EARNINGS PER SHARE

6 Months Ended

Jul. 03, 2022

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 June 2022, 1,500,000 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 3, 2022				July 4, 2021
	Common Stock		Class B Common Stock		Common Stock		Class B Common Stock
Basic earnings per share:
Numerator:
Allocation of distributed earnings (cash dividends paid)	$	131,077	$	48,823	$	117,257	$	44,308
Allocation of undistributed earnings	99,227		36,429		101,414		38,251
Total earnings—basic	$	230,304	$	85,252	$	218,671	$	82,559

Denominator (shares in thousands):
Total weighted-average shares—basic	146,362		59,114		146,111		60,614

Earnings Per Share—basic	$	1.57	$	1.44	$	1.50	$	1.36

Diluted earnings per share:
Numerator:
Allocation of total earnings used in basic computation	$	230,304	$	85,252	$	218,671	$	82,559
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock	85,252		—		82,559		—
Reallocation of undistributed earnings	—		(189)		—		(179)
Total earnings—diluted	$	315,556	$	85,063	$	301,230	$	82,380

Denominator (shares in thousands):
Number of shares used in basic computation	146,362		59,114		146,111		60,614
Weighted-average effect of dilutive securities:
Conversion of Class B common stock to Common shares outstanding	59,114		—		60,614		—
Employee stock options	585		—		622		—
Performance and restricted stock units	388		—		324		—
Total weighted-average shares—diluted	206,449		59,114		207,671		60,614

Earnings Per Share—diluted	$	1.53	$	1.44	$	1.45	$	1.36

The earnings per share calculations for the three months ended July 3, 2022 and July 4, 2021 excluded 4 and 43 stock options (in thousands), respectively, that would have been antidilutive.


	Six Months Ended
	July 3, 2022				July 4, 2021
	Common Stock		Class B Common Stock		Common Stock		Class B Common Stock
Basic earnings per share:
Numerator:
Allocation of distributed earnings (cash dividends paid)	$	263,337	$	97,647	$	235,687	$	88,617
Allocation of undistributed earnings	356,240		131,810		270,866		101,859
Total earnings—basic	$	619,577	$	229,457	$	506,553	$	190,476

Denominator (shares in thousands):
Total weighted-average shares—basic	146,248		59,530		146,550		60,614

Earnings Per Share—basic	$	4.24	$	3.85	$	3.46	$	3.14

Diluted earnings per share:
Numerator:
Allocation of total earnings used in basic computation	$	619,577	$	229,457	$	506,553	$	190,476
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock	229,457		—		190,476		—
Reallocation of undistributed earnings	—		(722)		—		(484)
Total earnings—diluted	$	849,034	$	228,735	$	697,029	$	189,992

Denominator (shares in thousands):
Number of shares used in basic computation	146,248		59,530		146,550		60,614
Weighted-average effect of dilutive securities:
Conversion of Class B common stock to Common shares outstanding	59,530		—		60,614		—
Employee stock options	592		—		606		—
Performance and restricted stock units	491		—		356		—
Total weighted-average shares—diluted	206,861		59,530		208,126		60,614

Earnings Per Share—diluted	$	4.10	$	3.84	$	3.35	$	3.13

The earnings per share calculations for the six months ended July 3, 2022 and July 4, 2021 excluded 4 and 43 stock options (in thousands), respectively, that would have been antidilutive.