for some of that upside to flow through.
Steven Voskuil: Yeah, and I would say, you know, elasticities don't stay static. It fluctuates over time. While we're experiencing elasticities right now, that's favorable to our original outlook, you know, we continue to plan for around 0.8 to account for these fluctuations, as there's still some price pack changes to roll in. There are still some channels rolling shelf tags through. So it's gonna take a little bit longer, I think, for everything to fully adjust. Of course, our goal is to do better than that. So with the strong activation calendar that we have, some of the investment that we have, you know, our goal is to do better, but the guide, you know, allows for some of that upside to flow through.
Speaker #5: There are still some channels rolling shelf tags through. So these fluctuations as there's still it's going to take a little bit longer, I think, for everything to fully adjust.
Speaker #5: that. So with the strong activation Of course, our goal is to do better than calendar that we have, some of the investment that we have, our goal is to do better.
Speaker #5: But the guide allows for some of that upside to flow
Speaker #5: through. Thanks so much, Steve and
Andrew Lazar: Thanks so much. See you in March.
Andrew Lazar: Thanks so much. See you in March.
Speaker #4: March.
Steven Voskuil: You bet.
Steven Voskuil: You bet.
Speaker #6: Thanks, Andrew.
Kirk Tanner: Thanks, Andrew.
Kirk Tanner: Thanks, Andrew.
Speaker #1: Thank you. Our next question comes from a line of Megan Clapp with Morgan Stanley. You bet. Please proceed with your
Operator: Thank you. Our next question comes from the line of Megan Clapp with Morgan Stanley. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Megan Clapp with Morgan Stanley. Please proceed with your question.
Speaker #1: question. Hi.
[Analyst] (Morgan Stanley): Hi, good morning. Thanks so much. I'll maybe start with a question for Steve to give Kirk, maybe give you a little bit of a break. So another question on, on cocoa, but more related to the margin framework. So I think in the prepared remarks, you talked about stable rates across the broader commodity input basket. You know, just, just given the precipitous decline we've seen in cocoa, how should we think about cocoa within the framework? Were you able to kind of capture any benefit from what we've seen over the last month, or is this really a, a tailwind as we think about, about 27? And what I'm really just trying to get at is, you know, I think you're implying 41% gross margins in 26, obviously, a, a really nice recovery from 25, but still well below, you know, where you've been historically.
Megan Clapp: Hi, good morning. Thanks so much. I'll maybe start with a question for Steve to give Kirk, maybe give you a little bit of a break. So another question on, on cocoa, but more related to the margin framework. So I think in the prepared remarks, you talked about stable rates across the broader commodity input basket. You know, just, just given the precipitous decline we've seen in cocoa, how should we think about cocoa within the framework? Were you able to kind of capture any benefit from what we've seen over the last month, or is this really a, a tailwind as we think about, about 27? And what I'm really just trying to get at is, you know, I think you're implying 41% gross margins in 26, obviously, a, a really nice recovery from 25, but still well below, you know, where you've been historically.
Speaker #7: Good morning. Thanks so much. I'll maybe start with a question for Steve to give Kirk maybe give you a little bit of a break.
Speaker #7: So, another question on COCO, but more related to the margin framework. I think in the prepared remarks, you talked about stable rates across the broader commodity input basket.
Speaker #7: Just given the precipitous decline, we've seen in COCO, how should we think about COCO within the framework? Were you able to kind of capture any benefit from what we've seen over the last month, or is this really a tailwind as we think about '27?
Speaker #7: What I'm really just trying to get at is, I think you're implying 41 percent gross margins in '26—obviously a really nice recovery from '25, but still well below where you've been historically.
Speaker #7: So, based on where COCO's gone, is it kind of reasonable to expect continued progress back towards those historical gross margin levels in '27?
[Analyst] (Morgan Stanley): So, you know, based on where cocoa's gone, is it kind of reasonable to expect continued progress, kind of back towards those historical gross margin levels in 2027? Thanks.
Megan Clapp: So, you know, based on where cocoa's gone, is it kind of reasonable to expect continued progress, kind of back towards those historical gross margin levels in 2027? Thanks.
Steven Voskuil: Sure. Yeah, happy to take it. Hey, we're glad to see that the cocoa financial markets have finally begun to reflect some of the fundamentals that we've been describing really for the last 18 months. You know, as we look out, we continue to anticipate a larger supply surplus in 2025 and 2026, driven by supply expansion and some of those new origins we've talked about, as well as a contraction in global demand. So I'd say we're optimistic as we look to the future. That said, you know, there's market volatility still as prices are trying to find that new equilibrium, and I think we still believe that new equilibrium is likely to be above what we've seen in historic levels. Our hedging program is in great shape for 2026, and we're hedged above current market levels.
Steven Voskuil: Sure. Yeah, happy to take it. Hey, we're glad to see that the cocoa financial markets have finally begun to reflect some of the fundamentals that we've been describing really for the last 18 months. You know, as we look out, we continue to anticipate a larger supply surplus in 2025 and 2026, driven by supply expansion and some of those new origins we've talked about, as well as a contraction in global demand. So I'd say we're optimistic as we look to the future. That said, you know, there's market volatility still as prices are trying to find that new equilibrium, and I think we still believe that new equilibrium is likely to be above what we've seen in historic levels. Our hedging program is in great shape for 2026, and we're hedged above current market levels.
Speaker #6: Hey, we're glad to see that the COCO financial
Speaker #6: markets have finally begun to reflect some of the fundamentals that we've been describing really for the last 18 Thanks. months. As we look out, we continue to anticipate a larger supply surplus in '25 and '26 driven by supply expansion and some of those new origins.
Speaker #6: We've talked about, as well as the contraction in global demand. So I'd say we're optimistic as we look to the future. That said, there's market volatility still as prices are trying to find that new equilibrium.
Speaker #6: And I think we still believe that new equilibrium is likely to be above what we've seen in historical levels. Our hedging program has some great shape for 2026.
Speaker #6: And we're hedged above current market levels. So if you kind of extend current market levels flat, that would suggest that we still have some upside for further deflation in 2027.
Steven Voskuil: So, you know, if you kind of extend current market, market levels flat, you know, that would suggest that we still have some upside for further deflation in 2027. So we'll talk more about that as we give more 2027 and 2028 perspective at the conference. But, you know, as we look, we look ahead, we see more possibility for upside there in the future.
Steven Voskuil: So, you know, if you kind of extend current market, market levels flat, you know, that would suggest that we still have some upside for further deflation in 2027. So we'll talk more about that as we give more 2027 and 2028 perspective at the conference. But, you know, as we look, we look ahead, we see more possibility for upside there in the future.
Speaker #6: So we'll talk more about that as we give more 2027 and 28 perspective at the conference. But as we look ahead, we see more possibility for
Speaker #6: upside there in the
Speaker #6: future. Okay.
[Analyst] (Morgan Stanley): Okay, great. And maybe kind of a related question. A lot of discussion in the prepared remarks about the increased brand investment you're doing in 2026, including a double-digit increase in advertising. So as you look out to 2027, how should we think about kind of the durability of the increased brand investments you're making in 2026? And, you know, as you mentioned, as gross margins hopefully kind of continue to expand as cocoa deflates, how do you think about kind of the need or desire for incremental reinvestment, you know, beyond what you're doing in 2026?
Megan Clapp: Okay, great. And maybe kind of a related question. A lot of discussion in the prepared remarks about the increased brand investment you're doing in 2026, including a double-digit increase in advertising. So as you look out to 2027, how should we think about kind of the durability of the increased brand investments you're making in 2026? And, you know, as you mentioned, as gross margins hopefully kind of continue to expand as cocoa deflates, how do you think about kind of the need or desire for incremental reinvestment, you know, beyond what you're doing in 2026?
Speaker #7: Great. And maybe kind of a related
Speaker #7: A lot of discussion in the prepared remarks about the increased brand investment you're doing in 2026, including a double-digit increase in advertising. So as you look out to '27, how should we think about the durability of the increased brand investments you're making in '26?
Speaker #7: And as you mentioned, as gross margins hopefully kind of continue to expand as COCO deflates, how do you think about kind of the need or desire for incremental reinvestment beyond what you're doing in '26?
Speaker #6: Sure. I mean, I think I would think about the things we're doing in '26 are in some cases multi-year not just '26, but '27 and investments that are going to lay a foundation for beyond while still delivering great growth in the present.
Steven Voskuil: Sure. I mean, I think I would think about the things we're doing in 2026 are, in some cases, multi-year investments that are gonna lay a foundation for not just 2026, but 2027 and beyond, while still delivering great growth in the present. You know, we're really focused on fueling demand creation through things like scaling some investments in R&D and innovation, brand building, re- the retail sales team, and the technology around that. That sets the portfolio up and really focuses on household penetration expansion and capturing new consumers, recapturing some of our lapsed consumers. So, the investments are a mix of things that are gonna deliver today, but also things that are laying a foundation, a multi-year foundation. And again, as we look to 2027, 2027 is also gonna be a year like 2026, of driving growth, but also margin recovery.
Steven Voskuil: Sure. I mean, I think I would think about the things we're doing in 2026 are, in some cases, multi-year investments that are gonna lay a foundation for not just 2026, but 2027 and beyond, while still delivering great growth in the present. You know, we're really focused on fueling demand creation through things like scaling some investments in R&D and innovation, brand building, re- the retail sales team, and the technology around that. That sets the portfolio up and really focuses on household penetration expansion and capturing new consumers, recapturing some of our lapsed consumers. So, the investments are a mix of things that are gonna deliver today, but also things that are laying a foundation, a multi-year foundation. And again, as we look to 2027, 2027 is also gonna be a year like 2026, of driving growth, but also margin recovery.
Speaker #6: We're really focused on fueling demand creation through things like scaling some investments in R&D and retail sales team, and the technology around innovation, brand building, the portfolio up and really focuses on household penetration expansion and capturing new consumers, recapturing some of our last consumers.
Speaker #6: So the investments are a mix of things that are going to deliver today, but also things that are laying a foundation—a multi-year foundation.
Speaker #6: And again, as we look to '27, '27 is also going to be a year like '26 of driving growth, but also margin recovery. So that balance will be present in '27 just like it is in '26.
Speaker #6: And again, as we look to '27, '27 is also going to be a year like '26 of driving growth, but also margin recovery. So that balance will be present in '27 just like it is in '26.
Steven Voskuil: So, you know, that balance will be present in 2027, just like it is in 2026.
Steven Voskuil: So, you know, that balance will be present in 2027, just like it is in 2026.
Speaker #5: Yeah. We'll go in greater detail in our investor conference in March. We'll really unpack this brand building, our investments in R&D. The solution here is to have sustainable, long-term top-line growth.
Kirk Tanner: Yeah. We'll go in greater detail at our investor conference in March. Really unpack this brand building, our investments in R&D. You know, the solution here is to have sustainable long-term top-line growth, and those capabilities and investments that we make are really important, and we'll unpack that in March.
Kirk Tanner: Yeah. We'll go in greater detail at our investor conference in March. Really unpack this brand building, our investments in R&D. You know, the solution here is to have sustainable long-term top-line growth, and those capabilities and investments that we make are really important, and we'll unpack that in March.
Speaker #5: And those capabilities and investments that we make are really important and will unpack that in March.
Speaker #7: Great. Thanks so much. Looking forward to
Speaker #7: Great. Thanks so much. Looking forward to it. Thank you.
[Analyst] (Morgan Stanley): Great. Thanks so much. Looking forward to it.
Megan Clapp: Great. Thanks so much. Looking forward to it.
Kirk Tanner: ... Thank you. Our next question comes from the line of Peter Galbo with Bank of America. Please proceed with your question.
Operator: ... Thank you. Our next question comes from the line of Peter Galbo with Bank of America. Please proceed with your question.
Speaker #1: Our next question comes from a line of Peter Galbo with Bank of America. Please proceed with your
Speaker #1: question. Hey.
Peter Galbo: Hey, good morning, guys. Thanks, thanks for the question.
Peter Galbo: Hey, good morning, guys. Thanks, thanks for the question.
Speaker #4: Good morning, guys. Thanks for the question.
Steven Voskuil: Morning.
Steven Voskuil: Morning.
Peter Galbo: Steve, I actually was hoping maybe we could unpack the quarter a little bit. You had some pretty nice upside in the gross margin, I think even relative to your own expectations, to the tune of, like, 250 basis points plus. I know you outlined maybe some of that in the prepared remarks of the buckets, but maybe you could just give us a little bit more detail on the upside in the quarter between kind of tariff, cost saving, volume deleverage, where those kind of buckets stood.
Speaker #4: Steve, I actually was hoping maybe Morning. we could unpack the quarter a little bit. You had some pretty nice upside in the gross margin, I think even relative to your own expectations to the tune of like 250 basis points plus.
Peter Galbo: Steve, I actually was hoping maybe we could unpack the quarter a little bit. You had some pretty nice upside in the gross margin, I think even relative to your own expectations, to the tune of, like, 250 basis points plus. I know you outlined maybe some of that in the prepared remarks of the buckets, but maybe you could just give us a little bit more detail on the upside in the quarter between kind of tariff, cost saving, volume deleverage, where those kind of buckets stood.
Speaker #4: I know you outlined maybe some of that in the prepared remarks of the buckets, but maybe you could just give us a little bit more detail on the upside in the quarter between kind of tariff cost-saving, volume de-leverage, where those kind of buckets stood.
Speaker #6: Sure. Yeah. You're right. We had a few hundred basis points of better performance in gross margin than we expected in the fourth quarter. And there are a couple of things in there, obviously volumes were strong.
Steven Voskuil: Sure. Yeah, you're right. We had a few hundred basis points of better performance in gross margin than we expected in Q4. There are a couple things in there. Obviously, volumes were strong, so we got a little bit more leverage. But probably the single biggest piece was tariffs. Now, you think about tariffs in two ways: tariffs on our products, which we have high visibility to, and we'll talk about that as, you know, some of that's still sitting in inventory to come out in Q1.
Steven Voskuil: Sure. Yeah, you're right. We had a few hundred basis points of better performance in gross margin than we expected in Q4. There are a couple things in there. Obviously, volumes were strong, so we got a little bit more leverage. But probably the single biggest piece was tariffs. Now, you think about tariffs in two ways: tariffs on our products, which we have high visibility to, and we'll talk about that as, you know, some of that's still sitting in inventory to come out in Q1.
Speaker #6: So we got a little bit more leverage. But probably the single biggest piece was tariffs. Now, you think about tariffs in two ways. Tariffs on our products, which we have high visibility to, and we'll talk about that as some of that's still sitting in inventory to come out in Q1.
Speaker #6: But we also pay tariffs on some of our suppliers' items. And that was an area where we anticipated paying more tariffs on some of our suppliers' materials.
Steven Voskuil: But we also pay tariffs on some of our suppliers' items, and that was an area where we had anticipated paying more tariffs on some of our suppliers' materials than we ended up paying in Q4, and that was one of the, I'll say, surprises to the upside or the positive for the quarter. Offsetting that, we had a little bit of LIFO headwinds, inventory reval headwinds, but that was the biggest piece for the upside.
Steven Voskuil: But we also pay tariffs on some of our suppliers' items, and that was an area where we had anticipated paying more tariffs on some of our suppliers' materials than we ended up paying in Q4, and that was one of the, I'll say, surprises to the upside or the positive for the quarter. Offsetting that, we had a little bit of LIFO headwinds, inventory reval headwinds, but that was the biggest piece for the upside.
Speaker #6: Then we ended up paying in the fourth quarter. And that was one of the, I'll say, surprises to the upside or the positive for the quarter.
Speaker #6: Offsetting that, we had a little bit of LIFO headwinds, inventory rebound headwinds, but that was the biggest piece for the
Speaker #6: upside. Got it.
Peter Galbo: Got it. Okay, thanks for that. And, Kirk, you know, the prepared remarks had a notable on kind of Hershey and Reese's, you know, having a true campaign for the first time in eight years. I was commenting to Anoori this morning, like, I've seen the Team USA ad. It's great ad copy. But just, like, the impetus kind of for why now? You know, why this, why now on both those brands, again, given it's been some time, would be helpful. Thanks very much.
Peter Galbo: Got it. Okay, thanks for that. And, Kirk, you know, the prepared remarks had a notable on kind of Hershey and Reese's, you know, having a true campaign for the first time in eight years. I was commenting to Anoori this morning, like, I've seen the Team USA ad. It's great ad copy. But just, like, the impetus kind of for why now? You know, why this, why now on both those brands, again, given it's been some time, would be helpful. Thanks very much.
Speaker #4: Okay, thanks for that. And Kirk, the prepared remarks had a note on kind of HERSHEY and REESE'S having a true campaign for the first time in eight years.
