Hershey Reports Third-Quarter 2026 Financial Results

Higher margins and earnings accompanied lower organic volume/mix and weaker profitability in salty snacks and International.

Rhea-AI Summary

Hershey (NYSE: HSY) reported third-quarter 2026 net sales of $3,275.5 million and raised its full-year earnings growth outlook. Sales increased 3.0% year over year, while organic sales excluding currency effects rose 0.8%. Net income was $580.8 million, and diluted earnings per share rose 111.8% to $2.88. Adjusted diluted earnings rose 103.1% to $2.64.

Reported gross margin increased to 46.1% from 32.6%, supported by pricing, derivative gains, savings and tariff refunds. Organic volume/mix fell 10%. North America Salty Snacks sales increased 22.3%, largely reflecting LesserEvil, but segment income fell 17.9%. International sales declined 7.5%, with a $30.0 million segment loss. Hershey now expects full-year adjusted earnings growth of 36% to 38.5%, versus 32.5% to 35% previously, while organic sales growth guidance moved to approximately 3% from 3% to 3.5%.

26 points · 1 major

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1 major · 16 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.Full-year adjusted EPS growth guidance increased to 36%–38.5% from 32.5%–35%, implying projected EPS of $8.58–$8.74.
• Moderate pointThird-quarter net sales rose 3.0% to $3,275.5 million year over year.
• Moderate pointThird-quarter organic sales excluding currency effects increased 0.8%, with organic pricing up 11%.
• Moderate pointThird-quarter diluted EPS rose 111.8% to $2.88; net income was $580.8 million.
• Moderate pointReported gross margin increased 1,350 basis points to 46.1% in the third quarter.
• Moderate pointReported operating profit rose 88.1% to $817.7 million; margin increased 1,130 basis points to 25.0%.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Full-year sales growth guidance moved to approximately 5% from 4.5%–5%.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Hershey expects automation initiative savings of approximately $100 million in 2026.
• Moderate pointNorth America Confectionery quarterly sales increased 1.6% to $2,656.5 million, matching organic constant-currency growth.
• Moderate pointNorth America Confectionery quarterly income rose 66.2% to $949.7 million; margin increased 1,400 basis points to 35.8%.
• Moderate pointHershey's U.S. candy, mint and gum retail takeaway rose 0.8% over the 12 weeks ended September 27, 2026.
• Moderate pointNorth America Salty Snacks quarterly sales rose 22.3% to $392.7 million; LesserEvil contributed approximately 20 percentage points.
• Moderate pointNorth America Salty Snacks quarterly organic constant-currency sales rose 2.3%, with approximately one point of volume growth.
• Moderate pointU.S. salty snacks retail takeaway excluding LesserEvil rose 4.0% over 12 weeks, with market-share gains.

12 minor points

• Minor pointThird-quarter adjusted diluted EPS increased 103.1% to $2.64 year over year.
• Minor pointAdjusted gross margin increased 1,090 basis points to 42.7% in the third quarter.
• Minor pointAdjusted operating profit rose 78.5% to $754.0 million; margin increased 970 basis points to 23.0%.
• Minor pointThird-quarter reported tax rate fell 130 basis points to 24.4%; adjusted rate fell 230 basis points.
• Minor pointNine-month sales rose 6.6% to $9,167.0 million; organic sales excluding currency effects increased 4.0%.
• Minor pointNine-month diluted EPS rose 162.5% to $7.27; net income was $1,473.6 million.
• Minor pointNine-month adjusted diluted EPS increased 49.1% to $6.89 year over year.
• Minor point. Forward-looking: it has not happened yet and may not happen.Full-year reported EPS growth guidance increased to 84%–90% from 82%–89%, implying projected EPS of $8.00–$8.26.
• Minor pointLesserEvil contributed 2.1 percentage points to third-quarter consolidated sales growth.
• Minor pointNine-month organic constant-currency sales rose 4.5% in confectionery, 2.7% in salty snacks and 0.3% internationally.
• Minor pointQuarterly derivative mark-to-market gains were $113.4 million, versus $24.3 million a year earlier.
• Minor pointNine-month business realignment costs fell to $35.0 million from $51.6 million a year earlier.

