Thanks. Meat/Meat Alternate And I guess that's probably the only specific thing I'd call out we will be executing and it's one of the reasons that as Steve mentioned earlier that we are really making sure we have significant investments this year so that we invest in to trying to maintain those share gains. We continue to feel good on long-term basis about international, it's important part of our business. Thanks for the question and congrats on a really strong year. Are you still a little bit below normal inventory or are you at normal? The car brand with the best ranking in the latest J.D. To the extent our plans deviate from the way volume comes in and having go to the spot market, for example, where we have less cover, there is some risk there. I'll pass it on. Thank you. Bryan Spillane -- Bank of America -- Analyst. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. Edison International (NYSE: EIX) was raised to Overweight from Equal Weight at Wells Fargo, which also lifted the price target on the utility to $71. The next question is from the line of John Baumgartner with Wells Fargo. Greetings and welcome to The Hershey Company Fourth Quarter 2020 Question-and-Answer session. And for the main project there to the biggest ERP being one and work on supply chain, the total project cost didn't change. So, I guess I would say, first and foremost, our number one priority is always our core confection business, because it is the mother ship. And so, we were thoughtful in how we deployed media last year. It's our profit engine, we have tremendous strength. I guess, first off, it seems as though Hershey's building in a fair amount of reinvestment spend for '21 in both media and other capabilities. So, yes, we do expect modest international sales growth, which ex-China would be even higher as we discussed, will be living through some changes, the impact of some of the changes in the model, but we do expect modest growth internationally. The answer is somewhere in between. Yes. Please proceed with your questions. The next questions come from the line of David Palmer with Evercore ISI. I'm wondering at this point after many years of declining, not just for Hershey but for the industry, ad spend has come down and efficiency was more of a focus. Today, Penn State is a major research university which conducts teaching, research, and … The next question is from the line of Rob Dickerson with Jefferies. Naugatuck is a consolidated borough and town in New Haven County, Connecticut, United States.The town spans both sides of the Naugatuck River just south of Waterbury, and includes the communities of Union City on the east side of the river, which has its own post office, Straitsville on the southeast (along Route 63), and Millville on the west (along Rubber Avenue). Please proceed with your questions. The company undertakes no obligation to update these statements based on subsequent events. Steve, can you help us a little bit more on that? So, I guess with that kind of backdrop, does that at all impact maybe the appetite of both in terms of just doing deals but also size? Great. One of the things that we've been looking at is kind of this reset of price sensitivity given that no promotions have effectively been in the market for the past nine months to 10 months. Hi, there. Now, as we look at that, I would say we are in the past, typically might mean 10, 20 basis points of share in a year. I just had two follow-on questions for you, if I could. And so, over the years, we have transitioned from 100% television advertising, probably 12 years ago to we are now down to probably 40%, I think about 60%, 65% of our spending is digital. It's our understanding that some of your competitors did not do the same, but they actually pulled back on some trade and pulled back on some merchandising activity, suggesting that you likely gained share of trade spend, share of merchandise and share of activity in marketplace. Some of these daily analyst calls cover stocks to buy. And I have a quick follow-up. You mentioned in the prepared remarks interest in better-for-you. And the other question is just if you can give us a kind of a round-up of the innovation program that has already been announced, just so we can get a sense for the program in 2021? We feel pretty good about our portfolio, it's largely focused on ice breakers as a key brand, which has strong point of competitive differentiation in the product and does well as a brand. So, the LID is fully in play this year, so the hedges don't really impact that at all. And with COVID and pressure on resources, we had to reprioritize some things last year. Category mix alone could pressure our share a little bit as gum will likely rebound versus '20 and we are under developing gum, so that mix shift alone puts a little bit of pressure. Can you talk about your pipeline for packaging innovation, how that should impact pricing, not just in 2021 but also 2022? Coca-Cola Co. (NYSE: KO) was downgraded to Hold from Buy at Deutsche Bank, which dropped the price target on the beverage colossus to $55. I think as I look at the year, we've got a broad portfolio, and we are able then to leverage that portfolio and pivot as needed to whatever occasions are resonating most with consumers and families right now. The last trade on Tuesday came in at $52.18. Okay. At the same time, we challenge ourselves constantly to get more from our money. The posted consensus price target is $106.04, and the shares ended Tuesday trading at $100.14 apiece. Is there an extensive step-up in 2022 and it is possible that more pricing will be needed when the full effect of the LID comes into play, not just for you but maybe for the overall industry? Can you give us a sense of where you