Hershey Reports First-Quarter 2026 Financial Results
Rhea-AI Summary
The Hershey Company (NYSE: HSY) reported first-quarter 2026 net sales of $3,104.2 million, up 10.6%, and reported net income of $435.1 million (diluted EPS $2.13), up 93.6%. Organic, constant-currency net sales rose 7.9%; adjusted EPS was $2.35, up 12.4%.
The company reaffirmed 2026 guidance: net sales growth 4–5%, organic growth 2.5–3.5%, reported EPS $7.77–$8.19 and adjusted EPS growth 30–35%. Reported gross margin was 39.4%, up 570 bps; adjusted gross margin was 40.4%, down 80 bps. The LesserEvil acquisition provided an estimated ~150 bps full‑year benefit.
Positive
- Net sales +10.6% to $3,104.2 million
- Reported net income +93.6% to $435.1 million
- Adjusted EPS +12.4% to $2.35
- North America Salty Snacks net sales +26.0% (LesserEvil contributed ~20 points)
Negative
- Adjusted gross margin down 80 basis points to 40.4%
- North America Salty Snacks segment income down 18.1%
- International segment income declined by $13.4 million; segment margin down 680 basis points
- Company volume/mix declined ~2 points overall; North America Confectionery volume down ~4 points
Key Figures
Market Reality Check
Peers on Argus
HSY gained 0.66% with strong Q1 results, while peers were mixed: MDLZ +1.73%, SYY +2.03%, KDP +0.68% versus ABEV -1.04% and FMX -0.91%, suggesting a company-specific reaction rather than a uniform sector move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 05 | Q4 2025 earnings | Neutral | +9.0% | Q4 and 2025 results with 2026 growth outlook and EPS rebound framing. |
| Oct 30 | Q3 2025 earnings | Neutral | -2.4% | Q3 growth but sharply lower EPS and a raised 2025 outlook for sales and EPS. |
| Jul 30 | Q2 2025 earnings | Negative | +1.4% | Strong Q2 sales but big earnings declines and a weaker 2025 EPS outlook. |
| May 01 | Q1 2025 earnings | Negative | -0.0% | Q1 2025 revenue and EPS drops with gross margin compression and tariff headwinds. |
| Feb 18 | CAGNY outlook | Neutral | +3.2% | Reaffirmed 2025 outlook with sizable projected EPS declines and strategy review. |
Earnings-related news has produced mixed reactions, with some strong upside on outlook updates but also selloffs when guidance highlighted margin or EPS pressure.
Recent earnings communications show Hershey navigating a volatile transition. In Q1 2025, net sales and EPS declined sharply, and through mid-2025 multiple quarters featured higher sales but weaker reported earnings amid tariffs and cost inflation. By Q4 2025, the company framed 2026 as a rebound year, outlining net sales growth of 4–5% and adjusted EPS of $8.20–$8.52. Today’s Q1 2026 release reinforces that same 2026 outlook while showing double‑digit net sales and adjusted EPS growth versus the prior year quarter.
Historical Comparison
Prior earnings and outlook updates for HSY moved the stock by an average of 2.26%, showing that fundamental reports have often been meaningful trading catalysts.
Across 2025 earnings, Hershey showed resilient top‑line growth but pressured EPS and margins from tariffs and higher costs. The Q4 2025 and 2026 outlook set expectations for a recovery in profitability. The current Q1 2026 results, with double‑digit net sales and adjusted EPS growth plus reaffirmed 2026 guidance, fit into this progression toward rebuilding earnings power.
Market Pulse Summary
This announcement highlights a solid start to 2026 for Hershey, with Q1 net sales of $3,104.2M, organic constant‑currency growth of 7.9%, and adjusted EPS of $2.35, up 12.4%. Management reaffirmed full‑year guidance calling for 4–5% net sales growth and 30–35% adjusted EPS growth. Investors may track how pricing, commodity and tariff costs, and execution in salty snacks and international markets influence margins versus this outlook over subsequent quarters.
Key Terms
non-gaap financial
effective tax rate financial
constant currency financial
AI-generated analysis. Not financial advice.
"We kicked off the year strong and are on track to hit our financial targets for 2026.
