What Happened?

Shares of chocolate company Hershey (NYSE: HSY) jumped 4% in the afternoon session after new economic data showed unexpected strength in U.S. consumer spending, boosting investor confidence in consumer-focused stocks. 

The broader market rallied after the U.S. Census Bureau reported that retail sales rose more than expected in June, a sign of a resilient consumer. This encouraging economic picture is particularly beneficial for consumer staples companies like Hershey, as it suggests shoppers still have the capacity and willingness to spend on everyday items and treats. The positive data helped ease investor fears about a potential recession, lifting stocks across the consumer sector. The move provided a boost for Hershey, which has faced headwinds from surging cocoa prices and has seen its earnings per share forecast for 2025 contract., Investors appeared to set aside those concerns for the day, focusing instead on the favorable macroeconomic backdrop for consumer demand. 

Also, the second quarter (2025) earnings season got off to a strong start. Quarterly earnings reports released during the week exceeded Wall Street's expectations, fueling investor confidence. Around 50 S&P 500 components reported, with 88% of those exceeding analysts' expectations, FactSet data revealed.

The shares closed the day at $171.21, up 4.3% from previous close.

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What Is The Market Telling Us

Hershey’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock gained 16.4% after Bloomberg reported that Mondelez, the company behind Oreo cookies, was exploring a potential buyout of Hershey. Sources noted the discussions were still in the early stages, and Mondelez was unlikely to make an offer. 

Hershey has a history of turning down acquisition attempts. In 2016, it rejected a $23 billion takeover bid from Mondelez. Had Hershey accepted, the deal would have formed the world's largest candy company. Most acquisitions close at a premium, raising the possibility that existing investors could exit their positions at a higher price if Hershey strikes a deal with a buyer.

Hershey is up 0.7% since the beginning of the year, but at $170.01 per share, it is still trading 16.4% below its 52-week high of $203.25 from September 2024. Investors who bought $1,000 worth of Hershey’s shares 5 years ago would now be looking at an investment worth $1,246.

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