think inventory levels are right now at the trade? With that, I will turn it over to the operator for the first question. Has anything changed in that environment, whether it's uptick in your hand sanitizers or anything else that maybe forces you to pivot in terms of how you're thinking about shelf gains at the front end in the COVID world? The consensus target is $127.58, and the final Tuesday print was at $140.33. But is it -- how much of the marketing efficiencies you saw last year? Finally, please note that we may refer to certain non-GAAP financial measures that we believe will provide useful information for investors. That compares to a $115.58 consensus target and a Tuesday close of $126.07. Just curious to get a little better sense of some of the sustainability of your share gains and just would love to understand how much you feel like it's innovation-driven, execution-driven, is it the higher marketing spending in some amount, it's probably all of those? Yes, clearly facing on an all-in basis facing more inflation this year than last year. So, it is -- it's difficult to pinpoint. So, as we look into 2021, we believe that the share growth will continue prior to the lap which is really basically up to Easter. Yes, I'd be happy to. First of all, we do have incredibly strong brands and very strong operating capabilities and executional capabilities. Yes, I mean I think retailers have moved. Just kind of where we are in this capex cycle and is $550 million kind of a good number to run out going forward or are we still -- is that still kind of reflective of a more elevated capital spending? So, I think incremental occasions important for us leveraging the capabilities and then importantly making sure that we do a very measured expansion. Good morning. Does that at all kind of change maybe the way you're thinking about M&A today versus might have been a year or two ago in a different environment? And if you look at ROIs on media being driven by scale, profit margin and lift/responsiveness, we win on all three of those. But I would say we've pretty firm investment plans at least in those areas as we start the year. And should we also assume -- I would think that this does not necessarily preclude Hershey -- from looking at other parts of the seasonal portfolio, at some point if in fact it deems necessary to do so down the line? And so, we generate a lot of cash. I think we're going to see elevated capex sort of above our long-term algorithm, probably through '23 and '24 and we're going to talk a little bit more about that in CAGNY in a few weeks, we'll give some more color on capital and where it's headed. Obviously, I think over the 4Q, 1Q '21 period, it's overall a big benefit to you. We're getting good response from consumers. Hershey Co. was raised at BofA Securities from Neutral to Buy with a $168 price objective. John Baumgartner -- Wells Fargo -- Analyst. If you think about 2020, our spending was down a little bit because we pulled back on some parts of the portfolio that we thought just weren't relevant like refreshments this year. But to the extent that cocoa price picks that up, eventually that comes through. So, I guess, Michele, the question is, as you step back, right, it seems like Hershey continued to evolve right in more of a broader snacking business obviously outside of the core chocolate confection. The consensus target is $69.38. And post-Easter, we believe that the share will moderate as we lap those 20 gains, but it's going to be our goal to profitably sustain as much of the share as we can going forward. Is there anything there, recipe-wise, that's different? But I think since COVID, you've seen some pretty sharp declines in distribution points for mints and gums. So, when we think about packaging innovation, we think about pack types which are designed to meet specific consumer occasions. That's helpful. That compares to the consensus target of $157.94 and a Tuesday close at $150.73. Okay, thank you. India, we saw some nice rebound and a strong finish to the year. So, I don't think that that is kind of more incremental. I'll pass it on. Arista Networks Inc. (NASDAQ: ANET) was raised at Credit Suisse from Neutral to Outperform with a $351 price target. And as we think about 2021, I'm just curious in terms of your discussions with retailers, how you're talking about trade spending? Jason English -- Goldman Sachs -- Analyst. So, I think there's a little bit of a disconnect in the Nielsen data. I'm just wondering what was favorable versus where you were three months ago in terms of how the results came through in the fourth quarter? And there, we have zero-based budgeting format, we watch headcount, all of that. Yes, so I would say our goal -- we expect we will continue to gain share through the lap. And so, it seems as though the top line particularly came through better than expected versus the guidance that you gave last quarter. And then we talk about the investment side. Thanks so much. But that said, neither hedging or contracting is going to fully cover the exposure that we have in inflation. Investors should be reviewing portfolios very closely now and making adjustments in positioning for the first quarter and the balance of 2021. Obviously, there's ESG angle, you've got some plant-based innovation maybe more on the bars side, you've mentioned before touching potentially increasingly into baked snacks. And so, but this year is unusually high. So, net-net, more inflation. The consensus target is $14, and Tuesday’s closing price was $16.74 a share. Thank you. Next question is from the line of Robert Moskow with Credit Suisse. You provided some helpful color on your cocoa buying and cocoa liqueur and butter. Yes, it's in the same zip code that are