Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Hershey Co., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net sales	10,419,294)	8,971,337)	8,149,719)	7,986,252)	7,791,069)
Cost of sales	(5,920,509)	(4,922,739)	(4,448,450)	(4,363,774)	(4,215,744)
Gross profit	4,498,785)	4,048,598)	3,701,269)	3,622,478)	3,575,325)
Selling, marketing and administrative expense	(2,236,009)	(2,001,351)	(1,890,925)	(1,905,929)	(1,874,829)
Long-lived asset impairment charges	—)	—)	(9,143)	(112,485)	(57,729)
Business realignment costs	(1,989)	(3,525)	(18,503)	(8,112)	(19,103)
Operating profit	2,260,787)	2,043,722)	1,782,698)	1,595,952)	1,623,664)
Interest expense	(140,095)	(129,846)	(153,471)	(152,122)	(146,858)
Interest income	2,538)	2,429)	4,097)	7,997)	8,021)
Interest expense, net	(137,557)	(127,417)	(149,374)	(144,125)	(138,837)
Write-down of equity investments in partnerships qualifying for historic and renewable energy tax credits	(188,286)	(113,756)	(125,579)	(50,457)	(50,329)
Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans	(18,466)	(5,177)	(12,560)	(20,415)	(20,672)
Other income (expense), net	593)	(148)	(188)	(171)	(3,765)
Other income (expense), net	(206,159)	(119,081)	(138,327)	(71,043)	(74,766)
Income before income taxes	1,917,071)	1,797,224)	1,494,997)	1,380,784)	1,410,061)
Provision for income taxes	(272,254)	(314,405)	(219,584)	(234,032)	(239,010)
Net income including noncontrolling interest	1,644,817)	1,482,819)	1,275,413)	1,146,752)	1,171,051)
Net (gain) loss attributable to noncontrolling interest	—)	(5,307)	3,295)	2,940)	6,511)
Net income attributable to The Hershey Company	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial data reveals several noteworthy trends over the five-year period ending December 31, 2022. Net sales displayed consistent growth from approximately US$7.79 billion in 2018 to over US$10.42 billion in 2022, indicating a robust expansion in revenue generation. Correspondingly, the cost of sales also increased steadily, rising from about US$4.22 billion to nearly US$5.92 billion over the same timeframe. Despite rising costs, gross profit experienced a favorable upward trajectory, growing from roughly US$3.58 billion in 2018 to approximately US$4.50 billion in 2022, reflecting effective management of production and operational efficiencies.

Operating expenses, represented by selling, marketing, and administrative expenses, showed a moderate increase from around US$1.87 billion in 2018 to about US$2.24 billion in 2022. This indicates a controlled rise in overhead costs relative to sales growth. Additionally, long-lived asset impairment charges were significant in 2018 and 2019 but diminished substantially by 2020 and were absent in the last two years, suggesting reduced write-downs on fixed assets or improved asset management. Business realignment costs peaked slightly in 2020 but generally declined, indicating efforts to streamline operations.

The operating profit reflected a positive trend, growing from approximately US$1.62 billion in 2018 to about US$2.26 billion in 2022. Interest expense showed minor fluctuations, remaining close to the US$130 million to US$150 million range annually, while interest income decreased overall, resulting in a net interest expense that modestly declined by 2021 but rose slightly again in 2022. The write-down of equity investments pertaining to specific tax credit partnerships displayed volatility and an increasing trend, culminating in a substantial charge in 2022, which may impact overall earnings quality.

Net periodic benefit cost components related to pension and other post-retirement plans generally reduced from 2018 to 2021 but saw a rise again in 2022, indicating fluctuating benefit plan-related expenses. Other net income (expense) items were mostly negative, with a notable increase in expense magnitude in 2022, potentially affecting profitability.

Income before income taxes increased steadily, from approximately US$1.41 billion in 2018 to around US$1.92 billion in 2022, showing overall profitability improvement. The provision for income taxes, however, did not consistently follow this upward trend, showing fluctuations that might reflect changes in tax rates or taxable income composition. Net income attributable to the company rose consistently, moving from roughly US$1.18 billion in 2018 to about US$1.64 billion in 2022, underscoring sustained earnings growth over the period.

Summary of Key Trends: Steady revenue and gross profit growth indicate improving core business performance.; Operating expenses increased but at a controlled pace relative to sales growth.; Asset impairments and realignment costs declined over time, suggesting stabilization in asset management and operational adjustments.; Operating profit improved consistently, supported by revenue growth and expense control.; Net interest expense remained relatively stable, with slight variations in interest income.; Increasing write-downs on equity investments related to tax credit partnerships may warrant attention due to their impact on net income.; Fluctuations in pension and post-retirement benefit costs and other expenses introduced some volatility in net income components.; Tax provision levels varied, not fully aligning with income before taxes, possibly indicating evolving tax strategies or changes in tax legislation.; Overall, net income showed consistent improvement, reflecting effective management and profitability enhancement over the period analyzed.

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Hershey Co. (NYSE:HSY)

Income Statement