second quarter 2026
Filed Jul 30, 2026Hershey Reports Second-Quarter 2026 Financial Results
Second-quarter net sales increased 6.6%, reported operating profit increased 233.3%, and adjusted earnings per share-diluted increased 57.0%. The company narrowed its 2026 outlook ranges upward at the low end, although organic growth was driven by net price realization while volume declined.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated net salesGAAP | $2,787.3 million | – | 6.6% |
| Organic, constant currency net sales growthnon-GAAP | 3.6% | – | – |
| Reported gross marginGAAP | 45.3% | – | an increase of 1,480 basis points |
| Adjusted gross marginnon-GAAP | 41.6% | – | an increase of 350 basis points |
| Selling, marketing and administrative expenses changeGAAP | increased 2.9% | – | increased 2.9% |
| Selling, marketing and administrative expenses, excluding advertising and related consumer marketing, changeother | increased 6.0% | – | increased 6.0% |
| Advertising and related consumer marketing expenses changeGAAP | decreased 3.3% | – | decreased 3.3% |
| Reported operating profitGAAP | $642.6 million | – | 233.3% |
| Reported operating profit marginGAAP | 23.1% | – | an increase of 1,570 basis points |
| Adjusted operating profitnon-GAAP | $563.5 million | – | 37.3% |
| Adjusted operating profit marginnon-GAAP | 20.2% | – | increased 450 basis points |
| Reported effective tax rateGAAP | 22.2% | – | a decrease of 3,570 basis points |
| Adjusted effective tax ratenon-GAAP | 24.2% | – | a decrease of 860 basis points |
| Reported net incomeGAAP | $457.7 million | – | 629.0% |
| Reported earnings per share-dilutedGAAP | $2.26 per share-diluted | – | 629.0% |
| Adjusted earnings per share-dilutednon-GAAP | $1.90 | – | 57.0% |
| Items negatively impacting comparabilityGAAP | $79.1 million, or $0.36 per share-diluted | – | – |
| Six months consolidated net salesGAAP | $5,891.5 million | – | 8.7% |
| Six months organic, constant currency net sales growthnon-GAAP | 5.8% | – | – |
| Six months reported net incomeGAAP | $892.8 million | – | 211.3% |
| Six months reported earnings per share-dilutedGAAP | $4.39 per share-diluted | – | 211.3% |
| Six months adjusted earnings per share-dilutednon-GAAP | $4.25 | – | 28.4% |
| Six months items impacting comparabilityGAAP | $(33.3) million, or $(0.14) per share-diluted | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North America ConfectioneryOrganic, constant currency net sales increased 4.2%, driven by approximately 14 points of net price realization. Volume declined approximately 10 points reflecting price elasticity and normal quarter-to-quarter shipment variability, partially offset by retailer inventory replenishment. | $2,173.6 million | – | 4.2% |
2026 Full-Year Outlook outlook
- RevenueNet sales growth: 4.5% to 5%; Organic net sales growth: 3% to 3.5%
- Tax rateA reported and adjusted effective tax rate in the range of approximately 25% to 27%
- NoteReported earnings per share growth: 82% to 89%
- NoteAdjusted earnings per share growth: 32.5% to 35%
- NoteReported EPS – Diluted: $7.89 - $8.17
- NoteBusiness Realignment Activities: 0.30 - 0.35
- NoteAcquisition and Integration-Related Activities: 0.18 - 0.25
- NoteTax Effect of All Adjustments Reflected Above: $(0.13)
- NoteAdjusted EPS – Diluted: $8.36 - $8.52
- NoteOther expense: approximately $10 million
- NoteInterest expense: approximately $200 million to $210 million
- NoteCapital expenditures: approximately $425 million to $475 million
- NoteAdvancing Agility & Automation Initiative savings: approximately $100 million
- NoteNet sales growth reflects an approximately 150 basis point benefit from the 2025 acquisition of LesserEvil
What drove it
- Consolidated organic, constant currency net sales increased 3.6%, driven by net price realization of approximately 12 points.
- The LesserEvil acquisition provided a 2.7 point benefit to second-quarter net sales growth, while foreign exchange provided a 0.3 point benefit.
- Reported and adjusted operating profit margin increases reflected net price realization, lower net commodity costs, and productivity program savings.