First-Quarter 2026 Financial Results Summary1
- Consolidated net sales of
$3,104.2 million 10.6% . - Organic, constant currency net sales increased
7.9% . - Reported net income of
$435.1 million $2.13 93.6% . - Adjusted earnings per share-diluted of
$2.35 12.4% .
1 All comparisons for the first quarter of 2026 are with respect to the first quarter ended March 30, 2025 | |||||||||
2026 Full-Year Financial Outlook
The Company is reaffirming its net sales growth, organic net sales growth, reported earnings per share and adjusted earnings per share outlook for the year.
2026 Full-Year Outlook | Guidance | |
Net sales growth* | ||
Organic net sales growth | ||
Reported earnings per share growth | ||
Adjusted earnings per share growth | ||
*Reflects an approximate 150 basis point benefit from the 2025 acquisition of LesserEvil | ||
The Company also expects:
- A reported and adjusted effective tax rate in the range of approximately
25% to27% ; - Other expense, which primarily reflects periodic benefit costs relating to pension and other post-retirement benefit plans, of approximately
$15 million $20 million - Interest expense of approximately
$200 million $210 million - Capital expenditures in the range of approximately
$425 million $475 million - Advancing Agility & Automation Initiative savings of approximately
$100 million
Below is a reconciliation of current projected 2026 and full-year 2025 earnings per share-diluted calculated in accordance with
2026 (Projected) | 2025 | ||
Reported EPS – Diluted | |||
Derivative Mark-to-Market Losses | — | ||
Business Realignment Activities | 0.30 - 0.35 | ||
Acquisition and Integration-Related Activities | 0.15 - 0.20 | ||
Long-Lived Asset Impairment Charges | — | ||
Tax Effect of All Adjustments Reflected Above | |||
Adjusted EPS – Diluted |
Adjusted 2026 projected earnings per share-diluted, as presented above, does not include the impact of mark-to-market gains and losses on our commodity derivative contracts that are reflected within corporate unallocated expense in segment results until the related inventory is sold since we are not able to forecast the impact of the market changes.
First-Quarter 2026 Components of Net Sales Growth
A reconciliation between reported net sales growth rates and organic, constant currency net sales growth rates, along with the contribution from net price realization and volume, is provided below:
Three Months Ended March 29, 2026 | |||||||||||||
Percentage Change as Reported | Impact of Foreign Currency Exchange | Percentage Change on Constant Currency Basis | Impact of Acquisition | Percentage Change on Organic Constant Currency Basis | Organic Price (Rounded)* | Organic Volume/Mix (Rounded)* | |||||||
North America Confectionery | 8.3 % | 0.3 % | 8.0 % | — % | 8.0 % | 12 % | (4) % | ||||||
North America Salty Snacks | 26.0 % | — % | 26.0 % | 20.4 % | 5.6 % | — % | 5 % | ||||||
International | 16.1 % | 6.8 % | 9.3 % | — % | 9.3 % | 12 % | (2) % | ||||||
Total Company | 10.6 % | 0.7 % | 9.9 % | 2.0 % | 7.9 % | 10 % | (2) % | ||||||
*Percentage changes may not compute directly as shown due to rounding of amounts presented above. | |||||||||||||
The Company presents certain percentage changes in net sales on a constant currency basis, which excludes the impact of foreign currency exchange. To present this information for historical periods, current period net sales for entities reporting in currencies other than the
First-Quarter 2026 Consolidated Results
Consolidated net sales increased
Reported gross margin was
Selling, marketing and administrative expenses increased
First quarter 2026 reported operating profit was
The reported effective tax rate in the first quarter of 2026 was
The Company's first-quarter 2026 results, as prepared in accordance with GAAP, included items positively impacting comparability of
The following table presents a summary of items impacting comparability in each period (see Appendix I for additional information):
Pre-Tax (millions) | Earnings Per Share-Diluted | ||||||
Three Months Ended | Three Months Ended | ||||||
March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||
Derivative Mark-to-Market Losses | $ 30.2 | $ 211.5 | $ 0.15 | $ 1.04 | |||
Business Realignment Activities | 13.4 | 25.9 | 0.07 | 0.12 | |||
Acquisition and Integration-Related Activities | 2.3 | 1.6 | 0.01 | 0.01 | |||
Tax Effect of All Adjustments Reflected Above | — | — | (0.01) | (0.18) | |||
$ 45.8 | $ 238.9 | $ 0.22 | $ 0.99 | ||||
Totals may not compute directly as shown due to rounding of amounts presented above. | |||||||
The following are comments about segment performance for the first quarter of 2026 versus the prior year period. See the schedule of supplementary information within this press release for additional information on segment net sales and profit.