Negative

• Major point. Forward-looking: it has not happened yet and may not happen.Full-year organic sales growth guidance moved to approximately 3% from 3%–3.5%.
• Moderate pointThird-quarter organic volume/mix declined 10%; nine-month organic volume/mix declined 7%.
• Moderate pointNorth America Confectionery quarterly volume declined approximately 11 points, reflecting price elasticity and shipment variability.
• Moderate pointNorth America Salty Snacks quarterly income fell 17.9% to $47.4 million; margin declined 590 basis points to 12.1%.
• Moderate pointInternational quarterly sales fell 7.5% to $226.4 million; organic constant-currency sales declined 9.7%.
• Moderate pointThird-quarter selling, marketing and administrative expenses increased 15.4% year over year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Hershey expects 2026 interest expense of approximately $200 million.

9 minor points

• Minor pointHershey's U.S. candy, mint and gum share declined year over year over 12 weeks ended September 27, 2026.
• Minor pointPlanned reductions in private-label sales held salty snacks organic growth below retail takeaway growth.
• Minor pointInternational quarterly volume decreased approximately 14%, reflecting shipment timing, portfolio reductions and price elasticity.
• Minor pointInternational recorded a quarterly $30.0 million loss; margin fell 770 basis points to negative 13.3%.
• Minor pointQuarterly acquisition and integration costs rose to $36.4 million from $1.6 million a year earlier.
• Minor pointQuarterly business realignment costs increased to $13.3 million from $10.6 million a year earlier.
• Minor pointNine-month acquisition and integration costs increased to $54.1 million from $5.0 million a year earlier.
• Minor point. Forward-looking: it has not happened yet and may not happen.Hershey expects 2026 other expense of approximately $5 million to $10 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.Hershey expects 2026 capital expenditures of approximately $450 million.

News Explained

The adjusted EPS growth forecast includes refunds already received—0.22 dollars per share in Q3 and 0.03 dollars per share in Q2—but excludes possible future refunds.

The company updated its 2026 outlook: net sales growth is approximately 5% (prior range 4.5% to 5%), and reported EPS growth is 84% to 90% (prior range 82% to 89%).

Key Figures

Net sales: $3,275.5 million; +3.0% Organic constant-currency sales: +0.8% Reported net income: $580.8 million; +111.8% +4 more

Net sales

$3,275.5 million; +3.0%

Q3 2026

Organic constant-currency sales

+0.8%

Q3 2026

Reported net income

$580.8 million; +111.8%

Q3 2026

Adjusted diluted EPS

$2.64; +103.1%

Q3 2026

Reported gross margin

46.1%; +1,350 basis points

Q3 2026 versus Q3 2025

Adjusted gross margin

42.7%; +1,090 basis points

Q3 2026 versus Q3 2025

Adjusted EPS growth outlook

36%–38.5%; prior guidance 32.5%–35%

2026 full year

Previous Earnings Reports

1 past event · Latest: Jul 30

Same Type 1 event

1. Jul 30

   Q2 earnings

   24h Move

   -3.6%

   Raised 2026 adjusted EPS growth outlook to 32.5%–35%; this report updates that guidance.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

constant currency, gaap, non-gaap, mark-to-market

4 terms

constant currency financial

"Organic, constant currency net sales increased 0.8%."

Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.

gaap financial

"The Company's third-quarter 2026 results, as prepared in accordance with GAAP"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"The Company refers to these income measures as "adjusted" or "non-GAAP""

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

mark-to-market financial

"The difference between reported and adjusted gross margin primarily reflects derivative mark-to-market gains."