Speaker #4: I was commenting to Anoori this morning, for why now, why this, why just like the impetus kind of It's great ad copy." But now on both those brands, again, given it's been some time would be helpful.
Speaker #4: Thanks very
Speaker #4: much. Yeah.
Kirk Tanner: Yeah, thanks for that question. You know, this is the year of Hershey, and we're investing in Reese's as well. But when you look at the campaign, it's your happy place with Hershey's. That really builds on the connection and love that consumers have for the brand. And staying relevant with consumers on big brands is so important to fuel our growth. We've got a full year planned on both Reese's and Hershey. You'll see innovation on both. There's big innovation coming out on Hershey. And then, of course, we have the movie celebrating Milton Hershey and really the great American story, success story of The Hershey Company coming out in the fall. So it really is an action-packed year that really celebrates these two big brands, and that drives growth for us.
Kirk Tanner: Yeah, thanks for that question. You know, this is the year of Hershey, and we're investing in Reese's as well. But when you look at the campaign, it's your happy place with Hershey's. That really builds on the connection and love that consumers have for the brand. And staying relevant with consumers on big brands is so important to fuel our growth. We've got a full year planned on both Reese's and Hershey. You'll see innovation on both. There's big innovation coming out on Hershey. And then, of course, we have the movie celebrating Milton Hershey and really the great American story, success story of The Hershey Company coming out in the fall. So it really is an action-packed year that really celebrates these two big brands, and that drives growth for us.
Speaker #6: Thanks for that question. This is the year of HERSHEY and we're investing in REICE's as well. But when you look at the campaign, it's your happy place with HERSHEY's.
Speaker #6: That really builds on the connection and love that consumers have for the brand. And staying relevant with consumers on big brands is so important to fuel our growth.
Speaker #6: We've got a full year planned on both REESE'S and HERSHEY. You'll see innovation on both. There's big innovation coming out on HERSHEY. And then, of course, we have the movie celebrating Milton Hershey and really the great American story, success story of The Hershey Company coming out in the fall.
Speaker #6: So it really is an action-packed year that really celebrates these two big brands. And that drives growth for us.
Peter Galbo: Great. Thanks so much.
Peter Galbo: Great. Thanks so much.
Speaker #4: Great. Thanks very
Speaker #4: much.
Speaker #6: you. Thank
Steven Voskuil: Thank you.
Kirk Tanner: Thank you.
Kirk Tanner: Thank you. Our next question comes from the line of Peter Grom with UBS. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Peter Grom with UBS. Please proceed with your question.
Speaker #1: Our next question comes from a line of Peter Grom with UBS. Please proceed with your
Speaker #6: Great. Thank you. Good morning, everyone. I wanted to ask
Peter Grom: Great. Thank you. Good morning, everyone. I wanted to ask on the '26 guidance, and you know, understanding a lot has changed over the last few months as it relates to cocoa, tariffs, elasticity. But I kind of wanted to bridge from the expectation last quarter of being on algorithms, maybe being a little bit above that post-tariff, to now kind of expecting 30% to 35% earnings growth. And I ask that more in context of trying to understand the degree of cushion or flexibility in the guidance, just given the expectation for such strong growth.
Peter Grom: Great. Thank you. Good morning, everyone. I wanted to ask on the '26 guidance, and you know, understanding a lot has changed over the last few months as it relates to cocoa, tariffs, elasticity. But I kind of wanted to bridge from the expectation last quarter of being on algorithms, maybe being a little bit above that post-tariff, to now kind of expecting 30% to 35% earnings growth. And I ask that more in context of trying to understand the degree of cushion or flexibility in the guidance, just given the expectation for such strong growth.
Speaker #6: on the '26 guidance. And understanding a lot has changed over the last few months as it relates to COCO, tariffs, elasticities. Thank you. But I kind of wanted to bridge from the expectation last quarter of being on algorithms to maybe being a little bit above that post-tariffs to now kind of expecting 30 to 35 percent earnings growth.
Speaker #6: And I asked that more in context of trying to understand the degree of cushion or flexibility in the guidance, just given the expectation for such strong growth.
Speaker #4: Gotcha.
Speaker #5: Yeah. Let me address just the momentum on the top line and let Steve talk about the EPS comportion. But if you think about what's different between now and when we talked last, is the momentum in the business, and it's across the portfolio.
Steven Voskuil: Yeah, let me address just the momentum on the top line and let Steve talk about the EPS proportion. But if you think about what's different between now and, you know, when we talked last, is the momentum in the business, and it's across the portfol-- So we've got real strength in our CMG business, and we continue to see that. And then fundamentally, how we're investing in our brands and delivering innovation, that gives us the confidence on the top line. And then our salty portfolio has been really, you know, got a lot of tailwinds. It's really positioned with consumers in the right places. Again, we saw 18% organic growth in Q4 in our salty business, and that's double-digit volume growth, so we see real health there.
Kirk Tanner: Yeah, let me address just the momentum on the top line and let Steve talk about the EPS proportion. But if you think about what's different between now and, you know, when we talked last, is the momentum in the business, and it's across the portfol-- So we've got real strength in our CMG business, and we continue to see that. And then fundamentally, how we're investing in our brands and delivering innovation, that gives us the confidence on the top line. And then our salty portfolio has been really, you know, got a lot of tailwinds. It's really positioned with consumers in the right places. Again, we saw 18% organic growth in Q4 in our salty business, and that's double-digit volume growth, so we see real health there.
Speaker #5: So we've got real strength in our CMG business, and we continue to see that. And then, fundamentally, how we're investing in our brands and delivering innovation—that gives us the confidence on the top line.
Speaker #5: And then our salty portfolio has been really got a lot of tailwinds. It's really positioned with consumers in the right places. Again, we saw 18% growth on organic growth in quarter four on our salty business.
Speaker #5: And that's real health there. And the combination of our confidence to deliver the top line, which salty and sweet portfolio gives us the also of course helps our earnings.
Steven Voskuil: The combination of our salty and sweet portfolio gives us the confidence to deliver the top line, which also, of course, helps our earnings. So that's different. Then on EPS, Steve can talk kind of through the levers there. Sure. You know, we're in a good spot to be in for a change, where we have, you know, two of our biggest risks, cocoa and tariffs, fully understood, you know, at least up to the moment for the year. So that's a good place to start. On top of that, you know, since we last talked, we've got a better view. We get new data every day on elasticities. We feel better about what we're seeing.
Kirk Tanner: The combination of our salty and sweet portfolio gives us the confidence to deliver the top line, which also, of course, helps our earnings. So that's different. Then on EPS, Steve can talk kind of through the levers there.
Speaker #5: So that's different. And then on EPS, Steve can talk kind of through
Speaker #6: Sure.
Speaker #6: Sure.
Steven Voskuil: Sure. You know, we're in a good spot to be in for a change, where we have, you know, two of our biggest risks, cocoa and tariffs, fully understood, you know, at least up to the moment for the year. So that's a good place to start. On top of that, you know, since we last talked, we've got a better view. We get new data every day on elasticities. We feel better about what we're seeing.
Speaker #6: We're in a it's a good spot to be in for a change where we have two of our biggest the levers there. risk, COCO and tariffs, fully understood, at least up to the moment, for the year.
Speaker #6: So that's a good place to start. double-digit volume growth.
Speaker #6: we last talked, we've got a better view. We get new data every day on elasticities. We feel So we see better about what we're seeing.
Steven Voskuil: We haven't, as we said earlier, we haven't built all that potential upside into the plan, but we, we believe we've got a good balanced outlook on elasticities. We've got strong operating plans that Kirk, Kirk and I have been through in detail in the last few months, and we're excited about those. And at the same time, we're balancing that with, you know, understanding the headwinds from the macros and making sure that we've got a balanced view of how those could play out for the year.
Steven Voskuil: We haven't, as we said earlier, we haven't built all that potential upside into the plan, but we, we believe we've got a good balanced outlook on elasticities. We've got strong operating plans that Kirk, Kirk and I have been through in detail in the last few months, and we're excited about those. And at the same time, we're balancing that with, you know, understanding the headwinds from the macros and making sure that we've got a balanced view of how those could play out for the year.
Speaker #6: we said earlier, we haven't built all that potential upside into the plan, but we believe we've got a good balanced outlook on elasticities. We've got strong operating plans with Kirk.
Speaker #6: Kirk and I have We haven't as been through in detail in the last few months, and we're excited about those. And at the same time, we're balancing that with we've got a balanced understanding the headwinds from the macros and making sure that view of how those could play out for the year.
Steven Voskuil: You know, as we think about the gives and takes, and we sometimes focus on, you know, what's in our control and what's outside our control, you know, in our control, as we said earlier, we wanna, we wanna do better on elasticities, and we've got strong programming and brand engagement to do that. We've got investments in innovation, media, in-store activation, and then, you know, the ability which we've done a great job of, delivering on productivity and cost savings. So I got very high confidence in that set of controllables. But there are things out of our control, you know, macro headwinds, which again, I believe we've got a prudent outlook for.
Steven Voskuil: You know, as we think about the gives and takes, and we sometimes focus on, you know, what's in our control and what's outside our control, you know, in our control, as we said earlier, we wanna, we wanna do better on elasticities, and we've got strong programming and brand engagement to do that. We've got investments in innovation, media, in-store activation, and then, you know, the ability which we've done a great job of, delivering on productivity and cost savings. So I got very high confidence in that set of controllables. But there are things out of our control, you know, macro headwinds, which again, I believe we've got a prudent outlook for.
Speaker #6: As we think about the gives and control, and what's outside our takes, and we sometimes focus on what's in our control, in our controls, we said earlier, we want to do better on elasticities.
Speaker #6: And we've got strong programming and brand engagement to do that. We've got investments in innovation, media, in-store activation. And then the ability, which we've done a great job of delivering on productivity and cost savings.
Speaker #6: So I got very high confidence in that set of controllables. But there are things out of our control, macro headwinds, which again, I believe we've got a prudent outlook for.
Steven Voskuil: Competitive response, again, we're not seeing anything today that's causing concern, but these are the, the things that we will certainly keep an eye on. I think a key, as we think about the 2026 guidance, you know, we have flexibility to respond to what's gonna change and challenge. And so, we've done a good job of being agile in 2025, and we will do the same in 2026.
Speaker #6: Competitive response, again, we're not seeing anything today that's causing concern, but these are the things that we will certainly keep an eye on. I think a key, as we think about the '26 guide, is that we have flexibility.
Steven Voskuil: Competitive response, again, we're not seeing anything today that's causing concern, but these are the, the things that we will certainly keep an eye on. I think a key, as we think about the 2026 guidance, you know, we have flexibility to respond to what's gonna change and challenge. And so, we've done a good job of being agile in 2025, and we will do the same in 2026.
Speaker #6: To respond to what's going to change and challenge. And so we've done a good job of being agile in '25, and we will do the same in 2026.
Leah Jordan: ... Great. And then maybe just a follow-up on, on salty. There was a competitor this week that talked about, you know, affordability, price reductions, that they're seeing expanded shelf space distribution. I know that there's some subcategory differences, but just curious how you see that playing out for the category and maybe any implications for your business as well.
Peter Galbo: ... Great. And then maybe just a follow-up on, on salty. There was a competitor this week that talked about, you know, affordability, price reductions, that they're seeing expanded shelf space distribution. I know that there's some subcategory differences, but just curious how you see that playing out for the category and maybe any implications for your business as well.
Speaker #6: Great. And then maybe just a follow-up on salty. There was a competitor this week that talked about affordability, price reductions, and that they're seeing expanded shelf space and distribution.
Speaker #6: I know the there's some subcategory differences, but just curious how you see that playing out for the category and maybe any implications for your business as well.
Speaker #5: Yeah. Our salty business has got a lot of momentum, like we talked about. 18%, double-digit growth for the full year. And really healthy volume growth.
Steven Voskuil: Yeah, our salty business has got a lot of momentum, like we talked about, you know, 18%, double-digit growth for the full year, and really healthy volume growth. Customers reward space on performance and velocity. That's the fundamentals of category management. And so we are as well; we're expanding with our customers, and customers need our growth. If you think about the category, the salty category was relatively flat last year, and we grew double digits. So we provided a lot of growth in the category, and we'll continue to do that with our customers, and we'll be rewarded with space gains and additions, including, you know, support for the innovation that we bring out on our salty business. So I feel really good about the fundamentals of where we are with our salty business, and that momentum will continue.
Kirk Tanner: Yeah, our salty business has got a lot of momentum, like we talked about, you know, 18%, double-digit growth for the full year, and really healthy volume growth. Customers reward space on performance and velocity. That's the fundamentals of category management. And so we are as well; we're expanding with our customers, and customers need our growth. If you think about the category, the salty category was relatively flat last year, and we grew double digits. So we provided a lot of growth in the category, and we'll continue to do that with our customers, and we'll be rewarded with space gains and additions, including, you know, support for the innovation that we bring out on our salty business. So I feel really good about the fundamentals of where we are with our salty business, and that momentum will continue.
Speaker #5: Customers' performance and velocity—that's the fundamentals, the category management. And so reward space on we are as well; we're expanding with our customers, and customers need our growth.
Speaker #5: If you think about the category, the salty category was relatively flat last year, and we grew double digits. So we provided a lot of growth in the category.
Speaker #5: And we'll continue to do that with our customers. And we'll be rewarded with space gains and additions including support for the innovation that we bring out on our salty business.
Speaker #5: So I feel really good about the fundamentals of where we are with our salty business and that momentum will continue.
Leah Jordan: Great. Thank you so much. I'll pass it on.
Peter Galbo: Great. Thank you so much. I'll pass it on.
Speaker #6: much. I'll pass it Great. Thank you so
Speaker #6: on. Thank
Operator: Thank you. Our next question comes from the line of David Palmer with Evercore ISI. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of David Palmer with Evercore ISI. Please proceed with your question.
Speaker #1: Our next question comes from the line of David Palmer with Evercore ISI. Please proceed with your question.
Speaker #7: Great. Thank you. Good morning,
David Palmer: Great. Thank you. Good morning, guys. You know, I wanna hit-
David Palmer: Great. Thank you. Good morning, guys. You know, I wanna hit-
Speaker #7: guys. question.
Speaker #8: Good morning, David.
Speaker #7: I wanted to hit good morning. I want to hit on that line of questioning you heard earlier. People right now are going to be wrestling with how to think about earnings into '27, which is ridiculously early, I know.
Steven Voskuil: Good morning, David.
Steven Voskuil: Good morning, David.
David Palmer: Good morning. I wanna hit on that line of questioning you heard earlier. You know, people right now are gonna be wrestling with how to think about earnings into 2027, which is ridiculously early, I know. But, you know, people are gonna clearly be imagining, you know, $10 or more in earnings in 2027. Just thinking through where cocoa is today, and likely it could be in the $4,000s for that upcoming year, just based on how you might be hedging this year into that year. I'm just wondering, like, things that would maybe not make, we don't want to get ahead of ourselves in terms of flow-through, things that could hold back that flow-through to get to those types of numbers, you know, price elasticity moving over 0.8, I would imagine, would be one, but other wish list types of reinvestments.
David Palmer: Good morning. I wanna hit on that line of questioning you heard earlier. You know, people right now are gonna be wrestling with how to think about earnings into 2027, which is ridiculously early, I know. But, you know, people are gonna clearly be imagining, you know, $10 or more in earnings in 2027. Just thinking through where cocoa is today, and likely it could be in the $4,000s for that upcoming year, just based on how you might be hedging this year into that year. I'm just wondering, like, things that would maybe not make, we don't want to get ahead of ourselves in terms of flow-through, things that could hold back that flow-through to get to those types of numbers, you know, price elasticity moving over 0.8, I would imagine, would be one, but other wish list types of reinvestments.
Speaker #7: to clearly be But people are going imagining 10 bucks or more in earnings in '27. Just thinking through where COCO is today and likely it could be in the 4,000s for that upcoming year just based on how you might be hedging this year into that would maybe not make we don't want to get that year.
Speaker #7: I'm just wondering, things ahead of ourselves in terms of flow through—things that could hold back that flow-through to get to those types of numbers.
Speaker #7: Price elasticity moving over 0.8, I would imagine, would be one. But other wish list types of reinvestments? Any thoughts on that would be helpful, and I have a follow-up.
David Palmer: Any thoughts on that would be helpful, and I have a follow-up.
David Palmer: Any thoughts on that would be helpful, and I have a follow-up.
Speaker #6: Sure. As you said, we'll unpack this more in the investor agree the external factors, as we look day. I agree with you. I think we all out, seem to be improving.