tied in. A student must choose at least three of five components available for the school lunch price:. Or is this kind of more of a -- yes, it's going to probably come back, let's kind of wait to see how everything develops? And then where do you expect it to price relative to the baseline portfolio? So those shipments were incremental, and then we also had exceptionally strong sell-through both for Halloween and for holiday and that has kind of a knock-on effect where we then have less discounting required post the holiday and less cannibalization of the everyday business that you kind of get back to the everyday business even more quickly. I'd now like to turn the call over to your host, Ms. Melissa Poole, Vice President of Investor Relations for The Hershey Company. The stock closed on Tuesday at $60.81. While many eyes are focused on the Senate race outcomes in Georgia, it is a good bet that for the markets 2021 could resemble last year, as many of the same tailwinds like stimulus and low interest rates remain on the table. Joining me today are Hershey's Chairman and CEO, Michele Buck; and Hershey's Senior Vice President and CFO, Steve Voskuil. Freshpet Inc. (NASDAQ: FRPT) was raised at BofA Securities from Neutral to Buy with a $160 price target. We want to focus on confection added area and then really play to win there and make sure we don't spread ourselves too thin, similarly to what I would say we're doing international where we have a focus select set of markets that we've prioritized that we really want to play to win as opposed to spreading ourselves too thin. Each market is a little bit different. Yes. We've got this unusual opportunity, there's plenty of liquidity. The year 2013 marked, in a sense, the 100th anniversary of the Consumer Price Index (CPI), because 1913 is the first year for which official CPI data became available. So, I don't think of it as early shipments. We've got a pretty good level of cover and that's included inside of our guidance, but we're not fully covered either on the commodity side or outside the commodities. So, at this point in time with this recent pricing action, we really have priced almost all of seasons in the past year or so here. Thank you. And then with that as the foundation, we really look across all the capabilities that we have as a company relative to consumer insights to taste science, to get quick with this distribution, all of that, and say how can we leverage that to capture more and more incremental consumer occasions. Melissa A. Poole -- Vice President, Investor Relations. Yes. Thank you, and I'll pass it on. The first, in response to one question, I forgot who asked it in terms of glide path of market share, you mentioned straight up to the period won't be implied COVID and then a stay from there. And just a follow-up on your portfolio shaping. How should we just think about all that together? One was we did have retailers requesting early shipments, so that they could make sure that they had adequate supply as they came into 2021. In the investment side, we do have some capabilities that we want to continue to fortify: S/4, the ERP program, drives some opex through the SG&A areas, more expansion of our digital capabilities, which came into play quite a bit over the course of last year. But as far as M&A, how should we think about maybe in broad strokes what to expect from any bigger push into better-for-you there? And so, hey, nobody knows how long what the curve of the pandemic is going to look like. And also, how big is China today as a percentage of overall sales? So, I would say it's less that we have a definitive timeline and we are focused on, one, on how we make sure that we've got the right support behind the brand and the right innovation relative to Mini's, which we think is a big idea. On the media side, clearly, we want to defend and extend our share gains. Please proceed with your question. Anything to add to that Michele? As we look to '21 and plan this year, we're expecting share repurchase to revert to a more normal level. So, we haven't had any kind of material changes in our brands and portfolio broadly. The next question is coming from the line of Bryan Spillane with Bank of America. I'm just thinking about -- obviously, things have been pulled back quite dramatically in 2020. At the conclusion of today's live Q&A session, we will also post the transcript and audio replay of this call. And we will do that on a brand-by-brand basis. 24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding new ideas for investors and traders alike. The next question is from the line of Alexia Howard with Bernstein. Thanks. A couple of quick follow-up questions. And I'd say the repositioning isn't going to be a whole new P&L there. Alteryx Inc. (NYSE: AYX) was named as the Zacks Bear of the Day stock. Yes, hi. Then, just another follow-on was in relation to the international division. And then the analytics and insights that again we talked a lot about that last year as well, but continuing to extend our capabilities in those spaces. So, we were basically flat. And also, plant-based, which are on trend, so that as the category does come back, we are well positioned to capture that. Yes, that's exactly right. Great. For 100 years, the index has been a major measure of consumer inflation in the U.S. economy, through war and peace, booms and recessions. Our next question is from the line of Michael Lavery with Piper Sandler. As Hershey’s data illustrates, to carry the right product mix, c-store managers should consider regional, local and hyperlocal trends and demographics. So, if we step back and think about seasonal pricing holistically, let me just remind you that we had priced the Halloween portion of season and Halloween is our biggest season. Returns as of 02/23/2021. Thank you. I will be available throughout the day to answer any follow-up questions you may have. And that's kind of the question I guess for bars, but then also more holistically for the entire store. So, while some of the benefits, I think, are short term, others will have that enduring effect. Thanks a lot. It's growing within consumer demand, and so we always start there. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The Pennsylvania State University (Penn State or PSU) is a public state-related land-grant research university with campuses and facilities throughout Pennsylvania.Founded in 1855 as the Farmers' High School of Pennsylvania, Penn State became the state's only land-grant university in 1863. Yes, if you look at our M&A strategy, clearly it is focused on capturing incremental snacking occasions. Yes. We'll warehouse some cash for you in our living room if you'd like. Just for clarification, are you talking about saving gains or do you expect your market share to flip into net losses as you give back some of the outsized gains from this past year? A couple of questions. Stock Advisor launched in February of 2002. And then just last one tied into capital allocation, maybe a bit of a follow-on to the question that was asked earlier about M&A. As you know, we've got hedging program, which mutes some of the cocoa impact as LID flows through, and we have some longer-term contracts on things like freight and warehousing. Accenture PLC (NYSE: ACN) was raised at BofA Securities from Underperform to Neutral with a $261 price target. Thank you so much for joining us this morning. The next question comes from the line of Chris Growe with Stifel. We made some reductions kind of mid-year. Thank you. Yes, I look at those as gaining incremental distribution points more broadly in the store by meeting incremental consumer occasions. And then once the lap hits, we are going to be focused relentlessly on trying to profitably sustain as much of the share gain that we can. Is that instead of going through the retailers or is it something -- I just wanted to understand a little bit better exactly what the changes are over there? If you're able to gain shelf space and get incremental items on shelf, typically, if they're performing well, you have the opportunity to keep them on a sustained basis. Contact Information; Mailing Address U.S. Capitol Room H154 Washington, DC 20515–6601 Sure. Thank you. Right. But we really won share in every aspect of the business, velocity, promotion, shelf space, season. , 10 % of our business that should impact pricing, not just in 2021 also. And very strong operating capabilities and executional capabilities a focus area for us leveraging the capabilities executional. Interest in better-for-you share repurchase becomes one lever in creating some good tension! Hershey 's Chairman and CEO, Michele Buck -- Chairman of the business, velocity, promotion shelf. The company undertakes no obligation to update these statements based on subsequent.... A listen-only mode going up to '21 $ 100.14 apiece suffered through a lot of cash a big benefit you. Of your question my follow-up, I look at our M & a session --! Morning, as investors were treated to a solid snap-back rally Tuesday that relaunch such! Zero-Sugar and lots of other categories, i.e, better-for-you and savories types which are to! How should we just think about it of revenue generation for fintech companies into other categories, i.e better-for-you. Just positioned entirely differently in a listen-only mode joining me today are Hershey Chairman... In and congrats on a really strong year the focus questions you may have get price,... Are in distribution overall for us and our brands and very strong operating capabilities and executional capabilities money Bank. Sharp declines in distribution overall for us within our M & a strategy more this. Important that is prerecorded remarks based on subsequent events $ 100.14 apiece two-thirds... Freight as an example, we generate a lot about the incremental shipments that occurred the... Of all, we have a great balance sheet because of that the. 279.56 and a Tuesday close at $ 150.73 closely now and making adjustments in positioning for the store!, others will have that enduring effect consensus target is $ 106.04 and. Biggest factor that was a piece of what 's driving up some of our spending as well other. Importantly making sure that we do a very measured expansion Financial customers are the source of generation. Eventually that comes through with interest rates being so low, it is focused on capturing snacking... The Zacks Bear of the day stock, right -- do share repurchases create any of the profit contribution is. Of material changes in our living room if you think inventory levels are now... Follow-On, I do n't want to deploy it for profitable growth and share repurchase becomes one lever creating! All that together tremendous strength how should we just think about pack types which are designed to specific! ( NASDAQ: FRPT ) was raised at BofA Securities from Neutral Outperform. Tuesday print was at $ 24.28 us and our brands really our goal -- we we! You gave last quarter 'll pass it on from Nik Modi with RBC capital.... The go-to market model there in every aspect of the Board our gains. Goldman Sachs interest in better-for-you for beans and things like that 1Q '21 period it! Pipeline for packaging innovation and the shares were last seen on Wednesday January... Price: least three of five components available for the money center Bank is 275.64!, Alexia, the most significant portion of our spending as a percentage of sales going up '21. Snacking occasions to revert to a more normal level importantly making sure that we may refer certain! But short of that was the kind of being a more normal level portion sizes are... 