Earnings surge at Hershey (NYSE: HSY) as 2026 outlook reaffirmed
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
The Hershey Company reported strong first-quarter 2026 results and reaffirmed its full-year 2026 outlook. Net sales rose to $3,104.2 million, up 10.6%, with organic, constant currency growth of 7.9% driven mainly by higher pricing.
Reported net income nearly doubled to $435.1 million, and diluted EPS climbed to $2.13, while non-GAAP diluted EPS increased 12.4% to $2.35. Reported gross margin improved to 39.4%, but adjusted gross margin edged down to 40.4% as higher commodity and tariff costs offset pricing benefits.
North America Confectionery sales grew 8.3% with a segment margin of 31.8%, and North America Salty Snacks sales rose 26.0%, helped by the LesserEvil acquisition, though its margin fell to 9.8%. International sales increased 16.1% but segment margin declined to 5.8% amid higher costs and advertising. For 2026, Hershey continues to expect net sales growth of 4%–5% and adjusted EPS growth of 30%–35%.
Positive
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Negative
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Insights
Hershey posts robust Q1 growth, strong EPS leverage and maintains ambitious 2026 guidance.
Hershey delivered $3,104.2M in Q1 2026 net sales, up 10.6%, with organic, constant currency growth of 7.9% driven mainly by pricing. Reported net income rose to $435.1M and diluted EPS to $2.13, while non-GAAP EPS reached $2.35, up 12.4%.
Margins were mixed: reported gross margin expanded 570 basis points to 39.4% helped by lower derivative mark-to-market losses and pricing, but non-GAAP gross margin slipped to 40.4% as commodity and tariff costs increased. North America Confectionery remained a profit engine with a 31.8% segment margin, while Salty Snacks and International saw margin compression despite double-digit sales growth.
The company reaffirmed 2026 outlook with net sales growth of 4%–5% and adjusted EPS growth of 30%–35%, implying continued earnings expansion versus 2025 adjusted EPS of $6.31. Management also highlighted expected capital expenditures of $425M–$475M and roughly $100M in Advancing Agility & Automation Initiative savings for 2026, underscoring ongoing investment and cost-efficiency efforts.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales: $3,104.2M
Organic constant-currency net sales growth: 7.9%
Reported net income: $435.1M
+5 more
8 metrics
Net sales
$3,104.2M
Q1 2026, up 10.6% year over year
Organic constant-currency net sales growth
7.9%
Q1 2026 vs Q1 2025
Reported net income
$435.1M
Q1 2026 consolidated results
Diluted EPS
$2.13
Q1 2026, reported, up 93.6% vs prior year
Non-GAAP diluted EPS
$2.35
Q1 2026, up 12.4% vs Q1 2025
Reported gross margin
39.4%
Q1 2026 vs 33.7% in Q1 2025
Non-GAAP gross margin
40.4%
Q1 2026, down 80 bps vs prior year
2026 adjusted EPS guidance
$8.20–$8.52
Projected 2026 non-GAAP EPS, 30–35% growth vs 2025
Key Terms
organic, constant currency net sales, derivative mark-to-market losses, business realignment activities, Acquisition and integration-related activities, +2 more
6 terms
organic, constant currency net sales financial
"Organic, constant currency net sales increased 7.9%, driven by net price realization"
A measure of revenue that shows how much a company’s existing business sold, after removing the effects of acquisitions, divestitures or one‑off changes and also stripping out gains or losses caused by foreign exchange rates. Think of it as comparing the same garden’s harvest from one season to the next without adding new plots or blaming different weather — it reveals the true underlying sales trend investors use to judge organic demand and operational performance.
derivative mark-to-market losses financial
"driven by net price realization, lower derivative mark-to-market losses versus the same period last year"
Losses recorded when a company revalues its derivative contracts—like options, swaps or futures—at current market prices instead of their original cost. Think of it as updating the value of an ongoing bet to today’s odds; if the market moved against the company, the updated value shows a loss. These reported losses matter to investors because they reduce reported earnings, can trigger cash collateral calls, and reveal how exposed the company is to price swings.
business realignment activities financial
"Business Realignment Activities | 13.4 | | | 25.9"
Business realignment activities are planned changes a company makes to how it operates—such as reorganizing teams, closing or selling divisions, shifting product focus, cutting costs or changing where it invests—intended to improve efficiency or adapt to new conditions. For investors, these moves matter because they can change future profits, cash flow and risk: like rearranging a house to make it more livable, the goal is better performance, but the short-term disruption and costs can affect share value.
