The Hershey Company stock research
FY2023 Q3
The Hershey (HSY) Gross Margin — Quarter Ended Oct 1, 2023
In the current quarter, revenue and gross profit increased compared to both the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin improved relative to the same quarter last year but experienced a slight decline from the prior quarter.
Gross margin takeaway
Quarter ended Oct 1, 2023 · FY2023 Q3
In the current quarter, revenue and gross profit increased compared to both the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin improved relative to the same quarter last year but experienced a slight decline from the prior quarter.
- The most observable driver is the improvement in gross margin compared to the same quarter last year, as gross profit grew at a faster pace than revenue. However, the sequential decline from the prior quarter reflects a slightly faster increase in cost relative to revenue.
- Compared to the prior quarter, gross margin was slightly lower despite higher revenue and gross profit. Relative to the same quarter one year ago, gross margin was higher as revenue and gross profit both grew while cost increased at a slower rate.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
44.9%
Gross profit
$1.4B
Revenue
$3.0B
Cost of revenue
$1.7B
Quarter-over-quarter change
-0.6 pts
Year-over-year change
+4.3 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 2, 2023 | $3.0B | $1.4B | $1.6B | 46.3% |
| Jul 2, 2023 | $2.5B | $1.1B | $1.4B | 45.5% |
| Oct 1, 2023 | $3.0B | $1.4B | $1.7B | 44.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 2, 2023
-0.6 pts
Year-over-year change
Oct 2, 2022
+4.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver is the improvement in gross margin compared to the same quarter last year, as gross profit grew at a faster pace than revenue. However, the sequential decline from the prior quarter reflects a slightly faster increase in cost relative to revenue.
Compared to the prior quarter, gross margin was slightly lower despite higher revenue and gross profit. Relative to the same quarter one year ago, gross margin was higher as revenue and gross profit both grew while cost increased at a slower rate.
Monitor the trajectory of cost relative to revenue, particularly given the company's recent acquisition of manufacturing capacity.