"Mark-to-market" is a method of valuing assets or investments based on their current market price, rather than their original cost or value. It helps investors see the most up-to-date worth of their holdings, much like checking the latest price of a stock before deciding to buy or sell. This approach ensures that financial statements reflect real-time value, providing a clearer picture of overall financial health.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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HERSHEY, Pa., Oct. 29, 2026 /PRNewswire/ -- The Hershey Company (NYSE: HSY) today announced net sales and earnings for the third quarter ended September 27, 2026 and updated its 2026 sales and earnings outlook.

"Our third-quarter results show steady progress on our 2026 priorities," said Kirk Tanner, The Hershey Company President and Chief Executive Officer. "Our second-half demand creation initiatives are gaining momentum, even as consumers grow more cautious. We remain on track to deliver solid sales growth, a meaningful recovery in margin and earnings, and disciplined investment to fuel our next chapter of growth."

Third-Quarter 2026 Financial Results Summary¹

• Consolidated net sales of $3,275.5 million, an increase of 3.0%.
• Organic, constant currency net sales increased 0.8%.
• Reported net income of $580.8 million, or $2.88 per share-diluted, an increase of 111.8%.
• Adjusted earnings per share-diluted of $2.64, an increase of 103.1%.

Nine Months Ended 2026 Financial Results Summary²

• Consolidated net sales of $9,167.0 million, an increase of 6.6%.
• Organic, constant currency net sales increased 4.0%.
• Reported net income of $1,473.6 million, or $7.27 per share-diluted, an increase of 162.5%.
• Adjusted earnings per share-diluted of $6.89, an increase of 49.1%.

1 All comparisons for the third quarter of 2026 are with respect to the third quarter ended September 28, 2025 2 All comparisons for the nine months ended 2026 are with respect to the nine months ended September 28, 2025

2026 Full-Year Financial Outlook
The Company is updating its net sales growth, organic net sales growth, reported earnings per share and adjusted earnings per share outlook for the year. This outlook does not include potential future tariff refunds.

2026 Full-Year Outlook	Prior Guidance	Current Guidance
Net sales growth*	4.5% to 5%	~5%
Organic net sales growth	3% to 3.5%	~3%
Reported earnings per share growth	82% to 89%	84% to 90%
Adjusted earnings per share growth**	32.5% to 35%	36% to 38.5%

*Reflects an approximately 200 basis point benefit from the 2025 acquisition of LesserEvil. Additionally, the impact of foreign currency exchange rates is anticipated to be a slight benefit to net sales growth for the full year 2026. **Includes approximately $0.22 from tariff refunds received in Q3 2026, and $0.03 in Q2 2026.

The Company also expects:

• A reported and adjusted effective tax rate of approximately 25%;
• Other expense, which primarily reflects periodic benefit costs relating to pension and other post-retirement benefit plans, of approximately $5 million to $10 million;
• Interest expense of approximately $200 million;
• Capital expenditures of approximately $450 million; and
• 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 U.S. generally accepted accounting principles (GAAP) to non-GAAP adjusted earnings per share-diluted:

	2026 (Projected)		2025
Reported EPS – Diluted	$8.00 - $8.26		$4.34
Derivative Mark-to-Market Losses	—		$2.08
Business Realignment Activities	0.30 - 0.35		$0.29
Acquisition and Integration-Related Activities	0.35 - 0.40		$0.20
Long-Lived Asset Impairment Charges	—		$0.03
Tax Effect of All Adjustments Reflected Above	$(0.17)		$(0.63)
Adjusted EPS – Diluted	$8.58 - $8.74		$6.31

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.

Third-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 September 27, 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	1.6 %		— %		1.6 %		— %		1.6 %		13 %		(11) %
North America Salty Snacks	22.3 %		— %		22.3 %		20.0 %		2.3 %		1 %		1 %
International	(7.5) %		2.2 %		(9.7) %		— %		(9.7) %		4 %		(14) %
Total Company	3.0 %		0.1 %		2.9 %		2.1 %		0.8 %		11 %		(10) %

*Percentage changes may not compute directly as shown due to rounding of amounts presented above.

