Name: Hershey Co. (NYSE:HSY) | Income Statement
Creator: Stock Analysis on Net

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.

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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 performance from 2018 to 2022 is characterized by consistent top-line growth and an overall increase in profitability, despite mounting pressures on the cost of goods sold.

Revenue and Gross Profitability: Net sales exhibited a continuous upward trajectory, increasing from US$ 7.79 billion in 2018 to US$ 10.42 billion in 2022. While gross profit followed this growth pattern, rising from US$ 3.58 billion to US$ 4.50 billion, the rate of increase in the cost of sales accelerated more rapidly than revenue growth in the final two years. This resulted in a contraction of the gross profit margin, which declined from approximately 45.9% in 2018 to 43.2% in 2022, indicating higher input costs or pricing pressures.
Operating Performance and Efficiency: Operating profit grew from US$ 1.62 billion in 2018 to US$ 2.26 billion in 2022. This growth was supported by disciplined management of selling, marketing, and administrative expenses, which grew at a slower pace than net sales. Furthermore, a significant reduction in long-lived asset impairment charges and business realignment costs after 2020 contributed to the stabilization and expansion of operating margins, which rose from 20.8% in 2018 to 21.7% in 2022.
Non-Operating Expenses and Financial Costs: Interest expenses remained relatively stable, fluctuating between US$ 127 million and US$ 153 million over the five-year period. However, there is a notable increase in write-downs of equity investments in partnerships qualifying for historic and renewable energy tax credits, which rose from US$ 50.3 million in 2018 to US$ 188.3 million in 2022. These write-downs acted as a recurring drag on income before taxes.
Net Income Trends: Net income attributable to the company demonstrated steady growth, rising from US$ 1.18 billion in 2018 to US$ 1.64 billion in 2022. This growth reflects the company's ability to translate increased sales volume and operating efficiency into bottom-line results, effectively offsetting the combined impact of margin compression and increased non-operating write-downs.

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