Steven Voskuil: Sure. As you said, we'll unpack this more in the Investor Day. You know, I agree with you. I think we all agree the external factors, as we look out, seem to be improving. Cocoa, one of those, you know, we'd agree that today, if you were to snap a chalk line, you'd probably say that looks like a potential tailwind for 2027. But it's still volatile. It still hasn't found its new normal, and, you know, we continue to watch it. On the other side, you know, we are gonna, as we said earlier, continue to make investments in the portfolio and products that are gonna set us up for, you know, multiyear performance. And so we feel good about what we have in the 2026 plan. Some of those are gonna carry over into 2027.
Steven Voskuil: Sure. As you said, we'll unpack this more in the Investor Day. You know, I agree with you. I think we all agree the external factors, as we look out, seem to be improving. Cocoa, one of those, you know, we'd agree that today, if you were to snap a chalk line, you'd probably say that looks like a potential tailwind for 2027. But it's still volatile. It still hasn't found its new normal, and, you know, we continue to watch it. On the other side, you know, we are gonna, as we said earlier, continue to make investments in the portfolio and products that are gonna set us up for, you know, multiyear performance. And so we feel good about what we have in the 2026 plan. Some of those are gonna carry over into 2027.
Speaker #6: COCO, one of those. We'd agree that today, if you were to snap a chalk line, you'd probably say that looks like a potential tailwind for 2027.
Speaker #6: But it's still volatile. It still hasn't found its new normal, and we continue to watch it. On the other side, we are going to, as we said earlier, continue to make investments in the portfolio and products that are going to set us up for multi-year performance.
Speaker #6: And so we feel good about what we have in the 2026 plan. Some of those are going to carry over into 2027. We are always growth.
Steven Voskuil: We are always gonna balance the margin recovery and the growth. So, you know, don't think about that investment as taking away that margin recovery, but it's a balancing factor to make sure we enable long-term growth. And then, as we talked about earlier, you know, we're gonna watch those macros very closely. You know, we'll get more data on SNAP. You know, we've got a lot of data coming in on GLP-1. Just like many of you do, we have a team of people who does nothing but study and analyze these macros to understand the impact on our business. And so we have built in the what we believe is the best information today into that guide, but that'll be a place we'll watch as it develops over the course of this year and we get more data.
Steven Voskuil: We are always gonna balance the margin recovery and the growth. So, you know, don't think about that investment as taking away that margin recovery, but it's a balancing factor to make sure we enable long-term growth. And then, as we talked about earlier, you know, we're gonna watch those macros very closely. You know, we'll get more data on SNAP. You know, we've got a lot of data coming in on GLP-1. Just like many of you do, we have a team of people who does nothing but study and analyze these macros to understand the impact on our business. And so we have built in the what we believe is the best information today into that guide, but that'll be a place we'll watch as it develops over the course of this year and we get more data.
Speaker #6: So don't think about that investment as going to balance the margin recovery and the taking away that margin recovery. But it's a balancing factor to make sure we enable long-term growth.
Speaker #6: And then, as we talked about earlier, we're going to watch those macros very closely. We'll get more data on SNAP. We've got a lot of data coming in on GLP-1s, just like many of you do.
Speaker #6: We have a team of people who does nothing but study and analyze these macros to understand the impact on our business. And so we have built in what we believe is the best information today into that guide.
Speaker #6: But that'll be a place we'll watch as it develops over the course of this year, and we get more.
Speaker #7: Thanks for that. And just
David Palmer: Thanks for that. Just, I don't wanna front run your Investor Day, but, you know, Kirk, you obviously have been in the CPG space for a while. You have fresh eyes on this business. You obviously have a chance to have a say in the plan for 2026 and 2027. You know, in terms of how we should think about the type of growth activations and the things that you're doing, the levers that we will see more of, perhaps, than that we've seen in the recent past, any thoughts on that? Just, tease the Analyst Day a bit. Thanks.
David Palmer: Thanks for that. Just, I don't wanna front run your Investor Day, but, you know, Kirk, you obviously have been in the CPG space for a while. You have fresh eyes on this business. You obviously have a chance to have a say in the plan for 2026 and 2027. You know, in terms of how we should think about the type of growth activations and the things that you're doing, the levers that we will see more of, perhaps, than that we've seen in the recent past, any thoughts on that? Just, tease the Analyst Day a bit. Thanks.
Speaker #7: I know I want to front-run your investor day, but Kirk, you obviously have been in the CPG space for a while. You have fresh eyes on this business.
Speaker #7: You obviously have a chance to have a say in the plan for '26 and '27. In terms of how we should think about the type of growth activations and the things that you're doing, the levers that we will see more of perhaps than that we've seen in the recent past, any thoughts on that?
Speaker #7: Just tease the analyst day a bit.
Speaker #7: bit. Thanks. Yeah.
Steven Voskuil: Yeah. Let's, let's tease it out. But hey, look, first of all, we'd love to see you all on 31 March in New York. We're excited to share that. I'm excited to share the plan. So, you know, 2026 is really the first chapter of our next generation of growth. And what we'll kind of share with you is the portfolio that we're building. Look, we have a terrific portfolio today. We'll continue to invest in that portfolio, and we're gonna double down on our strengths. And those strengths will fuel that top-line growth while we return earnings to our shareholders, and we'll bring that to life in, you know, at the Investor Day. And we'll be very articulate about what investments we're making, what capabilities, and what outcomes we expect, but you'll see that really come to life.
Kirk Tanner: Yeah. Let's, let's tease it out. But hey, look, first of all, we'd love to see you all on 31 March in New York. We're excited to share that. I'm excited to share the plan. So, you know, 2026 is really the first chapter of our next generation of growth. And what we'll kind of share with you is the portfolio that we're building. Look, we have a terrific portfolio today. We'll continue to invest in that portfolio, and we're gonna double down on our strengths. And those strengths will fuel that top-line growth while we return earnings to our shareholders, and we'll bring that to life in, you know, at the Investor Day. And we'll be very articulate about what investments we're making, what capabilities, and what outcomes we expect, but you'll see that really come to life.
Speaker #6: Let's tease it out. But hey, look, first of all, we'd love to see you all on March 31st. In New York, we're excited to share that.
Speaker #6: I'm excited to share the plan. So 2026 is really the first chapter of our next generation of growth. And it really and what we'll kind of share with you is the portfolio that we're building, the look, we have a terrific portfolio today.
Speaker #6: We'll continue to invest in that portfolio. And we're going to double down on our strengths. And those strengths will fuel that top-line growth while we return earnings to our shareholders.
Speaker #6: in at the investor day. And we'll be And we'll bring that to life very articulate about what investments we're making, what capabilities, and what outcomes we to life.
Speaker #6: We're really excited to share that with
Steven Voskuil: We're really excited to share that with you.
Kirk Tanner: We're really excited to share that with you.
Speaker #6: you.
Speaker #7: Thank
Speaker #7: you.
David Palmer: Thank you.
David Palmer: Thank you.
Speaker #1: Thank
Operator: Thank you. Our next question comes from the line of Leah Jordan with Goldman Sachs. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Leah Jordan with Goldman Sachs. Please proceed with your question.
Speaker #1: you. Our next question comes from a line of expect. Leah Jordan with Goldman Sachs.
Speaker #1: Please proceed with your
Speaker #1: question. Good
Leah Jordan: Good morning. Thank you for taking my question. There just seems to be a lot of attention and excitement about the innovation and activation plans in a lot of your commentary today. So seeing if you could provide more color on the plans you have for the coming year, key timing we should think about, and then I think ultimately, how do you think about growth and innovation versus core for the coming year? Thank you.
Leah Jordan: Good morning. Thank you for taking my question. There just seems to be a lot of attention and excitement about the innovation and activation plans in a lot of your commentary today. So seeing if you could provide more color on the plans you have for the coming year, key timing we should think about, and then I think ultimately, how do you think about growth and innovation versus core for the coming year? Thank you.
Speaker #8: morning. Thank you for taking my and excitement about the innovation and question. There just seems to be a lot of attention activation plans in a lot of your But you'll see that really come commentary today.
Speaker #8: So, seeing if you could provide more color on the plans you have for the coming year, key timing we should think about. And then, I think ultimately, how do you think about growth and innovation versus core for the coming year?
Speaker #8: Thank
Speaker #6: Yeah. I think it's a balance. We just talked about some of the investments we're making on Hershey's and Reese's. I think that quality core growth is really important.
Steven Voskuil: Yeah, I think it's a balance. You know, we just talked about some of the investments we're making on Hershey's and Reese's. I think that, you know-
Kirk Tanner: Yeah, I think it's a balance. You know, we just talked about some of the investments we're making on Hershey's and Reese's. I think that, you know-
Kirk Tanner: ... quality core growth is really important, and there's innovation in those places as well. But innovation is so important to the category, and we've had some really good innovation as of late. Reese's Oreo has been a really nice tailwind for us, and that continues through most of this year, where we have, you know, two-thirds of the year, we'll have, you know, that being a real positive to us. And then we have a pipeline of innovation that, you know, we're launching across our sweets and chocolate portfolio that we're excited. Plus, we have really good innovation on our salty business. And so innovation on our Hershey brand, Dot's brand, SkinnyPop, Jolly Rancher, you'll see all that innovation. We'll share all that innovation at our upcoming Investor Day, but it is robust.
Kirk Tanner: ... quality core growth is really important, and there's innovation in those places as well. But innovation is so important to the category, and we've had some really good innovation as of late. Reese's Oreo has been a really nice tailwind for us, and that continues through most of this year, where we have, you know, two-thirds of the year, we'll have, you know, that being a real positive to us. And then we have a pipeline of innovation that, you know, we're launching across our sweets and chocolate portfolio that we're excited. Plus, we have really good innovation on our salty business. And so innovation on our Hershey brand, Dot's brand, SkinnyPop, Jolly Rancher, you'll see all that innovation. We'll share all that innovation at our upcoming Investor Day, but it is robust.
Speaker #6: And there's innovation in those places as well. But innovation is so important to the category. And we've had some really good innovation as of late.
Speaker #6: Reese's Oreo has been a really nice tailwind for us. And that continues through most of this year where we have two-thirds of the year we'll have that being a real positive to us.
Speaker #6: And then we have a pipeline of innovation that we're launching across our suites and chocolate portfolio. That we're excited. Plus, we have really good innovation on our salty business.
Speaker #6: And so innovation on brand, Skinny Pop, our Hershey brand, Dot's Jolly Rancher, you'll see all that innovation. We'll share all that innovation at our upcoming investor day.
Speaker #6: But it is robust. And then, if you think about '27 and beyond, it's important that we have a pipeline of innovation that continues through '27.
Kirk Tanner: Then if you think about 27 and beyond, it's important that we have a pipeline of innovation that continues through 27. That's why we're making continued investments in R&D, so that we can, you know, come to the market faster with the most relevant consumer-facing ideas, and we'll share that pipeline as well.
Kirk Tanner: Then if you think about 27 and beyond, it's important that we have a pipeline of innovation that continues through 27. That's why we're making continued investments in R&D, so that we can, you know, come to the market faster with the most relevant consumer-facing ideas, and we'll share that pipeline as well.
Speaker #6: And that's why we're making continued investments in R&D, so that we can come to market faster with the most relevant, consumer-facing ideas.
Speaker #6: And we'll share that pipeline as
Speaker #6: well. Okay.
[Analyst] (Piper Sandler): Okay, great. We'll look forward to that. I think for my follow-up, I just wanted to go back to the gross margin discussion, specifically around this year and the cadence. Thank you for the color on the 400 basis points we should expect for the full year, a little bit of pressure in Q1 and improve thereafter. But any more color on the puts and takes we should think about and the magnitude of that improvement as we go through each quarter? Thank you.
Leah Jordan: Okay, great. We'll look forward to that. I think for my follow-up, I just wanted to go back to the gross margin discussion, specifically around this year and the cadence. Thank you for the color on the 400 basis points we should expect for the full year, a little bit of pressure in Q1 and improve thereafter. But any more color on the puts and takes we should think about and the magnitude of that improvement as we go through each quarter? Thank you.
Speaker #8: Great. We'll look forward to that. I think for my follow-up, I just wanted to go back to the gross margin discussion. Specifically around this year and the cadence, thank you for the color on the 400 basis points.
Speaker #8: We should expect for the full year, a little bit of pressure in one Q and improve thereafter. But any more color on the puts and takes we should think about in the magnitude of that improvement as we go through each quarter?
Speaker #8: Thank you.
Speaker #6: Sure. You bet. And I can take that one. As we kind of look through the flow of the quarters, we're going to see the first half is going to be or excuse me, Q1 will be the strongest from a top-line standpoint.
Steven Voskuil: Sure, you bet. I can take that one. As we kind of look through the flow of the quarters, we're gonna see, you know, the first half is gonna be - or excuse me, Q1 will be the strongest from a top-line standpoint. You know, we're gonna carry the momentum out of the fourth quarter, feel really good about our visibility in the first quarter on the top line. But margin and earnings are gonna remain under pressure because we still are gonna have higher cost inventory. We know we're still gonna have tariffs in that inventory, so we'll see margin and earnings pressured in Q1.
Steven Voskuil: Sure, you bet. I can take that one. As we kind of look through the flow of the quarters, we're gonna see, you know, the H1 is gonna be - or excuse me, Q1 will be the strongest from a top-line standpoint. You know, we're gonna carry the momentum out of the fourth quarter, feel really good about our visibility in the first quarter on the top line. But margin and earnings are gonna remain under pressure because we still are gonna have higher cost inventory. We know we're still gonna have tariffs in that inventory, so we'll see margin and earnings pressured in Q1.
Speaker #6: We're going to carry the momentum out of the fourth quarter, feel really good about our visibility in the first quarter on the margin and earnings are going to remain under pressure because we still are going to have higher cost top line.
Speaker #6: inventory. We're still going to have tariffs in that inventory. So we'll see margin and earnings pressured in Q1. But As we go to Q2, the top-line growth is going to moderate slightly.
Steven Voskuil: As we go to Q2, the top line growth is gonna moderate slightly, but you're gonna see an inflection from a gross margin standpoint, and we expect to see, you know, double-digit EPS growth for the balance of the year from there. Of course, you know, we know we got tougher comps in the second half, but we, you know, factored that in as we, we think about this flow. So think about momentum carrying through the first half on the top line, second quarter inflection from a, from a profitability standpoint. And then, you know, we'd expect to see our, our brand investment up double digits across the quarters, and this reflects some of those investments we talked about earlier.
Steven Voskuil: As we go to Q2, the top line growth is gonna moderate slightly, but you're gonna see an inflection from a gross margin standpoint, and we expect to see, you know, double-digit EPS growth for the balance of the year from there. Of course, you know, we know we got tougher comps in the second half, but we, you know, factored that in as we, we think about this flow. So think about momentum carrying through the first half on the top line, second quarter inflection from a, from a profitability standpoint. And then, you know, we'd expect to see our, our brand investment up double digits across the quarters, and this reflects some of those investments we talked about earlier.
Speaker #6: But you're going to see an inflection from a gross margin standpoint, and we expect to see double-digit EPS growth for the balance of the year from there.
Speaker #6: Of course, we know we got tougher comps in the second half. But we factored that in as we think about this flow. So think about momentum carrying through the first half on the top line.
Speaker #6: Second-quarter inflection from a profitability standpoint. And then we'd expect to see our brand investment up double digits across the quarters. And this reflects some of those investments we talked about.
Speaker #6: earlier. That's very helpful.
[Analyst] (Piper Sandler): That's very helpful. Thank you.
Leah Jordan: That's very helpful. Thank you.
Speaker #8: Thank you.
Speaker #6: You
Steven Voskuil: You bet.
Steven Voskuil: You bet.
Speaker #6: bet. Thank you.
Operator: Thank you. Our next question comes from the line of Max Gumport with BNP Paribas. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Max Gumport with BNP Paribas. Please proceed with your question.
Speaker #1: Our next question comes from a line of Max Gumport with BNP Paribas. Please proceed with your
Speaker #1: question. Hey.
Max Gumport: Hey, thanks for the question. So clearly, elasticity so far have been encouraging, and I'm not expressing my own view here, but one that I hear from some investors. I think there's a narrative out there that once you get through this pricing cycle, you'll be unable to grow your, your chocolate volumes for several years. It's, you know, similar to what we're seeing in other packaged food categories currently. I realize we're, you know, we're a long way away from that point in time, but I'm just curious what pushback you'd offer to that narrative, and if there's any historical precedents you're focused on. Thank you.
