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The Hershey Company (NYSE: HSY)
Investment Summary

Overviews
The Hershey’s Company is a U.S. leader in the chocolate manufacturing industry, with international exposure as well. Hershey’s was founded by Milton Hershey in 1894 with the mission to create a smile for all candy lovers. The company has a large product line of candy. The core brands consist of the Hershey’s Bar, Hershey’s Kiss, and Reese’s. Hershey’s products are found in over 80 countries and Hershey’s strategically focused to increase international global market share. Currently, its business strategy is to focus on innovation of new products, core brands, and recent business acquisitions to maintain its stable revenue. Hershey’s 5-year compound growth rate is 6.8%, and the company experienced positive growth during the economic downturn. Overall, Hershey’s main competitors are Mars, Mondelez, and Nestle.
RISKS
As the economy continues to recover from the economic downturn, increased prices in the cost of sales will occur, especially as Hershey’s moves towards certified cocoa. Cocoa beans, sugar, and dairy show trends of increased prices; however, Hershey’s uses hedging instruments to minimize the impact of higher cost of sales. Therefore, the company is able to maintain the average cost of sale of 56%. Also, Hershey’s has lost international market share, but recent acquisitions Brookside and Shanghai Golden Monkey Food have recently shown improvement in international presence. Also, consumers demand for healthier chocolate candy is causing Hershey’s to invest in innovated candy. The company has kept up with customer feedback throughout the years. Figure 1 shows the net profit of Hershey’s compared to its major competitors and concludes its strategies are continuing to bring success, especially in year 2013 when Hershey’s surpassed its competitors.
FUTURE OUTLOOK
Hershey’s is heavily

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