Third quarter 2026
Filed Oct 29, 2026Hershey Reports Third-Quarter 2026 Financial Results
Third-quarter net sales rose 3.0% and reported and adjusted earnings increased sharply on pricing, derivative mark-to-market gains, tariff refunds, productivity savings and lower net commodity costs, but organic sales growth was 0.8% as volume declined approximately 10 points. North America Salty Snacks and International profitability weakened.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 27, 2026GAAP | $3.28B | – | 3.0% |
| Organic, constant currency net sales growth, three months ended September 27, 2026other | 0.8% | – | – |
| Organic price, three months ended September 27, 2026other | 11% | – | – |
| Organic volume/mix, three months ended September 27, 2026other | (10)% | – | – |
| Cost of sales, three months ended September 27, 2026GAAP | $1.76B | – | – |
| Gross profit, three months ended September 27, 2026GAAP | $1.51B | – | – |
| Gross margin, three months ended September 27, 2026GAAP | 46.1% | – | an increase of 1,350 basis points |
| Non-GAAP gross profit, three months ended September 27, 2026non-GAAP | $1,397,958 | – | – |
| Non-GAAP gross margin, three months ended September 27, 2026non-GAAP | 42.7% | – | an increase of 1,090 basis points |
| Selling, marketing and administrative expense, three months ended September 27, 2026GAAP | $692.9M | – | 15.4% |
| Business realignment costs, three months ended September 27, 2026GAAP | $505K | – | – |
| Operating profit, three months ended September 27, 2026GAAP | $817.7M | – | 88.1% |
| Operating profit margin, three months ended September 27, 2026GAAP | 25.0% | – | an increase of 1,130 basis points |
| Non-GAAP operating profit, three months ended September 27, 2026non-GAAP | $754.0M | – | 78.5% |
| Non-GAAP operating profit margin, three months ended September 27, 2026non-GAAP | 23.0% | – | an increase of 970 basis points |
| Interest expense, net, three months ended September 27, 2026GAAP | $48.67M | – | (5.4)% |
| Other (income) expense, net, three months ended September 27, 2026GAAP | $975K | – | (91.3)% |
| Income before income taxes, three months ended September 27, 2026GAAP | $768.0M | – | 106.5% |
| Provision for income taxes, three months ended September 27, 2026GAAP | $187.2M | – | – |
| Effective tax rate, three months ended September 27, 2026GAAP | 24.4% | – | a decrease of 130 basis points |
| Non-GAAP effective tax rate, three months ended September 27, 2026non-GAAP | 24.4% | – | a decrease of 230 basis points |
| Net income, three months ended September 27, 2026GAAP | $580.8M | – | 111.8% |
| Net margin, three months ended September 27, 2026GAAP | 17.7% | – | – |
| Non-GAAP net income, three months ended September 27, 2026non-GAAP | $532,728 | – | – |
| EPS - Diluted, three months ended September 27, 2026GAAP | $2.88 | – | 111.8% |
| Non-GAAP EPS - Diluted, three months ended September 27, 2026non-GAAP | $2.64 | – | 103.1% |
| Net sales, nine months ended September 27, 2026GAAP | $9.17B | – | 6.6% |
| Organic, constant currency net sales growth, nine months ended September 27, 2026other | 4.0% | – | – |
| Gross profit, nine months ended September 27, 2026GAAP | $4.00B | – | – |
| Gross margin, nine months ended September 27, 2026GAAP | 43.6% | – | – |
| Operating profit, nine months ended September 27, 2026GAAP | $2.10B | – | 110.8% |
| Non-GAAP operating profit, nine months ended September 27, 2026non-GAAP | $2,003,989 | – | – |
| Net income, nine months ended September 27, 2026GAAP | $1.47B | – | 162.5% |
| Non-GAAP net income, nine months ended September 27, 2026non-GAAP | $1,397,483 | – | – |
| EPS - Diluted, nine months ended September 27, 2026GAAP | $7.27 | – | 162.5% |
| Non-GAAP EPS - Diluted, nine months ended September 27, 2026non-GAAP | $6.89 | – | 49.1% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North America Confectionery, three months ended September 27, 2026Organic, 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. | $2.66B | – | 1.6% |
| North America Salty Snacks, three months ended September 27, 2026The acquisition of LesserEvil contributed approximately 20 percentage points to segment growth. Organic, constant currency net sales increased 2.3%, with volume increasing approximately 1 points and net price realization an approximate 1 point benefit. | $392.7M | – | 22.3% |
| International, three months ended September 27, 2026Organic, constant currency net sales decreased 9.7%. Price realization was approximately 4 points, while volume decreased approximately 14%, driven by quarterly shipment timing, planned portfolio rationalization in select markets and price elasticity. | $226.4M | – | (7.5)% |
| North America Confectionery, nine months ended September 27, 2026Organic, constant currency net sales increased 4.5%, with organic price of 13% and organic volume/mix of (8)%. | $7,319,949 | – | 4.6% |
| North America Salty Snacks, nine months ended September 27, 2026The acquisition contributed 21.0% to growth. Organic, constant currency net sales increased 2.7%, with organic price of (1)% and organic volume/mix of 3%. | $1,130,598 | – | 23.7% |
| International, nine months ended September 27, 2026Organic, constant currency net sales increased 0.3%, with organic price of 8% and organic volume/mix of (8)%. | $716,436 | – | 4.4% |
2026 Full-Year Outlook outlook
- RevenueNet sales growth ~5%; Organic net sales growth ~3%
- Tax rateA reported and adjusted effective tax rate of approximately 25%
- NoteReported earnings per share growth 84% to 90%
- NoteAdjusted earnings per share growth 36% to 38.5%
- NoteOther expense of approximately $5 million to $10 million
- NoteInterest expense of approximately $200 million
- NoteCapital expenditures of approximately $450 million
- NoteAdvancing Agility & Automation Initiative savings of approximately $100 million
- NoteReported EPS – Diluted $8.00 - $8.26
- NoteAdjusted EPS – Diluted $8.58 - $8.74
What drove it
- Third-quarter organic, constant currency net sales increased 0.8%, driven by net price realization of approximately 11 points.