Max Gumport: Hey, thanks for the question. So clearly, elasticity so far have been encouraging, and I'm not expressing my own view here, but one that I hear from some investors. I think there's a narrative out there that once you get through this pricing cycle, you'll be unable to grow your, your chocolate volumes for several years. It's, you know, similar to what we're seeing in other packaged food categories currently. I realize we're, you know, we're a long way away from that point in time, but I'm just curious what pushback you'd offer to that narrative, and if there's any historical precedents you're focused on. Thank you.
Speaker #6: Thanks for the question. So clearly, you asked this loose so far. It's been encouraging. And I'm not expressing my own view here, but one that I hear from some investors.
Speaker #6: I think there's a narrative out there that once you get through this pricing cycle, you'll be unable to grow your chocolate volumes for several packaged food categories years.
Speaker #6: It's similar to what we're seeing in other currently. I realize we're a long way away from that point in time. But I'm just curious what pushback you'd offer to that narrative.
Speaker #6: And if there's any historical precedents you're focused on, thank you. Yeah. Let me break it down. Look, we like where we're at with really the big categories across our confection business and our salty business.
Kirk Tanner: Yeah, let me break it down. Look, you know, we like where we're at with really the big categories across our confection business and our salty business. The confection category has been very resilient over time, and it remains resilient. It is an emotional category that consumers look for. If you think about where the growth is right now in retail, it really is around functional and emotional brands. And so that gives you confidence to see that continue to grow. If you just look historically, it's been a very resilient category, so a really good category. On the salty side of the business, I think it's really important to be in the right places in the category. Permissible, better for you, and portion control, those are areas that continue to leverage growth. Consumers are willing to pay for that.
Kirk Tanner: Yeah, let me break it down. Look, you know, we like where we're at with really the big categories across our confection business and our salty business. The confection category has been very resilient over time, and it remains resilient. It is an emotional category that consumers look for. If you think about where the growth is right now in retail, it really is around functional and emotional brands. And so that gives you confidence to see that continue to grow. If you just look historically, it's been a very resilient category, so a really good category. On the salty side of the business, I think it's really important to be in the right places in the category. Permissible, better for you, and portion control, those are areas that continue to leverage growth. Consumers are willing to pay for that.
Speaker #6: The confection category has been very resilient over time and it remains resilient. It is an emotional category that consumers look for. And if you think about where the growth is right now in retail, it really is around functional and emotional brands.
Speaker #6: And so that gives you confidence to see that continue to grow. And if you just look historically, it's been very resilient category. So really good category.
Speaker #6: On the salty side of the business, I think it's really important to be in the right places in the category. Permissible, better for you, portion control, those are areas that continue to leverage growth.
Speaker #6: Consumers are willing to pay for that. That's where the growth is. And that's where our brands are positioned in the category. Give you a couple of examples.
Kirk Tanner: That's where the growth is, and that's where our brands are positioned in the category. Give you a couple examples. SkinnyPop is doing exceptionally well. It's a real relevant... Popcorn's very relevant with consumers today and will be long term as we see, you know, those consumer trends and what they're looking for. Dot's Pretzels really shows how you can reinvent a category and drive growth. Dot's is now the number one pretzel in the category, and it is about tying into the relevance of what consumers are looking for. That, of course, you, you're gonna hear more about kind of the long term at, and I'm really plugging this Investor Day, so I hope you're all, I hope you're all coming.
Kirk Tanner: That's where the growth is, and that's where our brands are positioned in the category. Give you a couple examples. SkinnyPop is doing exceptionally well. It's a real relevant... Popcorn's very relevant with consumers today and will be long term as we see, you know, those consumer trends and what they're looking for. Dot's Pretzels really shows how you can reinvent a category and drive growth. Dot's is now the number one pretzel in the category, and it is about tying into the relevance of what consumers are looking for. That, of course, you, you're gonna hear more about kind of the long term at, and I'm really plugging this Investor Day, so I hope you're all, I hope you're all coming.
Speaker #6: Skinny Pop is doing exceptionally well. It's a real relevant popcorn, very relevant with consumers today and will be long-term as we see those consumer trends and what they're looking for.
Speaker #6: Dot's Pretzels really shows how you can reinvent a category and drive growth. Dot's is now the number one pretzel in the category. And it is about tying into the relevance of what consumers are looking for.
Speaker #6: long-term at and I'm really plugging this investor day. So I hope you're all coming. But So that, of course, we'll walk through kind of the long-term plan and how we see the categories and how we see the sustainability of that over the long-term horizon.
Kirk Tanner: We'll walk through kind of the long-term plan and how we see the categories and how we see the sustainability of that over the long-term horizon.
Kirk Tanner: We'll walk through kind of the long-term plan and how we see the categories and how we see the sustainability of that over the long-term horizon.
Speaker #6: Yeah. And I think we'll have an opportunity there too to talk about how we can play offense on some of the categories that are going to see more growth.
Steven Voskuil: Yeah, and I think we'll have an opportunity there, too, to talk about how we can play offense on some of the categories that are gonna see more growth. So we know sweets, better for you, premium, some of the functional products that we're gonna talk about, I think we're gonna have a really good story about how they can lean into the volume story as well.
Steven Voskuil: Yeah, and I think we'll have an opportunity there, too, to talk about how we can play offense on some of the categories that are gonna see more growth. So we know sweets, better for you, premium, some of the functional products that we're gonna talk about, I think we're gonna have a really good story about how they can lean into the volume story as well.
Speaker #6: So we know sweets, better for you, premium, some of the functional products that we're going to talk about. I can lean into the volume story as well.
Speaker #4: Great. Thank you. And then in Europe, where I realize you don't have much of a chocolate presence, but it's a market where we it's an interesting corollary because in Europe, we saw chocolate pricing get taken earlier in a sizable way.
Max Gumport: Great. Thank you. And then in Europe, where I realize you don't have much of a chocolate presence, but it's, you know, a market, an interesting corollary, because in Europe, we saw chocolate pricing get taken earlier in a sizable way, and initially, elasticities were quite encouraging, as you're seeing in the US currently for your own chocolate business. But in the middle of 2025, we started to see price elasticities ramp up meaningfully in Europe ahead of where the industry expected them to be. So I'm sure you're studying consumer behavior over there, even if you don't have much of a presence. I'm curious what your learnings are that you've taken, and if there's any factors you're seeing that make the consumer in Europe and how they approach chocolate different from the US consumer?
Max Gumport: Great. Thank you. And then in Europe, where I realize you don't have much of a chocolate presence, but it's, you know, a market, an interesting corollary, because in Europe, we saw chocolate pricing get taken earlier in a sizable way, and initially, elasticities were quite encouraging, as you're seeing in the US currently for your own chocolate business. But in the middle of 2025, we started to see price elasticities ramp up meaningfully in Europe ahead of where the industry expected them to be. So I'm sure you're studying consumer behavior over there, even if you don't have much of a presence. I'm curious what your learnings are that you've taken, and if there's any factors you're seeing that make the consumer in Europe and how they approach chocolate different from the US consumer?
Speaker #4: elasticities were quite And initially, encouraging as you're seeing in the US currently for your own chocolate business. But in the middle of '25, we started to see price elasticities ramp up meaningfully in Europe ahead of where the industry expected them to be.
Speaker #4: So I'm sure you're studying consumer behavior over there, even if you don't have much of a presence. I'm curious what you're learnings are that you've taken.
Speaker #4: And if there's any factors you're seeing that make me consumer in Europe and how they approach chocolate different from the US
Speaker #4: consumer. Thanks very much.
[Analyst] (J.P. Morgan): ... Thanks very much.
Max Gumport: ... Thanks very much.
Speaker #6: Yeah. Yeah. Thanks for
Kirk Tanner: Yeah, yeah, thanks for that question. Yes, and we are definitely studying that. Look, we've taken a very patient approach as we've, you know, the impact of cocoa and the pricing. So we've taken a very patient approach through the lens of the consumer. The categories, though, in the US, look very different than Europe. There's more brand differentiation. So you look at the brands across the portfolio, there's a lot high level of differentiation. There's variety across the portfolio, and the top players have higher market share. Europe has a concentration of chocolate tablet bars and private label. But there is a very distinguished difference between the brands in the US and the role of each of those brands play in the confection category. So there is a big difference.
Kirk Tanner: Yeah, yeah, thanks for that question. Yes, and we are definitely studying that. Look, we've taken a very patient approach as we've, you know, the impact of cocoa and the pricing. So we've taken a very patient approach through the lens of the consumer. The categories, though, in the US, look very different than Europe. There's more brand differentiation. So you look at the brands across the portfolio, there's a lot high level of differentiation. There's variety across the portfolio, and the top players have higher market share. Europe has a concentration of chocolate tablet bars and private label. But there is a very distinguished difference between the brands in the US and the role of each of those brands play in the confection category. So there is a big difference.
Speaker #6: that question. Yes. And we are definitely studying that. Look, we've taken a very patient approach as we've the impact of cocoa and the pricing.
Speaker #6: So we've taken a very patient approach through the lens of the consumer. The categories, though, in the US look very different than Europe. There's more brand differentiation.
Speaker #6: So you look at the brands across the portfolio, there's a lot high level of differentiation. There's a variety across the portfolio. And the top players have higher market share.
Speaker #6: Europe has a tablet bars and private concentration of chocolate label. But there is a very distinguished difference between the brands in the US and the role of each of those brands play in the confection category.
Speaker #6: So there is a big difference. And the category skews premium in Europe. And it skews mainstream in the US. Relative affordability is still a Again, we mentioned that 75% of our portfolio is under $4, very accessible to
Kirk Tanner: The category skews premium in Europe, and it skews mainstream in the US. Relative affordability is still a key component of the category. Again, you know, we mentioned that 75% of our portfolio is under $4, very accessible to consumers.
Kirk Tanner: The category skews premium in Europe, and it skews mainstream in the US. Relative affordability is still a key component of the category. Again, you know, we mentioned that 75% of our portfolio is under $4, very accessible to consumers.
Speaker #1: Thank
Operator: Thank you. Our next question comes from the line of Jim Salera with Stephens Inc. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Jim Salera with Stephens Inc. Please proceed with your question.
Speaker #1: You. Our next question comes from the line of consumers. Jim Solera with Steven Zink, please proceed with your question.
Speaker #1: question. Good morning, Steve.
Jim Salera: Good. Hi, Steve. Good morning. Thanks for taking our question.
Jim Salera: Good. Hi, Steve. Good morning. Thanks for taking our question.
Speaker #7: Good morning. Thanks for taking our question.
Kirk Tanner: Good morning.
Kirk Tanner: Good morning.
Speaker #6: Good
Speaker #6: Good morning. Good morning, I’d like to ask a little bit.
Jim Salera: I wanted to ask a little bit around SNAP. As you know, we roll into 2026, there's some incremental rule changes, I think, both on work requirements and some states restricting what you can buy with SNAP dollars. Just walk us through, I guess, first, the overall percentage of your portfolio that is exposed to SNAP dollars, and maybe how you're thinking about those changes in 2026, since they're all relatively new to the program.
Jim Salera: I wanted to ask a little bit around SNAP. As you know, we roll into 2026, there's some incremental rule changes, I think, both on work requirements and some states restricting what you can buy with SNAP dollars. Just walk us through, I guess, first, the overall percentage of your portfolio that is exposed to SNAP dollars, and maybe how you're thinking about those changes in 2026, since they're all relatively new to the program.
Speaker #7: around SNAP as we roll into '26. There's some incremental rule changes, I think, both on work requirements and some states restricting what you can buy with SNAP first, the overall percentage of your portfolio that is exposed to SNAP dollars and maybe how you're thinking about those changes in 2026 since they're all relatively new to the program?
Speaker #6: Yeah. Thanks,
Kirk Tanner: Yeah. Thanks, Jim. The SNAP, let me just give you what we know on SNAP, and this is how we're seeing it. Look, our early assessment in the states where waivers are in place is still pretty noisy. It's been just since January, and we're looking at winter storm implications, and really the difference across retailers as they implement it. We've been proactively spending time with customers and consumers in these states to get ahead of the choices they're making, and we are readying our strategies to deliver for them. We have factored the SNAP waiver adoption into our outlook, and we'll continue to monitor that and provide updates over the course of the year. So to date, only two states have implemented SNAP waivers for candy of the 12 states that have waivers approved.
Kirk Tanner: Yeah. Thanks, Jim. The SNAP, let me just give you what we know on SNAP, and this is how we're seeing it. Look, our early assessment in the states where waivers are in place is still pretty noisy. It's been just since January, and we're looking at winter storm implications, and really the difference across retailers as they implement it. We've been proactively spending time with customers and consumers in these states to get ahead of the choices they're making, and we are readying our strategies to deliver for them. We have factored the SNAP waiver adoption into our outlook, and we'll continue to monitor that and provide updates over the course of the year. So to date, only two states have implemented SNAP waivers for candy of the 12 states that have waivers approved.
Speaker #6: seeing it. Look, our early assessment in And this is how we're the states where waivers are in place is still pretty noisy. It's been just since January.
Speaker #6: And we're looking at winter storm implications. And really, the difference across retailers is how they implement it. We've been proactively spending time with customers and consumers in these states to get ahead of the choices they're making.
Speaker #6: And we are readying our strategies to dollars. deliver for them. We have
Speaker #6: factored the SNAP waiver adoption into our outlook. Can you just walk us through, I guess, provide updates over the course of the year. So to date, only two states have implemented SNAP waivers for candy of the 12 states that have waivers approved.
Speaker #6: So in total, throughout the course of the year, there'll be 12 states that are impacted—two states so far. We'll gather those insights. Again, it's pretty early days.
Kirk Tanner: So in total, throughout the course of the year, there'll be 12 states that are impacted. 2 states so far. We'll gather those insights. Again, it's pretty early days, but it, I would tell you, it's a manageable headwind, and it's contemplated in our outlook.
Kirk Tanner: So in total, throughout the course of the year, there'll be 12 states that are impacted. 2 states so far. We'll gather those insights. Again, it's pretty early days, but it, I would tell you, it's a manageable headwind, and it's contemplated in our outlook.
Speaker #6: But I would tell you it's a manageable headwind. And it's contemplated in our outlook.
Speaker #4: Great. And then shifting gears a little bit, you called out the 10 different cultural and seasonal events this year to boost engagement. Are you able to quantify how much of an incremental uplift we should see from kind of that more filled calendar relative to what a normalized year would
Jim Salera: Great. And then shifting gears a little bit, you called out the, you know, 10 different cultural and seasonal events this year to boost engagement. Are you able to quantify how much of an incremental uplift we should see from kind of that more filled calendar relative to, you know, what like a normalized year would be?
Jim Salera: Great. And then shifting gears a little bit, you called out the, you know, 10 different cultural and seasonal events this year to boost engagement. Are you able to quantify how much of an incremental uplift we should see from kind of that more filled calendar relative to, you know, what like a normalized year would be?
Speaker #4: be? Yeah.
Speaker #6: I think it looked if you kind of look at our outlook, it's reflected in that outlook. Look, it continues to make our top-line robust.
Kirk Tanner: Yeah, I think it looks, if you kind of look at our outlook, it's reflected in that outlook. Look, it continues to make our top line robust. And because some of the, kind of the background on this is we have excellence in executing seasons, so we gained share across the seasons last year. But what makes it so great is we have these consumer-loved brands, coupled with great execution in the marketplace with our retail sales team. This gave us insight, like we have the opportunity to be a part of more cultural moments, and the Olympics, starting this weekend, is really the first of those. But we'll show up for NCAA Final Four, then we'll show up in the summer, celebrating 250-year anniversary of our country.
Kirk Tanner: Yeah, I think it looks, if you kind of look at our outlook, it's reflected in that outlook. Look, it continues to make our top line robust. And because some of the, kind of the background on this is we have excellence in executing seasons, so we gained share across the seasons last year. But what makes it so great is we have these consumer-loved brands, coupled with great execution in the marketplace with our retail sales team. This gave us insight, like we have the opportunity to be a part of more cultural moments, and the Olympics, starting this weekend, is really the first of those. But we'll show up for NCAA Final Four, then we'll show up in the summer, celebrating 250-year anniversary of our country.
Speaker #6: And because some of the kind of the background on this is, we have excellence in executing seasons. So we gained share across the seasons last year.
Speaker #6: But what makes it so great is we have these consumer-love brands coupled with great execution in the marketplace with our retail sales team. This gave us insight.
Speaker #6: It's like we have the opportunity to be a part of more cultural moments and the Olympics starting this weekend is really the first of those.
Speaker #6: But we'll show up for NCAA Final Four. Then we'll show up in the summer celebrating 250-year anniversary of our country. Our brands are expected by consumers to show up in these big cultural moments.
