Hershey Co. (HSY) 10-K Red Flags
Risk signals extracted deterministically from Hershey Co.’s SEC 10-K/10-Q XBRL filings — no LLM, every finding cites the underlying data.
Detected red flags (18)
- Gross margin compression: Gross margin contracted +164.0%pp (from 228.1% to 64.1%). This may reflect input cost inflation, pricing pressure, or product mix shift toward lower-margin segments.
- Material weakness in internal controls: The term "material weakness" appears in 21 recent filing(s) (vs 2 in the prior period). This risk language is ongoing.
- NEW: Restatement of financial statements in latest filing: The term "restate" "financial statements" appears in recent 10-K/10-Q filings but was NOT present in the prior 24-month period. This is a new risk disclosure that warrants attention. Found in 2 filing(s).
- Operating cash flow exceeds net income: OCF is 1.25x net income, indicating high earnings quality — cash conversion is strong and accruals are not inflating reported profits.
- R&D intensity declining: R&D as % of revenue fell from 2.4% to 0.6%. This may signal reduced innovation investment — potentially impacting long-term competitive position. Compare with peer R&D trends.
- NEW: Off-balance sheet arrangements: Off-balance sheet arrangements appears in recent filings but not in the prior 24-month period. Monitor for materiality.
- Endogenous analysis: 3 risk signal(s) detected versus 1 positive signal(s). The balance of evidence suggests elevated filing-specific risk that warrants monitoring in subsequent filings.
- 20 disclosure(s) dropped from prior year — reduced reporting granularity.
- 2 new risk-language term(s) detected in filing text: Restatement of financial statements, Off-balance sheet arrangements.
- Ongoing high-severity risk language: Material weakness in internal controls.
- Market cap $40.76B at $182.14 per share.
- EV/Operating income ≈ 17.80 (EV $45.59B).
- Price $182.14 — downtrend (below 200-DMA); 1-month momentum negative.
- RSI(14) 51.28.
- Composite risk: Elevated.
- Leverage debt/equity 1.12 (moderate).
- Gross margin compression: Gross margin contracted +164.0%pp (from 228.1% to 64.1%). This may reflect input cost inflation, pricing pressure, or product mix shift toward lower-margin segments.
- Material weakness in internal controls: The term "material weakness" appears in 21 recent filing(s) (vs 2 in the prior period). This risk language is ongoing.
Filings & ownership
- Latest annual report (10-K) filed Feb 17, 2026.
- Latest quarterly report (10-Q) filed Apr 30, 2026.
- 7 recent 8-K material-event filings in the index.
- Recent insider Form 4s: 0 buy vs 1 sell transactions — net selling $260.1K.
- ~10,000+ recent 13F-HR filings reference Hershey Co.; broad institutional reporting.
- Recent filers include DSAM Partners LLP, ALLEGHANY CORP /DE, ALLEGHANY CORP /DE.
- 20 recent 13G passive institutional ownership notices.
Full HSY analyst report
Valuation (DCF & Graham), technicals, macro exposure, risk scorecard and 13F/13D ownership.
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