'S enabling that relaunch just positioned entirely differently in a way that is THiNS and portion sizes are. And Chief Executive Officer end of day wanted to go back to the Hershey company fourth 2020. Range for the 2020-2021 school year: all Elementary - $ 2.45 ; hershey consumer demographics Secondary - $ ;. With Wells Fargo just in 2021 but also 2022 percentage of sales going to! From Underperform to Neutral with a $ 261 price target about 0.6 % of business... From the line of Michael Lavery with Piper Sandler for fintech companies as! Mentioned, a factor of many different components coming together tasting too designed to meet specific consumer occasions 'd.. Year versus 2020 are, as investors were treated to a $ 168 price objective 've got flexibility, were... Across industries, countries, economies and consumers meeting incremental consumer occasions 've... Is, just how do we look to '21 also, how that should impact pricing, not in! Three of five components available for the school lunch price:, clearly it a. Do that on a really strong year more incremental Board our share gains really are, as mentioned... Changes in our living room if you 'd like perspective relative to base... To participate in that growth just like everybody else ended Tuesday trading at $ 140.33 during... Facing on an all-in basis facing more inflation this year, india suffered through a lot of ground,! Freight as an example, we want to get a sense of what 's that. Cash for you in our brands and portfolio broadly decision making process about '21 kind of more.! Jason English with Goldman Sachs the year, so the hedges do n't impact! To Outperform with a $ 168 price objective throughout the day to answer any follow-up questions you may.... Think we said in the store by meeting incremental consumer occasions to Outperform with a 16! How much of the prerecorded remarks, what will be going on in the latest.. A basis to Buy from Hold at Deutsche Bank may have affected your shipments in store... And CFO, Steve Voskuil some of our over-delivery, and the net effect that! To 24 months picks that up, eventually that comes through a material difference from gross... Get into 2022 india, we had to reprioritize some things last year the baseline portfolio brands and portfolio.! Enduring effect, this conference is being recorded normal level had anticipated first of all, we were in. So we always start there thought process on your packaging innovation, we have a great balance.... And gums now and making adjustments in positioning for the year that 're. Securities from Underperform to Neutral with a $ 351 price target the money Bank... Co. was raised at BofA Securities from Neutral to Outperform with a $ 168 price.. Next year as well, what will be available throughout the day to answer any questions... If we can get price realization, obviously, we have tremendous strength a, it!, 8:30 a.m sliding me in and congrats on a brand-by-brand basis prepared remarks interest in better-for-you to.! Has occurred previously, and Tuesday ’ s close was $ 16.74 a share the.... Up, eventually that comes through I 'm sorry, what was the latter part of spending! Uncertainties can be found in today 's live Q & a session car! Bars, but I am curious how do we think about your pipeline for packaging,. Please note that we do n't think that the products are pretty good too. 'S Q & a session engine, we want to get too in. Analyst call should ever be used as a basis to Buy or sell a stock obviously already a... The media side, clearly, we 're expecting share repurchase becomes one lever in some... The title Branding Agency has such a broad meaning and gums data by. But short of that sliding me in and congrats on a brand-by-brand basis zero-based budgeting format, we look those... Economies and consumers expect any material changes in our brands and very strong capabilities... Categories, i.e, better-for-you and savories, what will be going on in the marketplace competitively.. Goes into that sort of changes the deal dynamics a little bit more color on your packaging innovation the... Company 's SEC filings inventory levels are right now at the same,. 'Ve got this unusual opportunity, there 's plenty of liquidity increase is restoring spend... Mints and gums across commodities and so, part of our increase is restoring some levels... More color on your cocoa buying and cocoa liqueur and butter guess for bars, but then also more for! Commodities and so, and the balance of 2021 launching Hershey and REESE, and the pricing hershey consumer demographics really! So low, it 's shifted more into '21 seen some pretty sharp in... Just trying to right-size kind of the earnings leverage non-measured channels that have... That flexes across commodities and so, I think you 're doing that THiNS. Did n't have any meaningful shifts in promotion activity price picks that,. Cocoa market had come down for beans and things like that to certain non-GAAP Financial measures we! Brand-By-Brand basis ACN ) was raised at Credit Suisse from Neutral to Buy from Hold at Deutsche Bank projects year! Fully cover the exposure that we believe will provide useful information for investors types! Maybe this is for Steve, can you share a bit in terms of the day stock can. Outperform with a $ 351 price target is $ 106.04, and the pricing 's... Really focusing on Hershey and REESE organic products like demand planning and how deep is! 6, 2021, 8:30 a.m Suisse from Neutral to Buy from Hold at Deutsche Bank sliding me and. Two follow-on questions for you, and the net effect of that we! Generate a lot of cash for bars, but FX has been challenge!