	Nine Months Ended September 27, 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	4.6 %		0.1 %		4.5 %		— %		4.5 %		13 %		(8) %
North America Salty Snacks	23.7 %		— %		23.7 %		21.0 %		2.7 %		(1) %		3 %
International	4.4 %		4.1 %		0.3 %		— %		0.3 %		8 %		(8) %
Total Company	6.6 %		0.4 %		6.2 %		2.2 %		4.0 %		11 %		(7) %

*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 U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rates in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in the average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

Third-Quarter 2026 Consolidated Results
Consolidated net sales increased 3.0% to $3,275.5 million in the third quarter of 2026. Organic, constant currency net sales increased 0.8%, driven by net price realization of approximately 11 points. Volume declined approximately 10 points reflecting elasticity impacts in North America Confectionery and International, shipment timing and planned portfolio optimization in International, partially offset by growth in North America Salty Snacks. The impact of the LesserEvil acquisition was a 2.1 point benefit, while the foreign exchange benefit was 0.1 points in the third quarter.

Reported gross margin was 46.1% in the third quarter of 2026, compared to 32.6% in the third quarter of 2025, an increase of 1,350 basis points. The reported gross margin increase was driven by net price realization, derivative mark-to-market gains, productivity program savings, tariff refunds and lower net commodity costs, which more than offset lower volume and higher freight and logistics expenses. Adjusted gross margin was 42.7% in the third quarter of 2026, an increase of 1,090 basis points compared to the third quarter of 2025. The difference between reported and adjusted gross margin primarily reflects derivative mark-to-market gains.

Selling, marketing and administrative expenses increased 15.4% in the third quarter of 2026 versus the third quarter of 2025. Selling, marketing and administrative expenses, excluding advertising and related consumer marketing, increased 14.5% versus the third quarter of 2025, driven by higher capability and technology investments. Advertising and related consumer marketing expenses increased 17.1% in the third quarter of 2026 versus the same period last year, reflecting double-digit increases in North America Confectionery and North America Salty Snacks.

Third quarter 2026 reported operating profit was $817.7 million, an increase of 88.1% versus the third quarter of 2025, resulting in a reported operating profit margin of 25.0%, an increase of 1,130 basis points versus the prior year period. Adjusted operating profit of $754.0 million increased 78.5% versus the third quarter of 2025. Adjusted operating profit margin of 23.0% increased 970 basis points versus the third quarter of 2025. The reported operating profit margin increase reflects favorable derivative mark-to-market gains. Reported and adjusted operating profit margin increases reflect net price realization, productivity program savings, tariff refunds and lower net commodity costs, which more than offset lower volume, higher freight and logistic expenses, and increased advertising and related consumer marketing and capability and technology investments.

The reported effective tax rate in the third quarter of 2026 was 24.4%, a decrease of 130 basis points versus the third quarter of 2025. The reported effective tax rate decrease was driven by the impact of commodity hedges on foreign rate differentials. The adjusted effective tax rate was 24.4%, a decrease of 230 basis points versus the third quarter of 2025. The reported and adjusted effective tax rate for the third quarter of 2026 reflects higher pretax income, which reduced the impact of certain fixed tax items as a percentage of earnings, as well as foreign rate differentials.

The Company's third-quarter 2026 results, as prepared in accordance with GAAP, included items negatively impacting comparability of $63.7 million, or $0.24 per share-diluted. For the third quarter of 2025, items negatively impacting comparability totaled $12.1 million, or $0.06 per share-diluted.

The following table presents a summary of items impacting comparability in each of the third quarter and nine-months ended 2026 and 2025 periods (see Appendix I for additional information):

	Pre-Tax (millions)				Earnings Per Share-Diluted
	Three Months Ended				Three Months Ended
	September 27, 2026		September 28, 2025		September 27, 2026		September 28, 2025
Derivative Mark-to-Market Gains	$         (113.4)		$           (24.3)		$           (0.56)		$           (0.12)
Business Realignment Activities	13.3		10.6		0.07		0.05
Acquisition and Integration-Related Activities	36.4		1.6		0.18		0.01
Tax Effect of All Adjustments Reflected Above	—		—		0.07		—
	$           (63.7)		$           (12.1)		$           (0.24)		$           (0.06)

Totals may not compute directly as shown due to rounding of amounts presented above.