Kirk Tanner: Our brands are expected by consumers to show up in these big cultural moments, and connecting our brands to these cultural moments gives us the license to have more activity throughout the year in these cultural moments, in addition to seasons. It has this almost always on approach, where you can see our brands, our salty and our sweet brands together in the marketplace, celebrating these moments. Kind of that's the background of that.
Kirk Tanner: Our brands are expected by consumers to show up in these big cultural moments, and connecting our brands to these cultural moments gives us the license to have more activity throughout the year in these cultural moments, in addition to seasons. It has this almost always on approach, where you can see our brands, our salty and our sweet brands together in the marketplace, celebrating these moments. Kind of that's the background of that.
Speaker #6: And connecting our brands to these cultural moments gives us the license to have more activity throughout the year in these cultural moments in addition to seasons.
Speaker #6: And it has this almost always-on approach where you can see our brands, our salty and our sweet brands together, in the marketplace celebrating these moments.
Speaker #6: And kind of, that's the background of
Speaker #6: that.
Speaker #4: Great.
Jim Salera: Great. I appreciate the call. I'll hop back in the queue.
Jim Salera: Great. I appreciate the call. I'll hop back in the queue.
Speaker #4: I appreciate the color. I'll hop back in the
Speaker #4: queue. Thank
Operator: Thank you. Our next question comes from the line of Tom Palmer with J.P. Morgan. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Tom Palmer with J.P. Morgan. Please proceed with your question.
Speaker #1: you. Our next question comes from a line of Tom Palmer with JP Morgan. Please proceed with your question.
Speaker #8: Good morning. Thanks for the question. You discussed plans for double-digit ANC increases and then less I missed it, your answer to Andrew suggests that your pricing plans some of which have not rolled out still promotions.
[Analyst] (J.P. Morgan): Good morning. Thanks for the questions. You discussed plans for double-digit ANC increases. And then, unless I missed it, your answer to Andrew suggests that your pricing plans, some of which have not rolled out, still hold. I did want to ask on promotions: How do you consider the possibility of stepped-up promotions later this year, and maybe balancing the optionality of promotions versus allocating towards marketing dollars?
Tom Palmer: Good morning. Thanks for the questions. You discussed plans for double-digit ANC increases. And then, unless I missed it, your answer to Andrew suggests that your pricing plans, some of which have not rolled out, still hold. I did want to ask on promotions: How do you consider the possibility of stepped-up promotions later this year, and maybe balancing the optionality of promotions versus allocating towards marketing dollars?
Speaker #8: How do you consider the hold. I did want to ask on this year and maybe balancing the optionality of promotions versus allocating towards marketing dollars?
Kirk Tanner: Yeah. So let me answer the advertising and the investment we're making there. So we've got great programming around building our big brands, like we talked about Hershey and Reese's. Plus, we have these programs, these cultural tentpole moments, that we will support throughout the course of the year. It is a balance of delivering pull and push. So you think about that demand creation, we're very cognizant, and we have great return on these investments to deliver that, and that delivers the top line. And then from an execution standpoint, I would tell you that the category remains very rational from a pricing standpoint. We'll continue to leverage promotion to drive excitement with consumers and deliver that right price point for them.
Kirk Tanner: Yeah. So let me answer the advertising and the investment we're making there. So we've got great programming around building our big brands, like we talked about Hershey and Reese's. Plus, we have these programs, these cultural tentpole moments, that we will support throughout the course of the year. It is a balance of delivering pull and push. So you think about that demand creation, we're very cognizant, and we have great return on these investments to deliver that, and that delivers the top line. And then from an execution standpoint, I would tell you that the category remains very rational from a pricing standpoint. We'll continue to leverage promotion to drive excitement with consumers and deliver that right price point for them.
Speaker #6: me ask. Let me answer the advertising and the investment we're making there. Yeah. So let So we got great programming around building our big brands like we talked about, Hershey and Reese's.
Speaker #6: Plus, we have these programs and these cultural temple moments that we will support throughout the course of the year. It is a balance of delivering pull and push.
Speaker #6: So you think about that demand creation. We're very cognizant and we have great return on these investments to deliver that. And that delivers the top line.
Speaker #6: And then from an execution standpoint, I would tell you that the category remains very rational from a pricing standpoint. We'll continue to leverage promotion to drive excitement with consumers.
Speaker #6: And deliver that right price point for them. And we'll be in concert with the execution across our seasons in these temple moments throughout the year.
Kirk Tanner: We'll, you know, be in concert with the execution across our seasons and these tentpole moments throughout the year, but I would expect overall a very rational category.
Kirk Tanner: We'll, you know, be in concert with the execution across our seasons and these tentpole moments throughout the year, but I would expect overall a very rational category.
Speaker #6: But I would expect overall very rational on the first part of your question, just to be category. Yep. clear, all the pricing has been sold in.
Steven Voskuil: ... Yep. And I would just say, on the first part of your question, you know, just to be clear, all the pricing's been sold in, so that's, that's not a risk. There's nothing else pricing-wise that's gonna drop.
Steven Voskuil: ... Yep. And I would just say, on the first part of your question, you know, just to be clear, all the pricing's been sold in, so that's, that's not a risk. There's nothing else pricing-wise that's gonna drop.
Speaker #6: And I would just say So that's not a risk. There's nothing else pricing-wise that's going to drop.
Speaker #8: Thanks for that. In the prepared remarks, there was a comment about expected low single-digit sales growth for international. I wondered if maybe you could provide some color on expectations in the other two segments.
[Analyst] (J.P. Morgan): Thanks for that. In the prepared remarks, there was a comment about expected low single-digit sales growth for international. I wondered if maybe you could provide some color on expectations in the other two segments. And then also, there was a comment about profit recovery for international, and I wondered to what extent that might reflect incremental pricing actions, because they were relatively modest as we look at 2025. Thank you.
Tom Palmer: Thanks for that. In the prepared remarks, there was a comment about expected low single-digit sales growth for international. I wondered if maybe you could provide some color on expectations in the other two segments. And then also, there was a comment about profit recovery for international, and I wondered to what extent that might reflect incremental pricing actions, because they were relatively modest as we look at 2025. Thank you.
Speaker #8: And then also, there was a comment about profit recovery for international. And I wondered to what extent that might reflect incremental pricing actions because they were relatively modest as we look at 2025.
Speaker #8: Thank you.
Speaker #6: Sure. I can take maybe the segment piece first. So just to share a couple of headlines. So organic sales growth on the confection segment, around around 3%.
Steven Voskuil: Sure. I can take maybe the segment piece first. So and just to share a couple headlines. So organic sales growth on the confection segment, around 3%, salty snacks, mid-single digits, international, down low single digits. So that's the organic top line. From an EBIT standpoint, we've got all double digits across the segments year-over-year, so that's some of the highlights on the segments. On international, you know, we've taken a lot of price this year, and you know, that's part of what we're seeing in terms of some of the volume impact from that. You know, we play in the premium part of the market. We've got cocoa-intensive products, and so we've been, in some cases, stronger on pricing in order to make sure we're, we're setting up a, a good, strong future P&L.
Steven Voskuil: Sure. I can take maybe the segment piece first. So and just to share a couple headlines. So organic sales growth on the confection segment, around 3%, salty snacks, mid-single digits, international, down low single digits. So that's the organic top line. From an EBIT standpoint, we've got all double digits across the segments year-over-year, so that's some of the highlights on the segments. On international, you know, we've taken a lot of price this year, and you know, that's part of what we're seeing in terms of some of the volume impact from that. You know, we play in the premium part of the market. We've got cocoa-intensive products, and so we've been, in some cases, stronger on pricing in order to make sure we're, we're setting up a, a good, strong future P&L.
Speaker #6: Salty snacks, mid-single digits, international down low single digits. So that's the organic top line. From an EBIT standpoint, we've got all double-digit across the segments, year over year.
Speaker #6: So that's kind of the highlights On international, we've taken a lot of price this year. And that's part volume impact from that. We play in the premium part of the market.
Speaker #6: We've got cocoa-intensive products. And so we've been, in some cases, stronger on pricing in order to make sure we're setting up a good, strong very thoughtful about trying future P&L.
Steven Voskuil: We've been very thoughtful about trying to focus on the markets where we believe we have the best case to win, and making some choices on go-to-market to, you know, that, that, again, are thinking about the future and the profitability. Despite the challenges, we've had some wins in the international market, and we'll talk about some of those and how we're expanding on those when we get to March. But we do have a mix of sort of recovering for cocoa pricing, and then also optimizing the portfolio itself to make sure that as we look to the future, you know, we're investing behind our big brand, like Reese's, and also our core markets with a streamlined route to market.
Steven Voskuil: We've been very thoughtful about trying to focus on the markets where we believe we have the best case to win, and making some choices on go-to-market to, you know, that, that, again, are thinking about the future and the profitability. Despite the challenges, we've had some wins in the international market, and we'll talk about some of those and how we're expanding on those when we get to March. But we do have a mix of sort of recovering for cocoa pricing, and then also optimizing the portfolio itself to make sure that as we look to the future, you know, we're investing behind our big brand, like Reese's, and also our core markets with a streamlined route to market.
Speaker #6: To focus on the markets where we believe we have the best case to win, and making some choices on go-to-market. We've been to that, again, are thinking about the future and the profitability.
Speaker #6: Despite the challenges, we've had some wins in the international market. We'll talk about some of those and how we're expanding on those when we get to March.
Speaker #6: But we do have a mix of sort of recovering for cocoa, pricing, and then also optimizing the portfolio itself to make sure that as we look to the future, we're investing behind our big brand like Reese and also our core markets with a streamlined route to market.
Speaker #6: Yeah. Let me add on a couple of things on international. Look, I'm really bullish on the opportunity that we have internationally. I look at our track record right now just from how we're performing in the markets, our key markets, and we're gaining share, gaining share across Canada, Mexico, Brazil, the UK.
Kirk Tanner: Yeah, let me add on a couple of things on international. Look, I'm really bullish on the opportunity that we have internationally. I look at our track record right now, just from how we're performing in the markets, our key markets, and we're gaining share. Gaining share across Canada, Mexico, Brazil, the UK. I think those are really important proof points that we have the opportunity to do that. We're gonna bring a focused strategy on our international business in March that really articulates how we're gonna make investments and why we have a right to win in these markets. But more to come.
Kirk Tanner: Yeah, let me add on a couple of things on international. Look, I'm really bullish on the opportunity that we have internationally. I look at our track record right now, just from how we're performing in the markets, our key markets, and we're gaining share. Gaining share across Canada, Mexico, Brazil, the UK. I think those are really important proof points that we have the opportunity to do that. We're gonna bring a focused strategy on our international business in March that really articulates how we're gonna make investments and why we have a right to win in these markets. But more to come.
Speaker #6: I think those are really important. Proof points that we have the opportunity to do that. We're going to bring a focused strategy on our international business in March that really articulates how we're going to make investments and why we have a right to win in these markets.
Speaker #6: But more to
Speaker #6: come. Thank
Speaker #8: you.
[Analyst] (J.P. Morgan): Thank you.
Tom Palmer: Thank you.
Speaker #1: Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.
Speaker #1: question.
Speaker #9: Thank you. Good
Alexia Howard: Thank you. Good morning.
Operator: Thank you. Good morning.
Speaker #10: Good morning. morning.
Steven Voskuil: Good morning.
Steven Voskuil: Good morning.
Alexia Howard: I want to come back to guidance. I know you laid out some of the flexibility or ways that, you know, you are trying to allow for risks and capture those. But curious, not to get too greedy, if there are expectations where you can point to potential upside, and maybe also specifically, how to think about buybacks. I know you said there were not any in the last quarter, but you mentioned the authorization that remains. Are any of those included in the outlook for 2026?
Speaker #9: Welcome back. I want to come back to guidance. I know you laid out some of the flexibility or ways that you're trying to allow for risks and capture those.
Steven Voskuil: I want to come back to guidance. I know you laid out some of the flexibility or ways that, you know, you are trying to allow for risks and capture those. But curious, not to get too greedy, if there are expectations where you can point to potential upside, and maybe also specifically, how to think about buybacks. I know you said there were not any in the last quarter, but you mentioned the authorization that remains. Are any of those included in the outlook for 2026?
Speaker #9: But curious, not to get too greedy, if there's expectations where you can point to potential upside and maybe also specifically how to think about buybacks.
Speaker #9: I know you said there weren't any in the last quarter, but you mentioned the authorization that remains or any of those included in the outlook for
Speaker #9: 2026? Sure.
Steven Voskuil: Sure. So I'll come on to buybacks. On the upside, we touched on some of these already. I mean, if elasticities were to hold in the sort of space they're in now, that would be a potential upside. Even the macros, although, you know, our outlook is to expect the macros, like SNAP and GLP-1s, to have a growing impact across the quarters, which I think is reasonable. If that is slower or less impact, I think that's upside to what we've tried to prudently build into the outlook. Things like the performance on innovation, media, all these in-store activations and temp pulls that we talked about, again, our goal is to execute all those, to try to beat the plan, but those would be potential upsides.
Steven Voskuil: Sure. So I'll come on to buybacks. On the upside, we touched on some of these already. I mean, if elasticities were to hold in the sort of space they're in now, that would be a potential upside. Even the macros, although, you know, our outlook is to expect the macros, like SNAP and GLP-1s, to have a growing impact across the quarters, which I think is reasonable. If that is slower or less impact, I think that's upside to what we've tried to prudently build into the outlook. Things like the performance on innovation, media, all these in-store activations and temp pulls that we talked about, again, our goal is to execute all those, to try to beat the plan, but those would be potential upsides.
Speaker #6: So I'll come on to buybacks. On the upsides, we touched on some of these already. I mean, it's the elasticities. We're to hold in the sort of space they're in now.
Speaker #6: be a potential upside. Even the macros, although That would our outlook is to expect the macros like SNAP and GLP-1s to have a growing impact across the quarters, which I think is reasonable.
Speaker #6: If that is slower or less impact, I think that's upside to what we've tried to prudently build into the outlook. Things like the performance on innovation, media, all these in-store activations and temples that we've talked about.
Speaker #6: Again, our goal is to execute all those to try to beat the plan. But those would be potential upsides. And then as cost-savings goals.
Steven Voskuil: And then, you know, as always, we want to exceed our productivity and cost savings goals. So we've got what I think are good, challenging objectives there to go get, but our supply chain teams are fantastic, and they're gonna go hard against trying to beat those. So, so I think those are all the kind of things we would point to. When I look at it in total, I feel like as we look at the guide, you know, it's balanced. We're trying to recognize there are up-upsides and opportunities to beat in some areas, but also, you know, there are still some unknowns that we wanna make sure we can contend with, and that's where the agility piece comes in. On buybacks, you know what?
Steven Voskuil: And then, you know, as always, we want to exceed our productivity and cost savings goals. So we've got what I think are good, challenging objectives there to go get, but our supply chain teams are fantastic, and they're gonna go hard against trying to beat those. So, so I think those are all the kind of things we would point to. When I look at it in total, I feel like as we look at the guide, you know, it's balanced. We're trying to recognize there are up-upsides and opportunities to beat in some areas, but also, you know, there are still some unknowns that we wanna make sure we can contend with, and that's where the agility piece comes in. On buybacks, you know what?
Speaker #6: So we've got what I think are good always. We want to exceed our productivity and challenging objectives that are there to go get, but our supply chain teams are fantastic and they're going to go hard against trying to beat those.
Speaker #6: So I think those are all the kind of things we would point to. When I look at it in total, I feel like as we look at the guide, it's balanced.
Speaker #6: We're trying to recognize there are upsides and opportunities to beat in some areas, but also there are still some unknowns that we want to make sure we can contend with.
Speaker #6: And that's where the agility piece comes in. On buybacks, I'll just maybe just say our capital allocation strategy is kind of resetting back to normal a little bit.
Steven Voskuil: I'll just maybe just say our capital allocation strategy is kind of resetting back to normal a little bit, and so, you know, but without some of the pressure, cash pressure in particular, on tariffs and cocoa. And so, you know, as you can tell from the guide, you know, our focus in job one is to make sure we're funding the business and driving good, smart, long-term investment in the organic business. You know, maintaining a posture of agility relative to inorganic growth opportunities. And, you know, we're integrating LesserEvil, that's going very well. We're gonna continue to look for those sort of opportunistic places. You see CapEx kind of normalizing again back into the space where it should be.
Steven Voskuil: I'll just maybe just say our capital allocation strategy is kind of resetting back to normal a little bit, and so, you know, but without some of the pressure, cash pressure in particular, on tariffs and cocoa. And so, you know, as you can tell from the guide, you know, our focus in job one is to make sure we're funding the business and driving good, smart, long-term investment in the organic business. You know, maintaining a posture of agility relative to inorganic growth opportunities. And, you know, we're integrating LesserEvil, that's going very well. We're gonna continue to look for those sort of opportunistic places. You see CapEx kind of normalizing again back into the space where it should be.
