Operating Profit Margin
since 2005
Calculation
Hershey Co., operating profit margin, long-term trends, calculation
| Operating profit margin | = | 100 | × | Operating profit1 | ÷ | Net sales1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 21.70% | = | 100 | × | 2,260,787) | ÷ | 10,419,294) |
| Dec 31, 2021 | 22.78% | = | 100 | × | 2,043,722) | ÷ | 8,971,337) |
| Dec 31, 2020 | 21.87% | = | 100 | × | 1,782,698) | ÷ | 8,149,719) |
| Dec 31, 2019 | 19.98% | = | 100 | × | 1,595,952) | ÷ | 7,986,252) |
| Dec 31, 2018 | 20.84% | = | 100 | × | 1,623,664) | ÷ | 7,791,069) |
| Dec 31, 2017 | 16.96% | = | 100 | × | 1,274,641) | ÷ | 7,515,426) |
| Dec 31, 2016 | 16.21% | = | 100 | × | 1,205,783) | ÷ | 7,440,181) |
| Dec 31, 2015 | 14.05% | = | 100 | × | 1,037,759) | ÷ | 7,386,626) |
| Dec 31, 2014 | 18.72% | = | 100 | × | 1,389,575) | ÷ | 7,421,768) |
| Dec 31, 2013 | 18.75% | = | 100 | × | 1,339,675) | ÷ | 7,146,079) |
| Dec 31, 2012 | 16.72% | = | 100 | × | 1,111,148) | ÷ | 6,644,252) |
| Dec 31, 2011 | 17.35% | = | 100 | × | 1,055,028) | ÷ | 6,080,788) |
| Dec 31, 2010 | 15.96% | = | 100 | × | 905,298) | ÷ | 5,671,009) |
| Dec 31, 2009 | 14.37% | = | 100 | × | 761,590) | ÷ | 5,298,668) |
| Dec 31, 2008 | 11.49% | = | 100 | × | 589,898) | ÷ | 5,132,768) |
| Dec 31, 2007 | 9.28% | = | 100 | × | 458,827) | ÷ | 4,946,716) |
| Dec 31, 2006 | 20.08% | = | 100 | × | 992,558) | ÷ | 4,944,230) |
| Dec 31, 2005 | 17.80% | = | 100 | × | 860,911) | ÷ | 4,835,974) |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in thousands
The analysis of operating performance from 2005 to 2022 reveals a long-term trajectory of growth in both absolute profitability and margin efficiency, despite specific periods of significant volatility.
- Revenue and Absolute Profit Growth
- Net sales exhibited consistent upward momentum over the 17-year period, increasing from 4.84 billion USD in 2005 to 10.42 billion USD by 2022. Operating profit followed a similar growth pattern, rising from 860.91 million USD to 2.26 billion USD, indicating a substantial expansion in the scale of operations.
- Analysis of Margin Fluctuations
- The operating profit margin experienced a severe contraction in 2007, dropping to 9.28% from a high of 20.08% in 2006. This represents the lowest efficiency point in the recorded period. A recovery phase ensued between 2008 and 2014, during which the margin gradually climbed back to a range of 17% to 18.75%. A subsequent secondary dip occurred in 2015, where the margin retreated to 14.05%.
- Modern Expansion and Peak Efficiency
- A sustained trend of margin expansion is observed from 2016 through 2021. During this interval, the operating profit margin rose from 16.21% to a peak of 22.78%. This period reflects the highest levels of operational efficiency in the dataset, suggesting improved cost management or pricing power. A slight correction to 21.70% occurred in 2022, yet the margin remains significantly above the historical averages observed between 2007 and 2015.
- Correlation Between Sales and Profitability
- While net sales grew steadily, operating profit demonstrated higher volatility. The divergence is most evident in 2007 and 2015, where sales remained stable or grew slightly while operating profit declined, leading to the observed margin compression. Conversely, the period from 2018 to 2021 shows operating profit growing at a rate that outpaced sales growth, driving the expansion of the operating margin.
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Comparison to Competitors
Hershey Co., operating profit margin, long-term trends, comparison to competitors
| Hershey Co. | Coca-Cola Co. | Mondelēz International Inc. | PepsiCo Inc. | Philip Morris International Inc. | |
|---|---|---|---|---|---|
| Dec 31, 2022 | 21.70% | 25.37% | 11.22% | 13.33% | 38.56% |
| Dec 31, 2021 | 22.78% | 26.67% | 16.20% | 14.04% | 41.32% |
| Dec 31, 2020 | 21.87% | 27.25% | 14.50% | 14.32% | 40.66% |
| Dec 31, 2019 | 19.98% | 27.06% | 14.86% | 15.32% | 35.33% |
| Dec 31, 2018 | 20.84% | 27.31% | 12.77% | 15.64% | 38.40% |
| Dec 31, 2017 | 16.96% | 21.18% | 13.54% | 16.54% | 40.01% |
| Dec 31, 2016 | 16.21% | 20.61% | 9.91% | 15.58% | 40.53% |
| Dec 31, 2015 | 14.05% | 19.70% | 30.02% | 13.25% | 39.65% |
| Dec 31, 2014 | 18.72% | 21.11% | 9.47% | 14.37% | 39.31% |
| Dec 31, 2013 | 18.75% | 21.83% | 11.25% | 14.61% | 43.29% |
| Dec 31, 2012 | 16.72% | 22.45% | 10.39% | 13.91% | 44.18% |
| Dec 31, 2011 | 17.35% | 21.82% | 12.25% | 14.48% | 42.90% |
| Dec 31, 2010 | 15.96% | 24.06% | 11.51% | 14.41% | 41.16% |
| Dec 31, 2009 | 14.37% | 26.56% | 13.68% | 18.61% | 40.10% |
| Dec 31, 2008 | 11.49% | 26.44% | 9.04% | 16.03% | 39.87% |
| Dec 31, 2007 | 9.28% | 25.13% | 11.63% | 18.16% | — |
| Dec 31, 2006 | 20.08% | 26.19% | 13.17% | 18.33% | — |
| Dec 31, 2005 | 17.80% | 26.34% | 13.93% | 18.19% | — |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).