North America Confectionery
The North America Confectionery segment reported segment income of
North America Salty Snacks
North America Salty Snacks segment income was
International
First quarter 2026 net sales for
International segment income was
Unallocated Corporate Expense
Live Webcast
At approximately 7:00 a.m. (Eastern time) today,
Note: In this release, for the first quarter of 2026,
Reconciliation of Certain Non-GAAP Financial Measures | |||
Consolidated results | Three Months Ended | ||
In thousands except per share data | March 29, 2026 | March 30, 2025 | |
Reported gross profit | $ 1,222,731 | $ 944,267 | |
Derivative mark-to-market losses | 30,184 | 211,453 | |
Non-GAAP gross profit | $ 1,252,915 | $ 1,155,720 | |
Reported operating profit | $ 640,693 | $ 369,221 | |
Derivative mark-to-market losses | 30,184 | 211,453 | |
Business realignment activities | 13,358 | 25,854 | |
Acquisition and integration-related activities | 2,261 | 1,585 | |
Non-GAAP operating profit | $ 686,496 | $ 608,113 | |
Reported provision for income taxes | $ 157,590 | $ 99,451 | |
Derivative mark-to-market (gains) losses* | (1,817) | 31,129 | |
Business realignment activities* | 3,308 | 6,179 | |
Acquisition and integration-related activities* | 549 | 378 | |
Non-GAAP provision for income taxes | $ 159,630 | $ 137,137 | |
Reported net income | $ 435,105 | $ 224,203 | |
Derivative mark-to-market losses | 32,001 | 180,324 | |
Business realignment activities | 10,050 | 19,675 | |
Acquisition and integration-related activities | 1,712 | 1,207 | |
Non-GAAP net income | $ 478,868 | $ 425,409 | |
Reported EPS - Diluted | $ 2.13 | $ 1.10 | |
Derivative mark-to-market gains | 0.15 | 1.04 | |
Business realignment activities | 0.07 | 0.12 | |
Acquisition and integration-related activities | 0.01 | 0.01 | |
Tax effect of all adjustments reflected above** | (0.01) | (0.18) | |
Non-GAAP EPS - Diluted | $ 2.35 | $ 2.09 | |
* The tax effect for each adjustment is determined by calculating the tax impact of the adjustment on the Company's quarterly effective tax rate, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. |
** Adjustments reported above are reported on a pre-tax basis before the tax effect described in the reconciliation above for non-GAAP provision for income taxes. |
In the assessment of our results, we review and discuss the following financial metrics that are derived from the reported and non-GAAP financial measures presented above:
Three Months Ended | |||
March 29, 2026 | March 30, 2025 | ||
As reported gross margin | 39.4 % | 33.7 % | |
Non-GAAP gross margin (1) | 40.4 % | 41.2 % | |
As reported operating profit margin | 20.6 % | 13.2 % | |
Non-GAAP operating profit margin (2) | 22.1 % | 21.7 % | |
As reported effective tax rate | 26.6 % | 30.7 % | |
Non-GAAP effective tax rate (3) | 25.0 % | 24.4 % | |
(1) | Calculated as non-GAAP gross profit as a percentage of net sales for each period presented. |
(2) | Calculated as non-GAAP operating profit as a percentage of net sales for each period presented. |
(3) | Calculated as non-GAAP provision for income taxes as a percentage of non-GAAP income before taxes (calculated as non-GAAP operating profit minus non-GAAP interest expense, net plus or minus non-GAAP other (income) expense, net). |
Appendix I
Details of the charges included in GAAP results, as summarized in the press release (above), are as follows:
Derivative mark-to-market (gains) losses: The mark-to-market (gains) losses on commodity derivatives are recorded as unallocated and excluded from adjusted results until such time as the related inventory is sold, at which time the corresponding (gains) losses are reclassified from unallocated to segment income. Since we often purchase commodity contracts to price inventory requirements in future years, we make this adjustment to facilitate the year-over-year comparison of cost of sales on a basis that matches the derivative gains and losses with the underlying economic exposure being hedged for the period.