Advancing Agility & Automation Initiative financial
"we commenced the Advancing Agility & Automation Initiative to improve supply chain"
non-GAAP EPS - Diluted financial
"Non-GAAP EPS - Diluted | $ | 2.35 | | | $ | 2.09"
Earnings Snapshot
Net sales: $3,104.2M · Guidance included
Q1 2026
Net sales
$3,104.2M
+10.6% YoY
Diluted EPS (reported)
$2.13
+93.6% YoY
Diluted EPS (adjusted)
$2.35
+12.4% YoY
Guidance
For 2026, Hershey expects net sales growth of 4%–5%, organic net sales growth of 2.5%–3.5%, reported EPS growth of 79%–89%, and adjusted EPS growth of 30%–35%.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
THE HERSHEY CO MPANY
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices)
(Zip Code)
(717 ) 534-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging Growth Company | ||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||
| Item 2.02. | Results of Operations and Financial Condition. | |||||||
On April 30, 2026, The Hershey Company (the “Company”) announced sales and earnings information for the first quarter ended March 29, 2026. A copy of the Company’s press release is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. | |||||||||||||
| (d) | Exhibits. | |||||||||||||
| Exhibit Number | Description | |||||||||||||
99.1 | The Hershey Company Press Release dated April 30, 2026 | |||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE HERSHEY COMPANY | ||||||||||||||
Date: April 30, 2026 | By: | /s/ Steven E. Voskuil | ||||||||||||
| Steven E. Voskuil Senior Vice President, Chief Financial Officer | ||||||||||||||
Exhibit 99.1
| FINANCIAL CONTACT: | MEDIA CONTACT: | |||||||||||||
| Anoori Naughton | Allison Kleinfelter | |||||||||||||
| anaughton@hersheys.com | akleinfelter@hersheys.com | |||||||||||||
Hershey Reports First-Quarter 2026 Financial Results
HERSHEY, Pa., April 30, 2026 - The Hershey Company (NYSE: HSY) today announced net sales and earnings for the first quarter ended March 29, 2026 and reaffirmed its 2026 sales and earnings outlook.
“We kicked off the year strong and are on track to hit our financial targets for 2026. Hershey’s and Reese's are key drivers, delivering first quarter non-seasonal retail sales lifts of 11% and 10%, respectively. We are laser-focused on fueling core growth and making bold moves in brand investment, innovation, R&D, technology, and talent to drive our business to new heights,” said Kirk Tanner, The Hershey Company President and Chief Executive Officer.
First-Quarter 2026 Financial Results Summary1
•Consolidated net sales of $3,104.2 million, an increase of 10.6%.
•Organic, constant currency net sales increased 7.9%.
•Reported net income of $435.1 million, or $2.13 per share-diluted, an increase of 93.6%.
•Adjusted earnings per share-diluted of $2.35, an increase of 12.4%.
1 All comparisons for the first quarter of 2026 are with respect to the first quarter ended March 30, 2025
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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* | 4% to 5% | |||||||
| Organic net sales growth | 2.5% to 3.5% | |||||||
| Reported earnings per share growth | 79% to 89% | |||||||
| Adjusted earnings per share growth | 30% to 35% | |||||||
*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% to 27%;
•Other expense, which primarily reflects periodic benefit costs relating to pension and other post-retirement benefit plans, of approximately $15 million to $20 million;
•Interest expense of approximately $200 million to $210 million;
•Capital expenditures in the range of approximately $425 million to $475 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 | $7.77 - $8.19 | $4.34 | |||||||||
| Derivative Mark-to-Market Losses | — | $2.08 | |||||||||
| Business Realignment Activities | 0.30 - 0.35 | $0.29 | |||||||||
| Acquisition and Integration-Related Activities | 0.15 - 0.20 | $0.20 | |||||||||
| Long-Lived Asset Impairment Charges | — | $0.03 | |||||||||
| Tax Effect of All Adjustments Reflected Above | $(0.12) | $(0.63) | |||||||||
| Adjusted EPS – Diluted | $8.20 - $8.52 | $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.
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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 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.