	Pre-Tax (millions)				Earnings Per Share-Diluted
	Nine Months Ended				Nine Months Ended
	September 27, 2026		September 28, 2025		September 27, 2026		September 28, 2025
Derivative Mark-to-Market (Gains) Losses	$         (186.1)		$          387.9		$           (0.92)		$            1.92
Business Realignment Activities	35.0		51.6		0.17		0.25
Acquisition and Integration-Related Activities	54.1		5.0		0.27		0.03
Tax Effect of All Adjustments Reflected Above	—		—		0.10		(0.35)
	$           (97.0)		$          444.5		$           (0.38)		$            1.85

Totals may not compute directly as shown due to rounding of amounts presented above.

The following are comments about segment performance for the third 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
Hershey's North America Confectionery segment net sales were $2,656.5 million in the third quarter of 2026, an increase of 1.6% versus the same period last year. Organic, constant currency net sales increased 1.6%, driven by approximately 13 points of net price realization. Volume declined approximately 11 points reflecting price elasticity and normal quarter-to-quarter shipment variability, which more than offset strong seasonal shipments.

Hershey's U.S. candy, mint and gum (CMG) retail takeaway for the 12-week period ended September 27, 2026 in the multi-outlet plus convenience store channels (MULO+ w/ Convenience) increased 0.8%, reflecting the comparison against a significant Reese innovation launch in the prior year. As a result, Hershey's CMG share declined year over year for this period.

The North America Confectionery segment reported segment income of $949.7 million in the third quarter of 2026, an increase of 66.2% versus the prior year period, resulting in a segment margin of 35.8% in the quarter, an increase of 1,400 basis points. The segment income and segment margin increases were driven by net price realization, productivity program savings, tariff refunds, lower net commodity costs, partially offset by lower volumes and increased advertising and related consumer marketing investments

North America Salty Snacks
Hershey's North America Salty Snacks segment net sales were $392.7 million in the third quarter of 2026, an increase of 22.3% versus the same period last year. The acquisition of LesserEvil contributed approximately 20 percentage points to segment growth in the third quarter of 2026. Organic, constant currency net sales increased 2.3%. Volume increased approximately 1 points, reflecting demand growth and retailer inventory replenishment, partly offset by planned reduction in private label production. Net price realization was an approximate 1 point benefit.

Hershey's U.S. salty snacks retail takeaway for the 12-week period ended September 27, 2026 in MULO+ w/ Convenience, excluding LesserEvil, increased 4.0% versus the prior year period. This led to further gains in salty snack market share. Organic, constant currency net sales trailed retail takeaway due to the planned reduction of sales to private label customers.

North America Salty Snacks segment income was $47.4 million in the third quarter of 2026, a decrease of 17.9% versus the third quarter of 2025, driven by higher freight, logistics, and manufacturing costs, increased net commodity costs and higher consumer marketing investments. This resulted in a segment margin of 12.1%, a decrease of 590 basis points versus the prior year period.

International
Third quarter 2026 net sales for Hershey's International segment decreased 7.5% versus the same period last year to $226.4 million. Organic, constant currency net sales decreased 9.7%. Price realization was approximately 4 points, driven by strategic pricing actions across key markets. Volume decreased approximately 14%, driven by quarterly shipment timing, planned portfolio rationalization in select markets and the impact of price elasticity.

International segment loss was $30.0 million in the third quarter of 2026, a decrease of $16.4 million versus the prior year period as higher input and manufacturing costs, and lower volumes were partially offset by net price realization, productivity program savings, and favorable mix. This resulted in a segment margin of (13.3)%, a decrease of 770 basis points versus the prior year period.

