Hershey Company ( HSY ) shares are trading lower in premarket on Thursday after its first-quarter FY25 earnings.

The company reported a 13.7% year-over-year decline in first-quarter revenue to $2.81 billion, beating the analyst consensus estimate of $2.79 billion.

Hershey's North America Confectionery segment net sales declined 15% year-over-year to $ 2.3 billion. Sales for Hershey's International segment decreased 15.9% to $227.5 million.

Gross margin contracted 1780 basis points Y/Y to 33.7%, and gross profit plunged 43.6% Y/Y to $944.3 million.

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The operating margin compressed by 1930 basis points to 13.2%, and the operating income for the quarter slumped 65.1% to $369.2 million.

Adjusted EPS of $2.09 beat the consensus estimate of $1.95. Hershey held $1.51 billion in cash and equivalents as of the end of March.

“Despite heightened cost pressure, our strong balance sheet gives us flexibility to invest in the business and participate in recent strategic acquisitions that further expand our better-for-you portfolio and drive long-term value creation," said CEO and president Michele Buck.

Outlook: Hershey reaffirmed FY25 net sales growth of at least 2% (more than $11.43 billion with an estimate of $11.41 billion) and adjusted EPS of $6.00 – $6.18 against the consensus of $6.13.

Tariff expense, as understood today, is expected to be approximately $15 million to $20 million in the second quarter.

Price Action: HSY shares traded lower by 2.51% at $163.00 in premarket at last check Thursday.

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