First-Quarter 2026 Consolidated Results
Consolidated net sales increased 10.6% to $3,104.2 million in the first quarter of 2026. Organic, constant currency net sales increased 7.9%, driven by net price realization of approximately 10 points. Volume declined approximately 2 points reflecting elasticity impacts in both the North America Confectionery and International segments. This was partially offset by favorable timing of shipments in the North America Confectionery and International segments. The impact of the LesserEvil acquisition was a 2.0 point benefit, while the foreign exchange benefit was 0.7 points in the first quarter.
Reported gross margin was 39.4% in the first quarter of 2026, compared to 33.7% in the first quarter of 2025, an increase of 570 basis points. The reported gross margin increase was driven by net price realization, lower
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derivative mark-to-market losses versus the same period last year, supply chain productivity and transformation program net savings, which more than offset higher commodity and tariff-related costs. Adjusted gross margin was 40.4% in the first quarter of 2026, a decrease of 80 basis points compared to the first quarter of 2025. This decrease reflects higher commodity and tariff-related costs during the first quarter of 2026, partially offset by net price realization, supply chain productivity and transformation program savings.
Selling, marketing and administrative expenses increased 3.1% in the first quarter of 2026 versus the first quarter of 2025. Selling, marketing and administrative expenses, excluding advertising and related consumer marketing, increased 1.8% versus the first quarter of 2025, driven by higher capability and technology investments, partially offset by reduced consulting fees, lower compensation and benefit costs, and transformation program net savings. Advertising and related consumer marketing expenses increased 5.8% in the first quarter of 2026 versus the same period last year, reflecting double-digit increases in the North America Salty Snacks and International segments.
First quarter 2026 reported operating profit was $640.7 million, an increase of 73.5% versus the first quarter of 2025, resulting in a reported operating profit margin of 20.6%, an increase of 740 basis points versus the prior year period. This increase was driven by higher sales, net price realization and lower derivative mark-to-market losses versus the same period last year, which more than offset higher commodity and tariff-related costs and increased advertising and consumer marketing investment. Adjusted operating profit of $686.5 million increased 12.9% versus the first quarter of 2025. Adjusted operating profit margin of 22.1% increased 40 basis points versus the first quarter of 2025, as sales growth more than offset higher commodity and tariff-related costs and increased advertising and consumer marketing investment.
The reported effective tax rate in the first quarter of 2026 was 26.6%, a decrease of 410 basis points versus the first quarter of 2025. The reported effective tax rate decrease was driven by foreign rate differentials on commodity hedges versus the prior year period. The adjusted effective tax rate was 25.0%, an increase of 60 basis points versus the first quarter of 2025. The adjusted effective tax rate for the first quarter of 2026 reflects increased state taxes and foreign rate differentials driven by income mix across geographics versus the year-ago period.
The Company’s first-quarter 2026 results, as prepared in accordance with GAAP, included items positively impacting comparability of $45.8 million, or $0.22 per share-diluted. For the first quarter of 2025, items positively impacting comparability totaled $238.9 million, or $0.99 per share-diluted.
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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
Hershey’s North America Confectionery segment net sales were $2,489.9 million in the first quarter of 2026, an increase of 8.3% versus the same period last year. Organic, constant currency net sales increased 8.0%, driven by approximately 12 points of net price realization. Volume declined approximately 4 points reflecting price elasticity and one fewer shipping day, partially offset by the timing of Q2 shipments and strong innovation performance.
Hershey’s U.S. candy, mint and gum (CMG) retail takeaway for the 12-week period ended March 29, 2026 in the multi-outlet plus convenience store channels (MULO+ w/ Convenience) increased 8.1% as consumer demand sustained despite higher marketplace prices. For this period, Hershey’s CMG share declined compared to the prior year due to increased marketplace competition and the timing of major innovation and merchandising programs.
The North America Confectionery segment reported segment income of $792.4 million in the first quarter of 2026, an increase of 13.8% versus the prior year period, resulting in a segment margin of 31.8% in the quarter, an increase of 150 basis points. The segment income and segment margin increases were driven by higher sales, net price realization, supply chain productivity and transformation program savings, partially offset by higher commodity and tariff-related costs.