Unallocated Corporate Expense
Hershey's unallocated corporate expense in the third quarter of 2026 was $213.1 million, an increase of $20.0 million, or 10.3%, versus the same period of 2025. The year-over-year increase was primarily driven by continued investments in capabilities and technology.

Live Webcast
At approximately 7:00 a.m. (Eastern time) today, Hershey will post a pre-recorded management discussion of its third-quarter 2026 results and business update to its website at www.thehersheycompany.com/investors. In addition, at 8:30 a.m. (Eastern time) today, the Company will host a live question and answer session with investors and financial analysts. Details to access this call are available on the Company's website.

Note: In this release, for the third quarter of 2026, Hershey references income measures that are not in accordance with GAAP because they exclude certain items impacting comparability, including gains and losses associated with mark-to-market commodity derivatives, business realignment activities and acquisition and integration-related activities. The Company refers to these income measures as "adjusted" or "non-GAAP" financial measures throughout this release. These non-GAAP financial measures are used in evaluating results of operations for internal purposes and are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations. A reconciliation of the non-GAAP financial measures referenced in this release to their nearest comparable GAAP financial measures as presented in the Consolidated Statements of Income is provided below.

Reconciliation of Certain Non-GAAP Financial Measures
Consolidated results	Three Months Ended				Nine Months Ended
In thousands except per share data	September 27, 2026		September 28, 2025		September 27, 2026		September 28, 2025
Reported gross profit	$      1,511,027		$      1,037,334		$      3,997,066		$      2,777,874
Derivative mark-to-market (gains) losses	(113,352)		(24,250)		(186,075)		387,932
Business realignment activities	283		—		283		—
Non-GAAP gross profit	$      1,397,958		$      1,013,084		$      3,811,274		$      3,165,806
Reported operating profit	$         817,653		$         434,583		$      2,100,987		$        996,615
Derivative mark-to-market (gains) losses	(113,352)		(24,250)		(186,075)		387,932
Business realignment activities	13,268		10,577		34,987		51,568
Acquisition and integration-related activities	36,410		1,577		54,090		5,042
Non-GAAP operating profit	$         753,979		$        422,487		$      2,003,989		$      1,441,157
Reported provision for income taxes	$         187,189		$          95,590		$        475,394		$        281,434
Derivative mark-to-market (gains) losses*	(20,262)		(2,645)		(35,308)		58,241
Business realignment activities*	2,265		2,788		7,708		12,774
Acquisition and integration-related activities*	2,408		382		6,703		1,208
Non-GAAP provision for income taxes	$         171,600		$          96,115		$        454,497		$        353,657
Reported net income	$        580,814		$        276,320		$      1,473,584		$        563,242
Derivative mark-to-market (gains) losses	(93,091)		(21,605)		(150,767)		329,691
Business realignment activities	11,003		7,789		27,279		38,794
Acquisition and integration-related activities	34,002		1,195		47,387		3,834
Non-GAAP net income	$        532,728		$        263,699		$      1,397,483		$        935,561
Reported EPS - Diluted	$              2.88		$              1.36		$               7.27		$              2.77
Derivative mark-to-market (gains) losses	(0.56)		(0.12)		(0.92)		1.92
Business realignment activities	0.07		0.05		0.17		0.25
Acquisition and integration-related activities	0.18		0.01		0.27		0.03
Tax effect of all adjustments reflected above**	0.07		—		0.10		(0.35)
Non-GAAP EPS - Diluted	$             2.64		$              1.30		$              6.89		$             4.62

* 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				Nine Months Ended
	September 27, 2026		September 28, 2025		September 27, 2026		September 28, 2025
As reported gross margin	46.1 %		32.6 %		43.6 %		32.3 %
Non-GAAP gross margin (1)	42.7 %		31.8 %		41.6 %		36.8 %
As reported operating profit margin	25.0 %		13.7 %		22.9 %		11.6 %
Non-GAAP operating profit margin (2)	23.0 %		13.3 %		21.9 %		16.8 %
As reported effective tax rate	24.4 %		25.7 %		24.4 %		33.3 %
Non-GAAP effective tax rate (3)	24.4 %		26.7 %		24.5 %		27.4 %