Speaker #6: And so without some of the pressure, cash pressure in particular on tariffs and cocoa. And so as you can tell from the guide, our focus in job one is to make sure we're funding the business and driving good, smart, long-term investment in the organic business, maintaining a posture of agility, relative to inorganic growth opportunities, and we're integrating lesser evil.
Speaker #6: That's going very well. We're going to continue to look for those sort of opportunistic places. You see CapEx kind of normalizing again. Back into the space where it should be.
Speaker #6: You see us focused on working capital efficiency like we are every year, driving savings. Dividend returning to growth, which is very important to us.
Steven Voskuil: You see us focused on, you know, working capital efficiency like we are every year, driving savings, dividend returning to growth, which is very important to us, and pleased to see that. And we feel good about leverage and where we're at and the trajectory on leverage. So all that kind of comes then down to the repurchase, and as we've said in the past, you know, share repurchase is a great way to put tension in the capital allocation equation, right? We're not gonna warehouse the shareholders' money if we can't wisely invest it for the future; we're gonna give it back. And so, that conversation is now back on the table because we're gonna have strong cash flow.
Steven Voskuil: You see us focused on, you know, working capital efficiency like we are every year, driving savings, dividend returning to growth, which is very important to us, and pleased to see that. And we feel good about leverage and where we're at and the trajectory on leverage. So all that kind of comes then down to the repurchase, and as we've said in the past, you know, share repurchase is a great way to put tension in the capital allocation equation, right? We're not gonna warehouse the shareholders' money if we can't wisely invest it for the future; we're gonna give it back. And so, that conversation is now back on the table because we're gonna have strong cash flow.
Speaker #6: And pleased to see that. And we feel good about leverage and where we're at, and the trajectory on leverage. So all that kind of comes, then, down to the repurchase.
Speaker #6: And as we've said in the past, share purchase is a great way to put tension in the capital allocation equation, right? We're not going to warehouse the shareholders' money if we can't wisely invest it for the future.
Speaker #6: We're going to give it back. And so that conversation is now back on the table because we're going to have strong cash flow. We've got great investments supporting the business.
Steven Voskuil: We've got great investments supporting the business, and as the year progresses and we get a little bit more perspective on some of these macros and everything else, we'll reintroduce that conversation.
Steven Voskuil: We've got great investments supporting the business, and as the year progresses and we get a little bit more perspective on some of these macros and everything else, we'll reintroduce that conversation.
Speaker #6: And as the year progresses and we get a little bit more perspective on some of these macros and everything else, we'll reintroduce that conversation.
Speaker #9: No, that's a great color. And it sounds like you might be having an investor day soon, but I'm sure you'll get into this in, obviously, much more detail. Thanks.
Alexia Howard: Oh, that's great color. Thanks. And it sounds like you might be having an investor day soon, but and I'm sure you'll get into this in obviously much more detail. But as you lay out some of the investment opportunities and the reinvestments you're making this year, just at a high level, maybe can you give us a sense of how much we should expect a near-term impact versus longer term, and how that kind of fits into your thinking?
Steven Voskuil: Oh, that's great color. Thanks. And it sounds like you might be having an investor day soon, but and I'm sure you'll get into this in obviously much more detail. But as you lay out some of the investment opportunities and the reinvestments you're making this year, just at a high level, maybe can you give us a sense of how much we should expect a near-term impact versus longer term, and how that kind of fits into your thinking?
Speaker #9: But as you lay out some of the investment opportunities and the reinvestments you're making this year, just at a high level, maybe can you give us a sense of how much we should expect a near-term impact versus longer-term?
Speaker #9: And how that kind of fits into your
Speaker #6: Yeah, I'm
Steven Voskuil: Yeah, I'm gonna punt the details of that high to the investor day. What I would say is all of these investments have something to do for us now and are gonna have things to do for us for the future. You can imagine investments in R&D, you know, the near term on R&D investment may not be as big as we're gonna see in 2027 and 2028, but even so, we'll get some early insights from that. And so we'll unpack that more. But you know, think of these as multi-year investments, but they do have benefits even as we get to, especially the back end of this year.
Steven Voskuil: Yeah, I'm gonna punt the details of that high to the investor day. What I would say is all of these investments have something to do for us now and are gonna have things to do for us for the future. You can imagine investments in R&D, you know, the near term on R&D investment may not be as big as we're gonna see in 2027 and 2028, but even so, we'll get some early insights from that. And so we'll unpack that more. But you know, think of these as multi-year investments, but they do have benefits even as we get to, especially the back end of this year.
Speaker #6: going to punt the details of that probably to the thinking? investor day. What I would say is all of these investments have something to do for us now and are going to have things to do for us for the future.
Speaker #6: You can imagine investments in R&D. The near-term on R&D investment may not be as big as we're going to see in '27 and '28, but even so we'll get some early insights from that.
Speaker #6: And so we'll unpack that more, but think of these as multi-year investments. But they do have benefits, even as we get to especially the back end of this.
Speaker #6: year. Yeah, let me just
Kirk Tanner: Yeah, let me just add. You know, these investments are all about driving growth, top line growth, sustainable growth, modernizing our portfolio. So those, those are fundamentally what's backing this growth, is to fuel and keep heat on our brands with consumers, launch innovations that are relevant, and do the R&D so that we can continue to modernize our portfolio for the future, and staying relevant is so important. So it really is about fueling growth.
Kirk Tanner: Yeah, let me just add. You know, these investments are all about driving growth, top line growth, sustainable growth, modernizing our portfolio. So those, those are fundamentally what's backing this growth, is to fuel and keep heat on our brands with consumers, launch innovations that are relevant, and do the R&D so that we can continue to modernize our portfolio for the future, and staying relevant is so important. So it really is about fueling growth.
Speaker #9: add these investments are all about driving growth. sustainable growth, modernizing our Top-line growth, portfolio. So those are fundamentally what's backing this growth is to fuel and keep heat on our brands with consumers.
Speaker #9: Launch innovations that are relevant and do the R&D so that we can continue to modernize our portfolio for the future and staying relevant is so important.
Speaker #9: So it really is about fueling growth. Okay, great. Thanks so
Alexia Howard: Okay, great. Thanks so much.
Kirk Tanner: Okay, great. Thanks so much.
Speaker #9: much. Thank you.
Operator: Thank you. Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question.
Speaker #1: Our next question comes from the line of Alexia Howard with Bernstein. Please proceed with your question.
[Analyst] (Bernstein): Good morning, everyone.
Alexia Howard: Good morning, everyone.
Speaker #10: morning, everyone. Good Can I start with can
Steven Voskuil: Morning.
Alexia Howard: Morning.
[Analyst] (Bernstein): Can I start with the price elasticity in international markets versus the US? Do you have views on why the trends seem to be worse in the international markets and why they're better over here at the moment?
Alexia Howard: Can I start with the price elasticity in international markets versus the US? Do you have views on why the trends seem to be worse in the international markets and why they're better over here at the moment?
Speaker #10: the price elasticity in international markets versus the US? Good morning. why the trends seem to be worse in the international markets and why they're better over here at the moment?
Speaker #6: Yeah. Excuse me. Yeah, let me take that question. We discussed a little bit. There's a big difference between the two starters. categories for US is highly unique.
Kirk Tanner: Yeah. Excuse me. Yeah, let me take that question. You know, we, we discussed a little bit, there's a big difference between the two categories, first, for, you know, for starters. The category in the US is highly unique. The category is very differentiated across the portfolio. There's a lot of runway by brand across the landscape in the confection category in the US versus a high chocolate tablet bar market in Europe, along with the, you know, the impact of private label. So you think about affordability also is a real big lever, and the category is affordable. It skews mainstream. You know, our, our portfolio is still mostly under $4. That, I think, is a really big difference.
Kirk Tanner: Yeah. Excuse me. Yeah, let me take that question. You know, we, we discussed a little bit, there's a big difference between the two categories, first, for, you know, for starters. The category in the US is highly unique. The category is very differentiated across the portfolio. There's a lot of runway by brand across the landscape in the confection category in the US versus a high chocolate tablet bar market in Europe, along with the, you know, the impact of private label. So you think about affordability also is a real big lever, and the category is affordable. It skews mainstream. You know, our, our portfolio is still mostly under $4. That, I think, is a really big difference.
Speaker #6: The category is very a lot of runway by brand differentiated across the portfolio. There's in the confection category in the US versus a high chocolate tablet bar market in Europe.
Speaker #6: Along with the impact of private label. So you think about affordability also is a real big lever and the category is affordable. Excuse mainstream.
Speaker #6: Our portfolio is still mostly under $4. That, I think, is a really big difference. But the resiliency has been really positive for the category here in the US.
Kirk Tanner: But the resiliency has been really positive for the category here in the US, and, you know, what we've seen so far, we're encouraged by.
Kirk Tanner: But the resiliency has been really positive for the category here in the US, and, you know, what we've seen so far, we're encouraged by.
Speaker #6: And what we've seen so far we're encouraged by. I would portfolio in international in the elasticities, keeping in mind we are premium market positioning.
Steven Voskuil: I would say, you know, specific to our portfolio in international and the elasticities, you know, keeping in mind, we are premium market positioning, so we see some more elasticity there. We're relatively limited in scale in some regions and, you know, not a market leader. So those are factors with our portfolio in particular that drive higher elasticity.
Steven Voskuil: I would say, you know, specific to our portfolio in international and the elasticities, you know, keeping in mind, we are premium market positioning, so we see some more elasticity there. We're relatively limited in scale in some regions and, you know, not a market leader. So those are factors with our portfolio in particular that drive higher elasticity.
Speaker #6: So we see some more elasticity there. say specific to our We're relatively limited in scale in some regions and not a market leader. So those are factors with our portfolio in particular that drive higher
Speaker #10: Great. Thank you very much. I'll pass it on.
[Analyst] (Bernstein): Great. Thank you very much. I'll pass it on.
Alexia Howard: Great. Thank you very much. I'll pass it on.
Operator: Thank you. Our next question comes from the line of Matt Smith with Stifel. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Matt Smith with Stifel. Please proceed with your question.
Speaker #1: you. Our next question comes from the line of Matt Smith with Stevo. Please proceed with your question. Thank
Alexia Howard: Hi, good morning. Steve, you called out an increase in both marketing and operating costs through the year. It sounds like marketing up double digits is fairly evenly phased, but is there anything unique you'd call out on the operating costs? And, with operating costs growing in line with sales, is this a level of investment that as you exit 2026, allows some future leverage from SG&A? Thank you.
Matt Smith: Hi, good morning. Steve, you called out an increase in both marketing and operating costs through the year. It sounds like marketing up double digits is fairly evenly phased, but is there anything unique you'd call out on the operating costs? And, with operating costs growing in line with sales, is this a level of investment that as you exit 2026, allows some future leverage from SG&A? Thank you.
Speaker #9: Hi, good morning. Steve, you called out an increase in both marketing and operating costs through the year. Marketing is up double digits, which is fairly evenly phased, but is there anything unique you'd call out on the operating costs? And with operating costs growing in line with sales, is this a level of investment that, as you exit 2026, allows some future leverage from SG&A?
Speaker #9: Thank you.
Speaker #6: Sure. So I think across the court, I would guide say it's probably going to be pretty even there. There are going to be some and again, I'll go back to things like R&D that will probably build a little bit more in the back half.
Steven Voskuil: Sure. So I think across the quarters, I would guide, say it's probably gonna be pretty even. There are gonna be some, and again, I'll go back to things like R&D that will probably, excuse me, build a little bit more in the back half, and we'll unpack that more when we get to Investor Day too. But I think overall, it should be up across the quarters. With respect to leverage in 2027 and beyond, again, I, I'll go back and say, while we're investing, and some of these investments are multi-year investments to set up, you know, a future of growth, we are also aware of the margin recovery story that we need to continue in 2027. So, you know, we have always two things going on at once.
Steven Voskuil: Sure. So I think across the quarters, I would guide, say it's probably gonna be pretty even. There are gonna be some, and again, I'll go back to things like R&D that will probably, excuse me, build a little bit more in the back half, and we'll unpack that more when we get to Investor Day too. But I think overall, it should be up across the quarters. With respect to leverage in 2027 and beyond, again, I, I'll go back and say, while we're investing, and some of these investments are multi-year investments to set up, you know, a future of growth, we are also aware of the margin recovery story that we need to continue in 2027. So, you know, we have always two things going on at once.
Speaker #6: And we'll unpack that more when we get to investor day too, but I think overall it should be up across the quarters. With respect to leverage in 2027 and beyond, again, I'll go back and say while we're investing in some of these investments, our multi-year investments to set up a future of growth, we are also aware of the margin recovery story that we need to continue in 2027.
Speaker #6: So we have always two things going on at once. We're looking to make smart long-term investments in the business, but at the same time, we want to fuel that investment with productivity and savings.
Steven Voskuil: You know, we're looking to make smart, long-term investments in the business, but at the same time, we want to fuel that investment with productivity and savings. And so we kind of say, hey, we're investing for demand creation, but we want to drive demand fulfillment efficiency as well. And so, yeah, and we're very good at that, and so we're gonna continue to drive supply chain efficiencies. We're gonna drive efficiencies between the lines, like we've done with the transformation work and, and continue to drive there too. So our goal is, over time, we are gonna see leverage across all of those lines.
Steven Voskuil: You know, we're looking to make smart, long-term investments in the business, but at the same time, we want to fuel that investment with productivity and savings. And so we kind of say, hey, we're investing for demand creation, but we want to drive demand fulfillment efficiency as well. And so, yeah, and we're very good at that, and so we're gonna continue to drive supply chain efficiencies. We're gonna drive efficiencies between the lines, like we've done with the transformation work and, and continue to drive there too. So our goal is, over time, we are gonna see leverage across all of those lines.
Speaker #6: And so we kind of say, "Hey, we're investing for demand creation, but we want to drive demand fulfillment efficiency as well." And so we're very good at that.
Speaker #6: And so we're going to continue to drive supply chain efficiencies. We're going to drive efficiencies between the lines like we've done with the transformation work.
Speaker #6: And continue to drive there too. So our goal is over time, we are going to see leverage across all of those
Speaker #6: lines.
Speaker #9: Thank you. Looking forward to seeing you
Alexia Howard: Thank you. Look forward to seeing you in March, and I'll pass it on.
Matt Smith: Thank you. Look forward to seeing you in March, and I'll pass it on.
Speaker #6: you. Thank you.
Steven Voskuil: Thank you.
Steven Voskuil: Thank you.
Operator: Thank you. Our next question comes from the line of Robert Moskow with TD Cowen. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Robert Moskow with TD Cowen. Please proceed with your question.
Speaker #1: Our next question comes from the line of Robert Moscow with TD Cowan. question. Please proceed with your
Robert Moskow: Hi, I had a question about, like, just trying to understand how you forecast all of these macro factors at once. Like, you know, you have the SNAP cuts from a federal level, you have the waivers at the state level, you have the GLPs, and then you have, you know, elasticity from higher pricing. I think you've done a really good job of keeping things pretty conservative on the elasticity assumption, but, the models that your team is working on, Steve, like, can they figure out the cumulative impact of all these things at once? It sounds just like a lot to put into models that probably don't have a lot of historical precedents for that.
Robert Moskow: Hi, I had a question about, like, just trying to understand how you forecast all of these macro factors at once. Like, you know, you have the SNAP cuts from a federal level, you have the waivers at the state level, you have the GLPs, and then you have, you know, elasticity from higher pricing. I think you've done a really good job of keeping things pretty conservative on the elasticity assumption, but, the models that your team is working on, Steve, like, can they figure out the cumulative impact of all these things at once? It sounds just like a lot to put into models that probably don't have a lot of historical precedents for that.
Speaker #11: Hi. I had a question about just trying to understand how you forecast all of these macro factors at once. Like, you have the SNAP cuts from a federal level, you have the waivers, and elasticity from higher pricing.
Speaker #11: And I think you’ve done a really good job of keeping things pretty conservative on the elasticity assumption, but the models that your team is working on, Steve, can they figure out the cumulative impact of all these things at once?
Speaker #11: It sounds just like a lot to put into models that probably don't have a lot of historical precedence for.
Speaker #11: that. Yeah.
Steven Voskuil: ... Yeah, I mean, it is, it's a challenge for sure. You know, in each one, and we've said this before, you know, we've got, we've got a small team on each of these, really trying to dig deep. And in the case, as Kirk said, in the case of SNAP, we have people on the ground working with retailers to understand exactly how this is working out on shelves, what retailers are doing, what we're doing. And so, you know, we're trying to get firsthand information to build into these models. And then at the same time, we do try to run scenarios and to come up with a risk-balanced view across these macros to try to come up with an assumption for the outlook. And, you know, I know we'll be wrong.