North America Salty Snacks
Hershey’s North America Salty Snacks segment net sales were $350.1 million in the first quarter of 2026, an increase of 26.0% versus the same period last year. The acquisition of LesserEvil contributed approximately 20 percentage points to segment growth in the first quarter of 2026. Organic, constant currency net sales increased
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5.6%, driven by a volume increase of over 5 points, reflecting strong innovation and velocity gains. Net price realization was approximately flat.
Hershey’s U.S. salty snacks retail takeaway for the 12-week period ended March 29, 2026 in MULO+ w/ Convenience, excluding LesserEvil, increased 9.8% versus the prior year period. This led to further gains in salty snack market share. Organic, constant currency net sales trailed retail takeaway primarily due to the planned reduction of sales to private label customers.
North America Salty Snacks segment income was $34.3 million in the first quarter of 2026, a decrease of 18.1% versus the first quarter of 2025, driven by higher supply chain costs in part related to a voluntary temporary product withdrawal and increased consumer marketing investments, which more than offset benefits from higher volume and supply chain productivity. This resulted in a segment margin of 9.8%, a decrease of 530 basis points versus the prior year period.
International
First quarter 2026 net sales for Hershey’s International segment increased 16.1% versus the same period last year to $264.2 million. Organic, constant currency net sales increased 9.3%. Price realization was approximately 12 points, driven by strategic pricing actions across markets. Volume decreased approximately 2%, reflecting the impact of price elasticity, partially offset by favorable shipment timing in select markets and continued strong performance in Brazil.
International segment income was $15.3 million in the first quarter of 2026, a decrease of $13.4 million versus the prior year period driven by increased commodity and manufacturing costs and higher advertising investment, partially offset by sales growth, net price realization and supply chain productivity and transformation program savings. This resulted in a segment margin of 5.8%, a decrease of 680 basis points versus the prior year period.
Unallocated Corporate Expense
Hershey’s unallocated corporate expense in the first quarter of 2026 was $155.4 million, a decrease of $3.4 million, or 2.1%, versus the same period of 2025. The year-over-year decline reflects reduced consulting fees and lower compensation and benefit costs, which more than offset continued investments in capabilities and technology during the quarter.
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Live Webcast
At approximately 7:00 a.m. (Eastern time) today, Hershey will post a pre-recorded management discussion of its first-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 first 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.
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| 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.
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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).
9
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.
10
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.
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| 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 | % | |||||||||||||||||||
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| 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 | % | |||||||||||||
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| 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 | |||||||
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FAQ
How did Hershey (HSY) perform in the first quarter of 2026?
Hershey reported strong first-quarter 2026 results. Net sales rose 10.6% to $3,104.2 million, while reported net income reached $435.1 million. Diluted EPS was $2.13, and non-GAAP diluted EPS increased 12.4% to $2.35, reflecting higher pricing and lower hedge losses.
What is Hershey’s 2026 full-year financial outlook?
For 2026, Hershey expects net sales growth of 4%–5% and organic net sales growth of 2.5%–3.5%. Reported EPS growth is projected at 79%–89%, with adjusted EPS growth of 30%–35%, based on 2025 reported EPS of $4.34 and adjusted EPS of $6.31.
How did Hershey’s segment sales and margins trend in Q1 2026?
North America Confectionery net sales grew 8.3% to $2,489.9 million, with a 31.8% margin. North America Salty Snacks sales rose 26.0% to $350.1 million but margin declined to 9.8%. International sales increased 16.1% to $264.2 million, with margin falling to 5.8%.
What drove Hershey’s margin changes in the first quarter of 2026?
Reported gross margin improved to 39.4% from 33.7%, mainly from pricing, lower derivative mark-to-market losses, and productivity savings. Non-GAAP gross margin declined to 40.4%, reflecting higher commodity and tariff-related costs that more than offset these benefits on an adjusted basis.
How is the LesserEvil acquisition affecting Hershey’s results?
The 2025 acquisition of LesserEvil contributed about 2.0 points to total company Q1 2026 net sales growth and roughly 20 percentage points to North America Salty Snacks growth. Full-year 2026 net sales guidance also reflects an approximate 150 basis point benefit from this acquisition.
What capital spending and cost savings does Hershey plan for 2026?
Hershey expects $425 million–$475 million in 2026 capital expenditures to support operations and growth. It also targets approximately $100 million in savings from its Advancing Agility & Automation Initiative, aimed at improving supply chain efficiency and optimizing operating expenses.