(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 three- and nine-months ended 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 three- and nine-months ended 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, including contingent consideration remeasurement adjustments. During the three- and nine-months ended 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 effective tax rate for the period presented, 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 U.S. administration, and other events beyond our control such as the impacts on the business arising from international conflicts and geopolitical tensions; risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure and that of our customers and partners (including our suppliers); our ability to hire, engage and retain a talented global workforce, our ability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs; complications with the design, implementation or usage of our new enterprise resource planning system, including the ability to support post-implementation efforts and maintain enhancements, new features or modifications; and such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2025 and in our other filings with the U.S. Securities and Exchange Commission from time to time. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

The Hershey Company
Consolidated Statements of Income
for the periods ended September 27, 2026 and September 28, 2025
(unaudited) (in thousands except percentages and per share amounts)
				Three Months Ended				Nine Months Ended
				September 27, 2026		September 28, 2025		September 27, 2026		September 28, 2025
Net sales				$   3,275,510		$   3,181,418		$   9,166,983		$   8,601,555
Cost of sales				1,764,483		2,144,084		5,169,917		5,823,681
Gross profit				1,511,027		1,037,334		3,997,066		2,777,874
Selling, marketing and administrative expense				692,869		600,540		1,889,461		1,762,419
Business realignment costs				505		2,211		6,618		18,840
Operating profit				817,653		434,583		2,100,987		996,615
Interest expense, net				48,675		51,474		148,456		142,131
Other (income) expense, net				975		11,199		3,553		9,808
Income before income taxes				768,003		371,910		1,948,978		844,676
Provision for income taxes				187,189		95,590		475,394		281,434
Net income				$      580,814		$      276,320		$   1,473,584		$     563,242
Net income per share		- Basic	- Common	$            2.96		$            1.40		$            7.48		$           2.85
		- Diluted	- Common	$            2.88		$            1.36		$            7.27		$           2.77
		- Basic	- Class B	$            2.69		$            1.27		$            6.79		$           2.58
Shares outstanding		- Basic	- Common	146,541		148,363		147,495		148,234
		- Diluted	- Common	201,692		203,494		202,711		203,273
		- Basic	- Class B	54,614		54,614		54,614		54,614
Key margins:
Gross margin				46.1 %		32.6 %		43.6 %		32.3 %
Operating profit margin				25.0 %		13.7 %		22.9 %		11.6 %
Net margin				17.7 %		8.7 %		16.1 %		6.5 %

 

The Hershey Company
Supplementary Information – Segment Results
for the periods ended September 27, 2026 and September 28, 2025
(unaudited) (in thousands except percentages)
			Three Months Ended						Nine Months Ended
			September 27, 2026		September 28, 2025		% Change		September 27, 2026		September 28, 2025		% Change
Net sales:
North America Confectionery			$   2,656,461		$   2,615,600		1.6 %		$   7,319,949		$   7,001,208		4.6 %
North America Salty Snacks			392,683		321,020		22.3 %		1,130,598		914,337		23.7 %
International			226,366		244,798		(7.5) %		716,436		686,010		4.4 %
Total			$   3,275,510		$   3,181,418		3.0 %		$   9,166,983		$   8,601,555		6.6 %
Segment income (loss):
North America Confectionery			$      949,687		$      571,475		66.2 %		$   2,447,851		$   1,771,780		38.2 %
North America Salty Snacks			47,388		57,747		(17.9) %		144,268		166,080		(13.1) %
International			(30,008)		(13,607)		120.5 %		(19,894)		34,914		(157.0) %
Total segment income			967,067		615,615		57.1 %		2,572,225		1,972,774		30.4 %
Unallocated corporate expense (1)			213,088		193,128		10.3 %		568,236		531,617		6.9 %
Unallocated mark-to-market (gains) losses on commodity derivatives (2)			(113,352)		(24,250)		367.4 %		(186,075)		387,932		(148.0) %
Costs associated with business realignment initiatives			13,268		10,577		25.4 %		34,987		51,568		(32.2) %
Acquisition and integration-related activities			36,410		1,577		NM		54,090		5,042		NM
Operating profit			817,653		434,583		88.1 %		2,100,987		996,615		110.8 %
Interest expense, net			48,675		51,474		(5.4) %		148,456		142,131		4.5 %
Other (income) expense, net			975		11,199		(91.3) %		3,553		9,808		(63.8) %
Income before income taxes			$      768,003		$      371,910		106.5 %		$   1,948,978		$     844,676		130.7 %

