What The Hershey Company told the SEC could break it.

Higher commodity costs (chiefly cocoa) drove $736.6M of unfavorable cost and helped cut gross margin ~1,380 bps to 33.5% in 2025, with $491M of unfavorable mark-to-market on commodity hedges — Hershey's dominant input risk.

“The increase was driven by $1,965.1 million of unfavorable costs, primarily related to $736.6 million in higher commodity costs, $287.2 million in higher supply chain costs, including tariffs, as well as $491.0 million of unfavorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years' commodity purchases”

Tariffs on U.S. imports and retaliatory tariffs had a material negative impact on Hershey's 2025 results and commodity prices; it is monitoring duties on goods from Canada, Mexico and others in markets where it operates.

“For the year ended December 31, 2025, the imposition of tariffs on U.S. imports and retaliatory tariffs, had a material negative impact on our results of operations and commodity prices. We are continuing to monitor the ongoing negotiations related to tariffs, specifically, goods imported into the U.S. from Canada, Mexico and other countries, as well as export markets, in which we have significant business operations, all of which may result in material adverse effects on our results of operations.”

Hershey's agricultural-ingredient value chain — most acutely its cocoa supply chain — faces significant climate and land-use-change risk, threatening ingredient resilience and food-production systems.

“Climate and broader changes in the environment pose a significant and increasing risk to global food production systems and to the safety and resilience of the communities where we live, work and source our ingredients. The GHG impacts of land-use change are most pronounced in our cocoa supply chain, where we have already been working for several years to prevent deforestation and build climate and ingredient resilience.”

McLane Company is Hershey's largest customer concentration — ~16% of total accounts receivable at year-end 2025 (served mainly through the North America Confectionery segment); no other customer exceeded 10% of AR.

“As of December 31, 2025, McLane Company, Inc. accounted for approximately 16 % of our total accounts receivable. No other customer accounted for more than 10% of our year-end accounts receivable.”