Steven Voskuil: ... Yeah, I mean, it is, it's a challenge for sure. You know, in each one, and we've said this before, you know, we've got, we've got a small team on each of these, really trying to dig deep. And in the case, as Kirk said, in the case of SNAP, we have people on the ground working with retailers to understand exactly how this is working out on shelves, what retailers are doing, what we're doing. And so, you know, we're trying to get firsthand information to build into these models. And then at the same time, we do try to run scenarios and to come up with a risk-balanced view across these macros to try to come up with an assumption for the outlook. And, you know, I know we'll be wrong.
Speaker #6: I mean, it's a challenge for sure. In each one, I mean, we've said this before, we've got a small team on each of these, really trying to dig deep.
Speaker #6: And in the case as Kirk said, in the case of snap, we have people on the ground working with retailers to understand exactly how this is working out on shelves, what retailers are doing, what we're doing.
Speaker #6: And so we're trying to get firsthand information to build into these models. And then at the same time, we do try to run scenarios and come up with a risk balanced view across these macros to try to come up with an assumption for the outlook.
Speaker #6: we'll be wrong. I don't And I know we've tried to be prudent and balanced in the way we look for and project the best information that we have.
Steven Voskuil: You know, I don't, you know, we've tried to be prudent and balanced in the way we look for and project these out, but taking the best information that we have. You know, we get smarter. Every month that goes by, we'll have more data. And I expect as some of these programs, or excuse me, some of these things like SNAP, more states get involved, GLP-1's adoption gets easier, you know, we're trying to predict different ways it could play out, and then again, how our portfolio can play offense against some of those challenges.
Steven Voskuil: You know, I don't, you know, we've tried to be prudent and balanced in the way we look for and project these out, but taking the best information that we have. You know, we get smarter. Every month that goes by, we'll have more data. And I expect as some of these programs, or excuse me, some of these things like SNAP, more states get involved, GLP-1's adoption gets easier, you know, we're trying to predict different ways it could play out, and then again, how our portfolio can play offense against some of those challenges.
Speaker #6: We get smarter every month that goes by. We'll have more these out, but taking data. And I expect as some of these programs or excuse me, some of these things like snap, more states get involved.
Speaker #6: GLP1's adoption gets easier. We're trying to predict different ways it could play out. And then again, how our portfolio can play offense against some of those challenges.
Speaker #6: GLP1's adoption gets easier. We're trying to predict different ways it could play out. And then again, how our portfolio can play offense against some of those challenges.
Speaker #11: Okay. And that was kind of my follow-up. You said that you're working with retailers in a couple of states where the waivers are happening.
Robert Moskow: Okay, and, and that was kind of my follow-up. You said that you're working with retailers in a couple of states where the waivers are happening. Like, can you be more specific on what playing offense means? Like, what, what kind of things can you do?
Robert Moskow: Okay, and, and that was kind of my follow-up. You said that you're working with retailers in a couple of states where the waivers are happening. Like, can you be more specific on what playing offense means? Like, what, what kind of things can you do?
Speaker #11: Can you be more specific on what playing offense means? What kind of things can you do?
Speaker #6: Sure. You want me to take that one?
Steven Voskuil: Sure. You want me to take that one, Kirk?
Steven Voskuil: Sure. You want me to take that one, Kirk?
Kirk Tanner: Yeah, I can, I can jump in. I like playing offense, so this is good.
Kirk Tanner: Yeah, I can, I can jump in. I like playing offense, so this is good.
Speaker #11: Yeah, I can jump in. I like playing offense, so this is good.
Steven Voskuil: Exactly.
Steven Voskuil: Exactly.
Speaker #11: Nice. Exactly.
Speaker #6: Yeah. I mean, a lot of it has to do with, yeah, when you work with customers, affordable price, affordability, still remains a really important part.
Kirk Tanner: Yeah, I mean, a lot of it has to do with, yeah, when you work with customers, affordable price. You know, affordability still remains a really important part, and driving other channels, too. So, you know, we have a big convenience business, driving our immediate consumption business, driving availability of those top SKUs, are incredibly important. But I just go back to, how do we drive the insights around the affordable price, price points, unique packages? Those are solutions with our customers. Again, two states out of the 12 states have been implemented. It's early days. We'll continue to, you know, discuss this as we get greater insights, and we'll talk about the tools that we're leveraging to, you know, curtail this headwind.
Kirk Tanner: Yeah, I mean, a lot of it has to do with, yeah, when you work with customers, affordable price. You know, affordability still remains a really important part, and driving other channels, too. So, you know, we have a big convenience business, driving our immediate consumption business, driving availability of those top SKUs, are incredibly important. But I just go back to, how do we drive the insights around the affordable price, price points, unique packages? Those are solutions with our customers. Again, two states out of the 12 states have been implemented. It's early days. We'll continue to, you know, discuss this as we get greater insights, and we'll talk about the tools that we're leveraging to, you know, curtail this headwind.
Speaker #6: And driving other channels too. So we have a big convenience business, driving our immediate consumption business, driving availability of those top SKUs are incredibly important.
Speaker #6: But I just go back to how do we drive the insights around the affordable price points, unique packages, those are solutions with our customers.
Speaker #6: Again, two states out of the 12 states have been implemented. It's early days. We'll continue to discuss this as we get greater insights, and we'll talk about the tools that we're leveraging to curtail this
Speaker #6: headwind. Very good.
Robert Moskow: Very good. Thank you.
Robert Moskow: Very good. Thank you.
Speaker #11: Thank
Speaker #1: Thank you. Our next question comes from the line of
Operator: Thank you. Our next question comes from the line of Scott Marks with Jefferies. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Scott Marks with Jefferies. Please proceed with your question.
Speaker #1: Scott Marks with Jefferies. Please proceed with your question.
Scott Marks: Hey, good morning. Thanks so much for taking our questions.
Scott Marks: Hey, good morning. Thanks so much for taking our questions.
Speaker #9: for taking the you. Hey, good morning. Thanks so much questions. Two questions from me. The first previously you had said that you were one is on cocoa.
Steven Voskuil: Good morning.
Steven Voskuil: Good morning.
Scott Marks: Two questions from me. The first one is on cocoa. I think previously you had said that you were hedged for 26 above the rates you had locked in for 25, but that you also had some flexible hedging structures. So given the comments today around stable commodity basket, should we assume that means that your cocoa cost in 26 is actually in line with that of 25? Thanks.
Scott Marks: Two questions from me. The first one is on cocoa. I think previously you had said that you were hedged for 26 above the rates you had locked in for 25, but that you also had some flexible hedging structures. So given the comments today around stable commodity basket, should we assume that means that your cocoa cost in 26 is actually in line with that of 25? Thanks.
Speaker #9: You hedged for 2026 above the rates you had locked in for 2025, but you also had some flexible hedging structures. So, given the comments today around a stable commodity basket, should we assume that means your cocoa cost in 2026 is actually in line with that of 2025?
Speaker #9: Thanks.
Steven Voskuil: So, cocoa is up just a little versus 2025. And when we said before, it's hedged above current market levels, so it's not hedged materially above 2025, just hedged above our cocoa's trading right now. Just like we did last year, you know, we've got a variety of hedging structures, and some of those structures allow us to participate in downside. So even in 2026, we have a little opportunity. It's not like it was last year to participate in downside, but there's still a little bit there that if cocoa continues to decline, we'll have some potential. And then, of course, as we look to 2027, you know, placing hedges today would mean that we'd have deflation between 2027 and 2026.
Steven Voskuil: So, cocoa is up just a little versus 2025. And when we said before, it's hedged above current market levels, so it's not hedged materially above 2025, just hedged above our cocoa's trading right now. Just like we did last year, you know, we've got a variety of hedging structures, and some of those structures allow us to participate in downside. So even in 2026, we have a little opportunity. It's not like it was last year to participate in downside, but there's still a little bit there that if cocoa continues to decline, we'll have some potential. And then, of course, as we look to 2027, you know, placing hedges today would mean that we'd have deflation between 2027 and 2026.
Speaker #6: So yeah. So cocoa is up just a little versus 2025. And when we said before, it's hedged above current market levels. So it's not hedged materially above 2025, just hedged above our cocoa's trading right now.
Speaker #6: When we just like we did last year, we've got a variety of hedging structures. And some of those structures allow us to participate in downside.
Speaker #6: So even in 2026, we have a little opportunity. It's not like it was last year to participate in downside. But there's still a little bit there that if cocoa continues to decline, we'll have some potential.
Speaker #6: And then, of course, as we look to 2027, placing hedges today would mean that we'd have deflation between 2027 and 2026. So we're watching that space.
Steven Voskuil: So we're watching that space, and again, we've got a very structured hedging policy to take advantage of that.
Steven Voskuil: So we're watching that space, and again, we've got a very structured hedging policy to take advantage of that.
Speaker #6: And again, we've got a very structured hedging policy to take advantage of that.
Scott Marks: Understood. Thanks for that. And then second question: you know, today there's obviously a lot of, lot of discussion around focusing with innovation and media behind some of the largest brands. And I think over the past maybe year, year and a half, there was maybe a little more emphasis on supporting some of the smaller brands within the chocolate portfolio as well. So wondering if you can just kind of share how you're thinking about some of those tail brands and how we should be thinking about investment in those going forward. Thanks.
Scott Marks: Understood. Thanks for that. And then second question: you know, today there's obviously a lot of, lot of discussion around focusing with innovation and media behind some of the largest brands. And I think over the past maybe year, year and a half, there was maybe a little more emphasis on supporting some of the smaller brands within the chocolate portfolio as well. So wondering if you can just kind of share how you're thinking about some of those tail brands and how we should be thinking about investment in those going forward. Thanks.
Speaker #9: Understood. Thanks for that. And then second question, today there's obviously a lot of discussion around focusing with innovation and media behind some of the largest brands.
Speaker #9: And I think over the past maybe year, year and a half, there was maybe a little more emphasis on supporting some of the smaller brands within the chocolate portfolio as well.
Speaker #9: So wondering if you can just kind of share how you're thinking about some of those tail brands and how we should be thinking about investment in those going forward.
Speaker #9: Thanks.
Speaker #6: Yeah. This is really about world-class portfolio management. And we announced, obviously, Hershey's and Reese's big investment across those. That gives us a lot of momentum in the business.
Kirk Tanner: Yeah, this is really about, you know, world-class portfolio management. And we announced, obviously, Hershey's and Reese's big investment across those. That gives us a lot of momentum in the business, and it drives a lot of growth. We do have a beautiful portfolio across our confection and salty brands, and there are other tools that we're leveraging to grow those brands. So we are paying attention to the entire portfolio, and we're clear about each brand and the role it plays in our portfolio, so that we can get to the consumers in a more targeted way. So it is a balance of both. It's not a trade-off between our large brands and our smaller brands that have lots of potential. We're investing across our portfolio, but it's very deliberate about the opportunity each brand and the role it plays in our portfolio.
Kirk Tanner: Yeah, this is really about, you know, world-class portfolio management. And we announced, obviously, Hershey's and Reese's big investment across those. That gives us a lot of momentum in the business, and it drives a lot of growth. We do have a beautiful portfolio across our confection and salty brands, and there are other tools that we're leveraging to grow those brands. So we are paying attention to the entire portfolio, and we're clear about each brand and the role it plays in our portfolio, so that we can get to the consumers in a more targeted way. So it is a balance of both. It's not a trade-off between our large brands and our smaller brands that have lots of potential. We're investing across our portfolio, but it's very deliberate about the opportunity each brand and the role it plays in our portfolio.
Speaker #6: And it drives a lot of growth. We do have a beautiful portfolio across our confection and salty brands. And there are other tools that we're leveraging to grow those brands.
Speaker #6: So we are paying attention to the entire portfolio, and we're clear about each brand and the role it plays in our portfolio so that we can get to the consumers in a more targeted way.
Speaker #6: So it is a balance of both. It's not a trade-off between our large brands and our smaller brands that have lots of potential. We're investing across our portfolio, but it's very deliberate about the opportunity each brand and the role it plays in our portfolio.
Steven Voskuil: Yeah. We'd like some of those small brands to become the next billion-dollar brands. And, leveraging, we're gonna continue to leverage non-working media to support new brands and occasions as well.
Steven Voskuil: Yeah. We'd like some of those small brands to become the next billion-dollar brands. And, leveraging, we're gonna continue to leverage non-working media to support new brands and occasions as well.
Speaker #6: Yeah. We'd billion-dollar brands. And leveraging, we're going to continue to leverage non-working media to support new brands and like some of those small brands to become the next occasions as
Scott Marks: Thanks very much. We'll pass it on.
Scott Marks: Thanks very much. We'll pass it on.
Speaker #9: very much. Thanks We'll pass it
Speaker #9: on. Thank you.
Operator: Thank you. Our next question comes from the line of Chris Carey with Wells Fargo Securities. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Chris Carey with Wells Fargo Securities. Please proceed with your question.
Speaker #1: Our next question comes from the line of Chris Kerry with Wells Fargo Securities. Please proceed with your question.
Speaker #9: Hi, good morning, everyone. question. wanted to ask one follow-up on cocoa. Just as you think 2027, how aggressive can you be about hedging the current drop?
Speaker #9: Hi, good morning, everyone. Question. Wanted to ask one follow-up on cocoa. Just as you think about 2027, how aggressive can you be about hedging? And if I heard it correctly, did I hear that you don't need to take pricing in 2027?
Chris Carey: Hi, good morning, everyone. I just wanted to ask one follow-up on cocoa. Just as you think about 2027, how aggressive can you be about hedging the current drop? And if I heard it correctly, did I hear that you don't need to take pricing in 2027, that's how you're viewing current levels right now? And then I have a follow-up. Thanks.
Chris Carey: Hi, good morning, everyone. I just wanted to ask one follow-up on cocoa. Just as you think about 2027, how aggressive can you be about hedging the current drop? And if I heard it correctly, did I hear that you don't need to take pricing in 2027, that's how you're viewing current levels right now? And then I have a follow-up. Thanks.
Speaker #9: That's how you're viewing current levels right now? And then I have a follow-up. Thanks.
Speaker #6: So there's a couple of things in there. We're not going to get specific about 2027 hedging. But we will be very thoughtful. We have a program that gives us some structure in how we attack that.
Steven Voskuil: ... So there's a couple things in there. We're not gonna get specific about 2027 hedging, but we, you know, we will be very thoughtful. Our we have a program that gives us some structure in how we attack that. But that's probably all we're gonna share relative to that. Relative to pricing, I think, you know, where cocoa is trading today, looking ahead to 2027, it probably takes some pressure off pricing in the near term. You know, we've taken price, we're gonna execute and activate against that. You know, in a broader sense, you know, pricing is part of a long-term strategy, but it's, it's only one part. You know, we have mix and innovation and, you know, other ways to drive value, price pack architecture.
Steven Voskuil: ... So there's a couple things in there. We're not gonna get specific about 2027 hedging, but we, you know, we will be very thoughtful. Our we have a program that gives us some structure in how we attack that. But that's probably all we're gonna share relative to that. Relative to pricing, I think, you know, where cocoa is trading today, looking ahead to 2027, it probably takes some pressure off pricing in the near term. You know, we've taken price, we're gonna execute and activate against that. You know, in a broader sense, you know, pricing is part of a long-term strategy, but it's, it's only one part. You know, we have mix and innovation and, you know, other ways to drive value, price pack architecture.
Speaker #6: But that's probably all we're going to share relative to that. Relative to pricing, I think where cocoa is trading today, looking ahead to 2027, it probably takes some pressure off pricing in the near term.
Speaker #6: We've taken price. We're going to execute and activate against that. In a broader sense, pricing is part of a long-term strategy, but it's only one part.
Speaker #6: We have mix and innovation and other ways to drive value price pack architecture. And so in the long term, we look at all those things through the mix.
Steven Voskuil: And so in the long term, you know, we look at all those things through the mix. It's just we happen to be in a case more recently because of cocoa to have to rely more on price.
Steven Voskuil: And so in the long term, you know, we look at all those things through the mix. It's just we happen to be in a case more recently because of cocoa to have to rely more on price.
Speaker #6: recently because of It's just we happen to be in a case more cocoa. But to have to rely more on price.
[Analyst] (Rothschild and Company, Redburn): Okay, great. And then one quick follow-up would just be: when you think about volume, obviously margins are recovering nicely. Do you have a view on where you want volumes to be as we look out over the next 18 months? And when you think volumes can get back to kind of flatish to positive? Thanks.