(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				Nine Months Ended
			September 27, 2026		September 28, 2025		September 27, 2026		September 28, 2025
Segment income (loss) as a percent of net sales:
North America Confectionery			35.8 %		21.8 %		33.4 %		25.3 %
North America Salty Snacks			12.1 %		18.0 %		12.8 %		18.2 %
International			(13.3) %		(5.6) %		(2.8) %		5.1 %

 

The Hershey Company
Consolidated Balance Sheets
as of September 27, 2026 and December 31, 2025
(in thousands of dollars)
Assets	September 27, 2026		December 31, 2025
	(unaudited)
Cash and cash equivalents	$                 676,688		$                 925,859
Accounts receivable - trade, net	1,113,419		729,547
Inventories	1,608,756		1,429,254
Prepaid expenses and other	463,592		504,239
Total current assets	3,862,455		3,588,899
Property, plant and equipment, net	3,496,716		3,529,608
Goodwill	2,985,813		2,996,005
Other intangibles	2,422,394		2,475,698
Other non-current assets	1,098,092		1,123,285
Deferred income taxes	27,357		27,802
Total assets	$             13,892,827		$             13,741,297
Liabilities and Stockholders' Equity
Accounts payable	$               1,414,863		$              1,255,701
Accrued liabilities	1,049,633		970,597
Accrued income taxes	20,469		63,725
Short-term debt	436,012		218,546
Current portion of long-term debt	197,843		503,327
Total current liabilities	3,118,820		3,011,896
Long-term debt	4,492,634		4,681,194
Other long-term liabilities	626,345		731,917
Deferred income taxes	779,312		679,540
Total liabilities	9,017,111		9,104,547
Total stockholders' equity	4,875,716		4,636,750
Total liabilities and stockholders' equity	$             13,892,827		$             13,741,297

 

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SOURCE The Hershey Company

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Hershey's third-quarter 2026 sales and earnings?

Hershey reported sales of $3,275.5 million, up 3.0% year over year, and diluted earnings per share of $2.88, up 111.8%. Net income was $580.8 million. Adjusted diluted earnings per share increased 103.1% to $2.64 for the quarter ended September 27, 2026.

What is Hershey's updated 2026 earnings outlook?

Hershey expects reported diluted EPS of $8.00–$8.26 and adjusted diluted EPS of $8.58–$8.74 for 2026. Those ranges represent growth of 84%–90% and 36%–38.5%, respectively.

How do tariff refunds affect Hershey's 2026 guidance?

Hershey's adjusted EPS growth guidance includes approximately $0.22 from tariff refunds received in the third quarter and $0.03 in the second quarter of 2026. The full-year outlook excludes potential future tariff refunds.

What assumptions underpin Hershey's 2026 sales and tax outlook?

Hershey's full-year sales growth outlook reflects an approximately 200-basis-point benefit from the 2025 LesserEvil acquisition and an anticipated slight benefit from currency exchange rates. The company expects reported and adjusted effective tax rates of approximately 25%.

Does Hershey's projected adjusted 2026 EPS include future commodity derivative gains or losses?

Projected adjusted 2026 diluted EPS excludes mark-to-market gains and losses on commodity derivative contracts held in corporate unallocated expense until the related inventory is sold. Hershey cannot forecast the effect of market changes on those contracts.