Business realignment activities: We periodically undertake restructuring and cost reduction activities as part of ongoing efforts to enhance long-term profitability. During the first quarter of 2024, we commenced the Advancing Agility & Automation Initiative to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes, and generate long-term savings. During the first quarter of 2026 and 2025, business realignment charges related primarily to severance and employee benefit costs, as well as other third-party costs related to this program.
Acquisition and integration-related activities: During the first quarter of 2026, we incurred costs related to the integration of the acquisition of LesserEvil, LLC into our North America Salty Snacks segment, as well as costs related to the integration of the Sour Strips brand from Actual Candy, LLC into our North America Confectionery segment. During the first quarter of 2025, we incurred costs related to the acquisition of the Sour Strips brand from Actual Candy, LLC into our North America Confectionery segment.
Tax effect of all adjustments: This line item reflects the aggregate tax effect of all pre-tax adjustments reflected in the preceding line items of the applicable table. The tax effect for each adjustment is determined by calculating the tax impact of the adjustment on the Company's quarterly effective tax rate, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to our 2026 Full-year Financial Outlook and other statements regarding our business outlook and financial performance. Many of these forward-looking statements can be identified by the use of words such as "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would," among others. These statements are made based upon current expectations that are subject to risk and uncertainty. Because actual results may differ materially from those contained in the forward-looking statements, you should not place undue reliance on the forward-looking statements when deciding whether to buy, sell or hold the Company's securities. Factors that could cause results to differ materially include, but are not limited to: disruptions or inefficiencies in our supply chain due to the loss or disruption of essential manufacturing or supply elements or other factors; issues, concerns or regulatory changes related to the quality and safety of our products, ingredients or packaging, human and workplace rights, and other environmental, social or governance matters; changes in raw material and other costs, along with the availability of adequate supplies of raw materials and the Company's ability to successfully hedge against volatility in raw material pricing; the Company's ability to successfully execute business continuity plans to address changes in consumer preferences and the broader economic and operating environment; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; failure to successfully execute and integrate acquisitions, divestitures and joint ventures; changes in governmental laws, regulations and policies, including taxes and tariffs; political, economic, and/or financial market conditions, including with respect to inflation, rising interest rates, slower growth or recession, evolving priorities of the
The Hershey Company | |||||||
Consolidated Statements of Income | |||||||
for the periods ended March 29, 2026 and March 30, 2025 | |||||||
(unaudited) (in thousands except percentages and per share amounts) | |||||||
Three Months Ended | |||||||
March 29, 2026 | March 30, 2025 | ||||||
Net sales | $ 3,104,167 | $ 2,805,419 | |||||
Cost of sales | 1,881,436 | 1,861,152 | |||||
Gross profit | 1,222,731 | 944,267 | |||||
Selling, marketing and administrative expense | 576,040 | 558,672 | |||||
Business realignment costs | 5,998 | 16,374 | |||||
Operating profit | 640,693 | 369,221 | |||||
Interest expense, net | 49,818 | 44,622 | |||||
Other (income) expense, net | (1,820) | 945 | |||||
Income before income taxes | 592,695 | 323,654 | |||||