- The LesserEvil acquisition was a 2.1 point benefit to third-quarter total-company net sales growth.
- Reported gross margin benefited from net price realization, derivative mark-to-market gains, productivity program savings, tariff refunds and lower net commodity costs.
- North America Salty Snacks retail takeaway, excluding LesserEvil, increased 4.0% in the 12-week period ended September 27, 2026, leading to further gains in salty snack market share.
Concerns
- Third-quarter volume declined approximately 10 points, reflecting elasticity impacts in North America Confectionery and International, shipment timing and planned portfolio optimization in International.
- Hershey's CMG retail takeaway increased 0.8% for the 12-week period ended September 27, 2026, and CMG share declined year over year for this period.
- North America Salty Snacks segment income decreased 17.9% and segment margin decreased 590 basis points.
- International segment loss was $30.0 million and segment margin was (13.3)%.
- Selling, marketing and administrative expenses increased 15.4%, including a 17.1% increase in advertising and related consumer marketing expenses.
What to watch
- Whether demand creation initiatives sustain sales growth as consumers grow more cautious.
- Volume recovery in North America Confectionery and International following price elasticity, shipment timing and portfolio optimization.
- North America Salty Snacks profitability amid higher freight, logistics, manufacturing and net commodity costs.
- Execution of approximately $100 million in Advancing Agility & Automation Initiative savings.
- The impact of commodity derivative mark-to-market gains and losses, which are excluded from adjusted results until related inventory is sold.
Balance sheet and cash flow
- Cash and cash equivalents of $676,688 as of September 27, 2026, compared to $925,859 as of December 31, 2025
- Short-term debt of $436,012 as of September 27, 2026, compared to $218,546 as of December 31, 2025
- Current portion of long-term debt of $197,843 as of September 27, 2026, compared to $503,327 as of December 31, 2025
- Long-term debt of $4,492,634 as of September 27, 2026, compared to $4,681,194 as of December 31, 2025
Analysis
Hershey delivered 3.0% third-quarter net sales growth to $3,275.5 million, but underlying demand was more subdued. Organic, constant currency sales increased 0.8%, as approximately 11 points of net price realization and a 2.1 point LesserEvil acquisition benefit offset an approximately 10-point decline in volume/mix. The volume decline reflected elasticity in North America Confectionery and International, shipment timing and portfolio optimization, while North America Salty Snacks posted positive organic volume/mix.
Profitability recovered sharply. Reported gross margin rose to 46.1% from 32.6%, while non-GAAP gross margin increased to 42.7% from 31.8%. Reported operating profit rose 88.1% to $817.7 million and adjusted operating profit rose 78.5% to $754.0 million. Net price realization, productivity program savings, tariff refunds and lower net commodity costs supported margins, while reported results also benefited from derivative mark-to-market gains. Higher freight and logistics expenses, advertising and consumer marketing, and capability and technology investments partly offset these benefits.
North America Confectionery sales increased 1.6%, but price realization of approximately 13 points was offset by an approximately 11-point volume decline. Segment income nevertheless increased 66.2% and segment margin rose 1,400 basis points to 35.8%. North America Salty Snacks revenue rose 22.3%, primarily from approximately 20 percentage points of LesserEvil contribution, but segment income declined 17.9% and margin fell to 12.1% amid higher freight, logistics, manufacturing and net commodity costs. International sales declined 7.5%, organic sales declined 9.7%, and the segment recorded a $30.0 million loss.
The company updated its full-year outlook to approximately 5% net sales growth and approximately 3% organic net sales growth. It now expects reported EPS growth of 84% to 90% and adjusted EPS growth of 36% to 38.5%, with projected reported diluted EPS of $8.00 - $8.26 and adjusted diluted EPS of $8.58 - $8.74. The outlook includes approximately $0.22 from tariff refunds received in Q3 2026 and $0.03 in Q2 2026 for adjusted EPS growth.
The balance sheet showed $676.7 million of cash and cash equivalents at September 27, 2026, with $436.0 million of short-term debt, $197.8 million of current long-term debt and $4.5 billion of long-term debt. The release provided no operating cash flow, free cash flow, dividends or share repurchase figures. The key reported watchpoints are whether pricing-led growth can convert into improved volume, the profit recovery in Salty Snacks and International, and the realization of approximately $100 million in Advancing Agility & Automation Initiative savings.
Management, verbatim
Our third-quarter results show steady progress on our 2026 priorities.
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.
Kirk Tanner, The Hershey Company President and Chief Executive Officer
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.
Kirk Tanner, The Hershey Company President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook for comparison
- Operating cash flow
- Free cash flow
- Share repurchases
- Dividends
- Capital return amounts
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.