Chris Carey: Okay, great. And then one quick follow-up would just be: when you think about volume, obviously margins are recovering nicely. Do you have a view on where you want volumes to be as we look out over the next 18 months? And when you think volumes can get back to kind of flatish to positive? Thanks.
Speaker #9: And then one quick follow-up would just be, when you think about volume, obviously, Okay. Great. nicely. Do you have a view on where you want volumes to be as we look out over the next 18 months?
Speaker #9: And when do you think volumes can get back to, kind of, flash to positive?
Speaker #9: Thanks.
Steven Voskuil: Mm-hmm. Yeah, I think Kirk kind of touched on this earlier. You know, as we get, we're gonna be digesting the price increase in 2026, activating against it. As we get further out and we look to, you know, 2027 and beyond, you know, our goal is to get back to a more balanced mix of price and volume. And we know we've got parts in the portfolio that, even with some of the macro headwinds, are set up for volume growth, you know, sweets, better for you, premiums, the functional products. And that's not to say we can't get volume in the core, just to say that even as you look at the macros, there are places where our portfolio can play stronger from a volume standpoint.
Steven Voskuil: Mm-hmm. Yeah, I think Kirk kind of touched on this earlier. You know, as we get, we're gonna be digesting the price increase in 2026, activating against it. As we get further out and we look to, you know, 2027 and beyond, you know, our goal is to get back to a more balanced mix of price and volume. And we know we've got parts in the portfolio that, even with some of the macro headwinds, are set up for volume growth, you know, sweets, better for you, premiums, the functional products. And that's not to say we can't get volume in the core, just to say that even as you look at the macros, there are places where our portfolio can play stronger from a volume standpoint.
Speaker #6: Yeah. I think Kirk
Speaker #6: Kind of touched on this earlier. As we get, we're going to be digesting the pricing increase in 2026, activating against it. As we get further out and we look to 2027 and beyond, our goal is to get back to a more balanced mix of price and volume.
Speaker #6: And we know we’ve got parts in the portfolio that, even with some of the macro headwinds, are set up—better-for-you, premiums, the functional—for volume growth.
Speaker #6: Sweets, products, and that's not to say we can't get volume in the core—just to say that even as you look at the macros, there are places where our portfolio can play stronger from a volume standpoint.
Speaker #6: So again, this is something we'll also unpack more when we're together in March as we look out past 2026. But recovering volume, we've got equipment ready to go to make more candy.
Steven Voskuil: So again, this is something we'll also unpack more when we're together in March as we look out past 2026. But, you know, recovering volume, you know, we've got equipment ready to go to make more candy, and so we're anxious to be able to deploy it against volume.
Steven Voskuil: So again, this is something we'll also unpack more when we're together in March as we look out past 2026. But, you know, recovering volume, you know, we've got equipment ready to go to make more candy, and so we're anxious to be able to deploy it against volume.
Speaker #6: And so we're anxious to be able to deploy it against volume.
Speaker #3: Yeah. Let me just add just a couple of things. Yeah. Volume unit growth occasion growth is really important to got plans of course in us.
Kirk Tanner: Yeah, let me just add just a couple things. Yeah, volume unit growth, occasion growth is really important to us, and we'll build on that. That we've got plans, of course, in 2027 and 2028 that we'll share. But it really is coming down to, you know, delivering that consumer occasion and driving growth in that, and we'll do that in a variety of ways, but that is a really important lever for us.
Kirk Tanner: Yeah, let me just add just a couple things. Yeah, volume unit growth, occasion growth is really important to us, and we'll build on that. That we've got plans, of course, in 2027 and 2028 that we'll share. But it really is coming down to, you know, delivering that consumer occasion and driving growth in that, and we'll do that in a variety of ways, but that is a really important lever for us.
Speaker #3: And we'll build on that. And we've 2027 and 2028 that we'll share. But it really is coming down to delivering that consumer occasion and driving growth in that.
Speaker #3: And we'll do that in a variety of ways. But that is a really important lever for us.
Speaker #1: Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question.
Speaker #1: Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your
Operator: Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question.
Speaker #1: question.
John Baumgartner: Good morning. Thanks for the question.
John Baumgartner: Good morning. Thanks for the question.
Speaker #9: morning. Good morning.
Kirk Tanner: Good morning.
Kirk Tanner: Good morning.
Speaker #10: There was a comment this morning about investing in Good morning. Thanks for your protein portfolio. And it's been six years since the acquisition of One Bar.
John Baumgartner: Good morning. There was a comment this morning about investing in your protein portfolio. It's been six years since the acquisition of ONE bar, so I imagine Hershey's gained some decent understanding of the category by now. How do you think about participating in protein as a theme? I mean, to what extent do you view protein as sort of an edge to retain consumers gravitating to healthier snacks? I guess especially since we've seen numerous cases already of snacking flavors, you know, applied successfully in the protein space.
John Baumgartner: Good morning. There was a comment this morning about investing in your protein portfolio. It's been six years since the acquisition of ONE bar, so I imagine Hershey's gained some decent understanding of the category by now. How do you think about participating in protein as a theme? I mean, to what extent do you view protein as sort of an edge to retain consumers gravitating to healthier snacks? I guess especially since we've seen numerous cases already of snacking flavors, you know, applied successfully in the protein space.
Speaker #10: So I imagine Hershey's gained some decent understanding of the category by now. How do you think about participating in protein as a theme? I mean, to what extent do you view protein as sort of a hedge to retain consumers' gravitate into healthier snacks?
Speaker #10: And I guess especially since we've seen numerous cases already of snacking flavors applied successfully in the protein
Speaker #10: space. Yeah.
Kirk Tanner: Yeah, I think that's really a good question, really relevant to what we're talking about. Investing in our protein business, we have a really strong outlook for our protein business this year. We've invested in a lot of R&D around protein and fiber and things that our consumers are looking for. I look at the total snacking universe, and functional snacking is a reality, and we have to participate in that space, and we are. And we really like what we're building with ONE and FULFIL, and we'll continue to add resources against that and see the growth coming through. Yeah, that is an area that we'll focus and build on for the future.
Kirk Tanner: Yeah, I think that's really a good question, really relevant to what we're talking about. Investing in our protein business, we have a really strong outlook for our protein business this year. We've invested in a lot of R&D around protein and fiber and things that our consumers are looking for. I look at the total snacking universe, and functional snacking is a reality, and we have to participate in that space, and we are. And we really like what we're building with ONE and FULFIL, and we'll continue to add resources against that and see the growth coming through. Yeah, that is an area that we'll focus and build on for the future.
Speaker #3: I think that's really a good question, really relevant for what we're talking about. Investing in our protein business, we have a really strong outlook for our protein business this year.
Speaker #3: We've invested in a lot of R&D around protein and fiber and things that are consumers are looking for. I look at the total snacking universe and functional snacking is a reality.
Speaker #3: And we have to participate in that space. And we are. And we really like what we're building with One and Fulfill. And we'll continue to add resources against that and see the growth coming through.
Speaker #3: Yeah, that is an area that we'll focus on and build on for the—
Speaker #3: future. And then maybe to follow up,
John Baumgartner: And then maybe to follow up on that, Kirk, just, you know, considering how Hershey built a salty snacks portfolio through M&A, I guess, what's the feasibility or interest level to use balance sheet to expand similarly in protein? I mean, does your interest level rise to build a portfolio of brands and subcategories, or should we just think about future protein efforts really just anchored more to the ONE bar brand?
John Baumgartner: And then maybe to follow up on that, Kirk, just, you know, considering how Hershey built a salty snacks portfolio through M&A, I guess, what's the feasibility or interest level to use balance sheet to expand similarly in protein? I mean, does your interest level rise to build a portfolio of brands and subcategories, or should we just think about future protein efforts really just anchored more to the ONE bar brand?
Speaker #10: How Hershey built a salty snacks on that, Kirk, just considering portfolio through M&A, I guess, what's the balance sheet to expand similarly in protein?
Speaker #10: I mean, does your interest level rise to build a portfolio of brands and subcategories, or should we just think about future protein efforts really just brand?
Speaker #10: anchored more to the One Bar
Kirk Tanner: Yeah, it's a, it's a big white space, and there's so much traction from consumers. I think you have to really be open to two, I mean, both, right? Growing organically, we see lots of potential for the brands that we have, but we're also open for those opportunities that build our portfolio. So I would say we're open for that approach. But, you know, the first thing, the things that we can control right now are let's grow these businesses, let's innovate in these spaces, let's get thriving brands, and then we'll be open for opportunities in the future.
Kirk Tanner: Yeah, it's a, it's a big white space, and there's so much traction from consumers. I think you have to really be open to two, I mean, both, right? Growing organically, we see lots of potential for the brands that we have, but we're also open for those opportunities that build our portfolio. So I would say we're open for that approach. But, you know, the first thing, the things that we can control right now are let's grow these businesses, let's innovate in these spaces, let's get thriving brands, and then we'll be open for opportunities in the future.
Speaker #3: It's a big white space, and there's so much traction from consumers. I think you have to really be open to two—I mean, both, right?
Speaker #3: Growing organically, we see lots of potential for the brands that we have. But we're also open for those opportunities that build our portfolio. So I would say we're open for that approach.
Speaker #3: But the first thing—the things that we can control right now—are, let's grow these businesses. Let's innovate in these spaces. Let's get thriving brands.
Speaker #3: And then we'll be open for future.
Speaker #10: Good. Thank
Speaker #10: you.
John Baumgartner: Good. Thank you.
John Baumgartner: Good. Thank you.
Speaker #1: Thank you. Our next question comes from the line of Banking Zhu with Rothschild and Company Redburn. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Bingqing Zhu with, sorry, Rothschild and Company, Redburn. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Bingqing Zhu with, sorry, Rothschild and Company, Redburn. Please proceed with your question.
Speaker #11: Hi. Good morning. Thanks for taking my is trying to follow up on the volume question. Because your 2026 opportunities in the guidance, 2.5, 3.5 organic cells, and 10% pricing, that embedded a quite meaningful volume mix decline.
[Analyst] (Rothschild and Company, Redburn): Hi, good morning. Thanks for taking my question. My first one is trying to follow up on the volume question. Because your 2026 guidance, 2.5, 3.5 organic sales and 10% pricing, that embedded is quite meaningful volume mix decline. I appreciate that's still early in the year and the elasticity is favorable so far, but how much volume decline are you comfortable absorbing before you would reconsider pricing and maybe lean more towards, promotion and price adjustment to support the volume? And then I'll have a follow-up, please. Thank you.
Bingqing Zhu: Hi, good morning. Thanks for taking my question. My first one is trying to follow up on the volume question. Because your 2026 guidance, 2.5, 3.5 organic sales and 10% pricing, that embedded is quite meaningful volume mix decline. I appreciate that's still early in the year and the elasticity is favorable so far, but how much volume decline are you comfortable absorbing before you would reconsider pricing and maybe lean more towards, promotion and price adjustment to support the volume? And then I'll have a follow-up, please. Thank you.
Speaker #11: I appreciate that it's still early in the year and the elasticity is favorable so far. But how much volume decline are you comfortable absorbing before you would reconsider pricing and maybe lean more to support the volume?
Speaker #11: So then I'll have a follow-up, please. Thank you.
Speaker #6: Sure. I mean, the is embedded in the guide. And volume impact of the pricing that we have taken so we accept that. We don't like it.
Steven Voskuil: Sure. I mean, the volume impact of the pricing that we have taken is embedded in the guide. And so, you know, we, we accept that. We don't like it. We want, as we said several times, you know, we want more volume growth. When we're together in March, we're gonna talk more about that. But the volume impact of elasticity that we have inside the plan has been factored in. Between marketing dollars, promotion dollars, investments, you know, we believe we have the agility inside the plan to be able to deploy to protect sensitive areas and respond if we see a concern. You know, as we sit here today, as Kirk said, the market's been rational.
Steven Voskuil: Sure. I mean, the volume impact of the pricing that we have taken is embedded in the guide. And so, you know, we, we accept that. We don't like it. We want, as we said several times, you know, we want more volume growth. When we're together in March, we're gonna talk more about that. But the volume impact of elasticity that we have inside the plan has been factored in. Between marketing dollars, promotion dollars, investments, you know, we believe we have the agility inside the plan to be able to deploy to protect sensitive areas and respond if we see a concern. You know, as we sit here today, as Kirk said, the market's been rational.
Speaker #6: We want, as we said several times, we want more volume growth when we're together in March. We're going to talk more about that. But the
Speaker #6: volume impact of elasticity that we have inside the plan has been factored in. In our plan, between marketing dollars, towards promotion and price adjustment to the agility inside the sensitive areas and respond if we see a concern.
Speaker #6: As we sit here today, as Kirk said, the market's been rational. The competitive environment is stable. So we don't have any particular pockets planned to be able to deploy to protect or of concern.
Steven Voskuil: You know, our kind of competitive environment is stable, so we don't have any particular pockets of concern. Elasticities are as expected, and so if not a little better, and so but we're ready inside the plan to respond if we need to.
Steven Voskuil: You know, our kind of competitive environment is stable, so we don't have any particular pockets of concern. Elasticities are as expected, and so if not a little better, and so but we're ready inside the plan to respond if we need to.
Speaker #6: Elasticity is as expected, and if not, a little better. And so, we're ready inside the plan to respond if we need to.
Speaker #11: Okay. you. Then I have a follow-up on the Thank pricing. So in the prepared remarks, you mentioned pricing to the 10% in 2026. If I recall correctly, I think a few quarters back in Q2 when you announced the price increase, you expect to be mid-teens in 2026.
[Analyst] (Rothschild and Company, Redburn): Okay, thank you. Then I have a follow-on on pricing. So, in prepared remarks, you mentioned pricing to be 10% in 2026. If I recall correctly, I think a few quarters back in Q2, when you announced the price increase, you expect to be mid-teens in 2026. So that's a bit lower than what you previously guided. Can you provide more color on that, please? Does that mean you maybe rolled back some pricing you originally planned, or what does that mean? Thank you.
Bingqing Zhu: Okay, thank you. Then I have a follow-on on pricing. So, in prepared remarks, you mentioned pricing to be 10% in 2026. If I recall correctly, I think a few quarters back in Q2, when you announced the price increase, you expect to be mid-teens in 2026. So that's a bit lower than what you previously guided. Can you provide more color on that, please? Does that mean you maybe rolled back some pricing you originally planned, or what does that mean? Thank you.
Speaker #11: So that's a bit lower than what you previously guided. Can you provide more color on that, please? Does that mean you maybe roll back some pricing in the origin plans or what does that mean?
Speaker #11: Thank
Steven Voskuil: Yeah, we haven't rolled back any pricing. It may be just a misunderstanding of, you know, if we're talking by segment or we're talking overall company pricing increase, that might be where the misunderstanding is. But, we've realized that the pricing that we had announced earlier in 2025, as we said earlier, the more recently announced pricing is already in the market. So, from a pricing standpoint, everything is on track, nothing's been rolled back and, you know, we're all in execution mode.
Steven Voskuil: Yeah, we haven't rolled back any pricing. It may be just a misunderstanding of, you know, if we're talking by segment or we're talking overall company pricing increase, that might be where the misunderstanding is. But, we've realized that the pricing that we had announced earlier in 2025, as we said earlier, the more recently announced pricing is already in the market. So, from a pricing standpoint, everything is on track, nothing's been rolled back and, you know, we're all in execution mode.
Speaker #6: any pricing maybe just a
Speaker #6: segment or we're talking overall company Yeah. We haven't rolled back pricing increase, that might be where the misunderstanding is. But we've realized the pricing that we had announced earlier in 2025 as we said earlier, the more recently announced pricing track and the things have been rolled is already in the market.
Speaker #6: back. And we're all in execution So
Speaker #6: mode.
Speaker #11: Awesome. Thank
[Analyst] (Rothschild and Company, Redburn): Thank you.
Bingqing Zhu: Thank you.
Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to management for any final comments.
Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to management for any final comments.
Speaker #1: session. I'll turn the floor back to management for any final comments.
Speaker #2: you all for your questions. And we look forward to you. Thank weeks. catching up with you over the coming days and
Anoori Naughton: Thank you all for your questions, and we look forward to catching up with you over the coming days and weeks.
Anoori Naughton: Thank you all for your questions, and we look forward to catching up with you over the coming days and weeks.
Steven Voskuil: Yeah. Thank you very much.
Kirk Tanner: Yeah. Thank you very much.
Speaker #3: much.
Speaker #1: Thank you. This concludes today's conference. You may disconnect your from a pricing standpoint, everything is on lines at this time. Thank you for your participation.
Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
