EARNINGS PER SHARE

6 Months Ended

Jul. 02, 2023

EARNINGS PER SHARE

We compute basic earnings per share for Common Stock and Class B common stock using the two-class method. The Class B common stock is convertible into Common Stock on a share-for-share basis at any time. In May 2023, 2,500,000 shares of Class B Common Stock were converted to Common Stock by Hershey Trust Company, as trustee for the School Trust. The computation of diluted earnings per share for Common Stock assumes the conversion of Class B common stock using the if-converted method, while the diluted earnings per share of Class B common stock does not assume the conversion of those shares.


	Three Months Ended
	July 2, 2023				July 3, 2022
	Common Stock		Class B Common Stock		Common Stock		Class B Common Stock
Basic earnings per share:
Numerator:
Allocation of distributed earnings (cash dividends paid)	$	152,389	$	53,801	$	131,077	$	48,823
Allocation of undistributed earnings	150,090		50,703		99,227		36,429
Total earnings—basic	$	302,479	$	104,504	$	230,304	$	85,252

Denominator (shares in thousands):
Total weighted-average shares—basic	149,244		55,447		146,362		59,114

Earnings Per Share—basic	$	2.03	$	1.88	$	1.57	$	1.44

Diluted earnings per share:
Numerator:
Allocation of total earnings used in basic computation	$	302,479	$	104,504	$	230,304	$	85,252
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock	104,504		—		85,252		—
Reallocation of undistributed earnings	—		(213)		—		(189)
Total earnings—diluted	$	406,983	$	104,291	$	315,556	$	85,063

Denominator (shares in thousands):
Number of shares used in basic computation	149,244		55,447		146,362		59,114
Weighted-average effect of dilutive securities:
Conversion of Class B common stock to Common shares outstanding	55,447		—		59,114		—
Employee stock options	468		—		585		—
Performance and restricted stock units	374		—		388		—
Total weighted-average shares—diluted	205,533		55,447		206,449		59,114

Earnings Per Share—diluted	$	1.98	$	1.88	$	1.53	$	1.44

The earnings per share calculations for the three months ended July 2, 2023 and July 3, 2022 excluded 12 and 4 stock options (in thousands), respectively, that would have been antidilutive.


	Six Months Ended
	July 2, 2023				July 3, 2022
	Common Stock		Class B Common Stock		Common Stock		Class B Common Stock
Basic earnings per share:
Numerator:
Allocation of distributed earnings (cash dividends paid)	$	305,944	$	107,602	$	263,337	$	97,647
Allocation of undistributed earnings	432,943		147,679		356,240		131,810
Total earnings—basic	$	738,887	$	255,281	$	619,577	$	229,457

Denominator (shares in thousands):
Total weighted-average shares—basic	148,914		55,864		146,248		59,530

Earnings Per Share—basic	$	4.96	$	4.57	$	4.24	$	3.85

Diluted earnings per share:
Numerator:
Allocation of total earnings used in basic computation	$	738,887	$	255,281	$	619,577	$	229,457
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock	255,281		—		229,457		—
Reallocation of undistributed earnings	—		(669)		—		(722)
Total earnings—diluted	$	994,168	$	254,612	$	849,034	$	228,735

Denominator (shares in thousands):
Number of shares used in basic computation	148,914		55,864		146,248		59,530
Weighted-average effect of dilutive securities:
Conversion of Class B common stock to Common shares outstanding	55,864		—		59,530		—
Employee stock options	486		—		592		—
Performance and restricted stock units	423		—		491		—
Total weighted-average shares—diluted	205,687		55,864		206,861		59,530

Earnings Per Share—diluted	$	4.83	$	4.56	$	4.10	$	3.84

The earnings per share calculations for the six months ended July 2, 2023 and July 3, 2022 excluded 12 and 4 stock options (in thousands), respectively, that would have been antidilutive.