- North America Salty Snacks organic volume/mix increased 4%, while North America Confectionery and International organic volume/mix declined.
Concerns
- Total Company organic volume/mix declined approximately 8 points in the second quarter.
- North America Confectionery volume declined approximately 10 points, reflecting price elasticity and normal quarter-to-quarter shipment variability.
- International organic volume/mix declined 8%.
- Hershey's CMG share declined compared to the prior year due to increased competitive innovation.
- Higher logistic expenses, unfavorable mix, and capability and technology investments were partial offsets to margin gains.
- The outlook does not include potential future tariff rebates.
What to watch
- Whether net price realization continues to offset volume declines and elasticity impacts in North America Confectionery and International.
- The effect of increased investment behind brands, merchandising, and innovation during the second half.
- Delivery of approximately $100 million in Advancing Agility & Automation Initiative savings.
- The range of approximately $425 million to $475 million in capital expenditures and approximately $200 million to $210 million in interest expense.
Analysis
Hershey delivered a strong second quarter, with consolidated net sales of $2,787.3 million, up 6.6%, and organic, constant currency net sales growth of 3.6%. Growth was principally price-led. Net price realization contributed approximately 12 points to total company organic growth, while volume declined approximately 8 points. The LesserEvil acquisition added a 2.7 point benefit and foreign exchange added 0.3 points to reported sales growth.
Profitability recovered sharply. Reported gross margin was 45.3%, up 1,480 basis points, and adjusted gross margin was 41.6%, up 350 basis points. Reported operating profit increased 233.3% to $642.6 million, while adjusted operating profit increased 37.3% to $563.5 million. The release attributes the margin improvement to price realization, lower net commodity costs, and productivity savings, with reported results also benefiting from derivative mark-to-market gains.
Reported net income was $457.7 million and reported earnings per share-diluted was $2.26 per share-diluted, both increasing 629.0%. Adjusted earnings per share-diluted was $1.90, up 57.0%. The scale of the reported earnings increase also reflects comparability items: second-quarter 2026 GAAP results included $79.1 million, or $0.36 per share-diluted, of items negatively impacting comparability, compared with $217.7 million, or $0.90 per share-diluted, of items positively impacting comparability in the second quarter of 2025.
North America Confectionery generated $2,173.6 million of net sales, up 4.2%, but its approximately 14 points of price realization was accompanied by an approximately 10-point volume decline. The company cited price elasticity and normal shipment variability, partly offset by retailer inventory replenishment. It also reported that U.S. candy, mint and gum retail takeaway increased 3.7% for the 12-week period ended July 19, 2026, while share declined due to increased competitive innovation.
The company narrowed its full-year 2026 outlook. Net sales growth is now expected at 4.5% to 5%, organic net sales growth at 3% to 3.5%, reported earnings per share growth at 82% to 89%, and adjusted earnings per share growth at 32.5% to 35%. The outlook retains meaningful execution dependencies around volume, price elasticity, cost and logistics, capital expenditures of approximately $425 million to $475 million, and the expected approximately $100 million in Advancing Agility & Automation Initiative savings.
Management, verbatim
We delivered a strong first half, with reported net sales up 8.7%, organic net sales up 5.8% and meaningful earnings recovery. We enter the second half with momentum, compelling growth plans, and increased investment behind our brands, merchandising, and innovation. With cost visibility and operating flexibility, we are well positioned to navigate dynamic markets and deliver on our full-year financial commitments.
Kirk Tanner, The Hershey Company President and Chief Executive Officer
Not in the filing
stated, not guessed- Prior-year dollar amounts for consolidated net sales, net income, operating profit, adjusted operating profit, and earnings per share were not provided on their respective line items in the supplied text.
- Prior-year and prior-quarter values for gross margin, operating profit margin, adjusted gross margin, adjusted operating profit margin, and effective tax rates were not provided on their respective line items in the supplied text.
- North America Salty Snacks segment revenue was not included in the supplied text.
- International segment revenue was not included in the supplied text.
- Segment profit metrics were referenced as being in supplementary information but were not included in the supplied text.
- Operating cash flow, free cash flow, cash balance, debt, share repurchases, and dividends were not included in the supplied text.
- Previous-release outlook was not provided, so no comparison of reported results against prior guidance is available.
AlphaAI 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.