Provision for income taxes | 157,590 | 99,451 | |||||
Net income | $ 435,105 | $ 224,203 | |||||
Net income per share | - Basic | - Common | $ 2.19 | $ 1.14 | |||
- Diluted | - Common | $ 2.13 | $ 1.10 | ||||
- Basic | - Class B | $ 1.99 | $ 1.03 | ||||
Shares outstanding | - Basic | - Common | 148,606 | 148,097 | |||
- Diluted | - Common | 203,931 | 203,141 | ||||
- Basic | - Class B | 54,614 | 54,614 | ||||
Key margins: | |||||||
Gross margin | 39.4 % | 33.7 % | |||||
Operating profit margin | 20.6 % | 13.2 % | |||||
Net margin | 14.0 % | 8.0 % | |||||
The Hershey Company | |||||||
Supplementary Information – Segment Results | |||||||
for the periods ended March 29, 2026 and March 30, 2025 | |||||||
(unaudited) (in thousands except percentages) | |||||||
Three Months Ended | |||||||
March 29, 2026 | March 30, 2025 | % Change | |||||
Net sales: | |||||||
North America Confectionery | $ 2,489,918 | $ 2,300,140 | 8.3 % | ||||
North America Salty Snacks | 350,070 | 277,798 | 26.0 % | ||||
International | 264,179 | 227,481 | 16.1 % | ||||
Total | $ 3,104,167 | $ 2,805,419 | 10.6 % | ||||
Segment income: | |||||||
North America Confectionery | $ 792,378 | $ 696,374 | 13.8 % | ||||
North America Salty Snacks | 34,300 | 41,853 | (18.1) % | ||||
International | 15,263 | 28,726 | (46.8) % | ||||
Total segment income | 841,941 | 766,953 | 9.8 % | ||||
Unallocated corporate expense (1) | 155,445 | 158,840 | (2.1) % | ||||
Unallocated mark-to-market losses on commodity derivatives (2) | 30,184 | 211,453 | (85.7) % | ||||
Costs associated with business realignment initiatives | 13,358 | 25,854 | (48.3) % | ||||
Acquisition and integration-related activities | 2,261 | 1,585 | 42.6 % | ||||
Operating profit | 640,693 | 369,221 | 73.5 % | ||||
Interest expense, net | 49,818 | 44,622 | 11.6 % | ||||
Other (income) expense, net | (1,820) | 945 | NM | ||||
Income before income taxes | $ 592,695 | $ 323,654 | 83.1 % | ||||
(1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense and (d) other gains or losses that are not integral to segment performance. |
(2) Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains). |
NM - not meaningful |
Three Months Ended | |||||
March 29, 2026 | March 30, 2025 | ||||
Segment income as a percent of net sales: | |||||
North America Confectionery | 31.8 % | 30.3 % | |||
North America Salty Snacks | 9.8 % | 15.1 % | |||
International | 5.8 % | 12.6 % | |||
The Hershey Company | |||
Consolidated Balance Sheets | |||
as of March 29, 2026 and December 31, 2025 | |||
(in thousands of dollars) | |||
Assets | March 29, 2026 | December 31, 2025 | |
(unaudited) | |||
Cash and cash equivalents | $ 876,976 | $ 925,859 | |
Accounts receivable - trade, net | 974,555 | 729,547 | |
Inventories | 1,429,124 | 1,429,254 | |
Prepaid expenses and other | 487,856 | 504,239 | |
Total current assets | 3,768,511 | 3,588,899 | |
Property, plant and equipment, net | 3,489,162 | 3,529,608 | |
Goodwill | 2,994,696 | 2,996,005 | |
Other intangibles | 2,450,391 | 2,475,698 | |
Other non-current assets | 1,111,645 | 1,123,285 | |
Deferred income taxes | 26,888 | 27,802 | |
Total assets | $ 13,841,293 | $ 13,741,297 | |
Liabilities and Stockholders' Equity | |||
Accounts payable | $ 1,303,703 | $ 1,255,701 | |
Accrued liabilities | 926,173 | 970,597 | |
Accrued income taxes | 136,359 | 63,725 | |
Short-term debt | 169,455 | 218,546 | |
Current portion of long-term debt | 504,081 | 503,327 | |
Total current liabilities | 3,039,771 | 3,011,896 | |
Long-term debt | 4,684,363 | 4,681,194 | |
Other long-term liabilities | 676,847 | 731,917 | |
Deferred income taxes | 706,464 | 679,540 | |
Total liabilities | 9,107,445 | 9,104,547 | |
Total stockholders' equity | 4,733,848 | 4,636,750 | |
Total liabilities and stockholders' equity | $ 13,841,293 | $ 13,741,297 | |
View original content to download multimedia:https://www.prnewswire.com/news-releases/hershey-reports-first-quarter-2026-financial-results-302757665.html
SOURCE The Hershey Company