The Hershey Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated net sales for the third quarter ended September 27, 2026, were $3,275.5 million, an increase of 3.0% year-over-year.
• Organic, constant currency net sales increased 0.8% in the third quarter.
• Reported net income for the third quarter was $580.8 million ($2.88 per share-diluted), an increase of 111.8% compared to the prior year period.
• Adjusted earnings per share-diluted for the third quarter was $2.64, an increase of 103.1% year-over-year.
• For the nine months ended September 27, 2026, consolidated net sales were $9,167.0 million, an increase of 6.6% year-over-year.
• Organic, constant currency net sales increased 4.0% for the nine-month period.
• Reported net income for the nine months was $1,473.6 million ($7.27 per share-diluted), an increase of 162.5% year-over-year.
• Adjusted earnings per share-diluted for the nine months was $6.89, an increase of 49.1% year-over-year.
• Reported gross margin was 46.1% in the third quarter of 2026, compared to 32.6% in the third quarter of 2025.
• Adjusted gross margin was 42.7% in the third quarter of 2026, an increase of 1,090 basis points versus the prior year period.
• Reported operating profit was $817.7 million in the third quarter, an increase of 88.1% year-over-year, with an operating profit margin of 25.0%.
• Adjusted operating profit was $754.0 million in the third quarter, an increase of 78.5% year-over-year, with an adjusted operating profit margin of 23.0%.
• The reported effective tax rate was 24.4% in the third quarter of 2026, a decrease of 130 basis points versus the prior year period.
• Unallocated corporate expense was $213.1 million in the third quarter of 2026, an increase of 10.3% year-over-year.

Guidance and Future Outlook:

• The Company updated its 2026 full-year net sales growth outlook to approximately 5%, up from the prior guidance of 4.5% to 5%.
• The 2026 full-year organic net sales growth outlook was updated to approximately 3%, down from the prior guidance of 3% to 3.5%.
• The 2026 full-year reported earnings per share growth outlook was raised to 84% to 90%, up from the prior guidance of 82% to 89%.
• The 2026 full-year adjusted earnings per share growth outlook was raised to 36% to 38.5%, up from the prior guidance of 32.5% to 35%.
• The Company expects a reported and adjusted effective tax rate of approximately 25% for the full year 2026.
• Other expense is expected to be approximately $5 million to $10 million for the full year.
• Interest expense is expected to be approximately $200 million for the full year.
• Capital expenditures are expected to be approximately $450 million for the full year.
• Savings from the Advancing Agility & Automation Initiative are expected to be approximately $100 million for the full year.
• The outlook does not include potential future tariff refunds.

Business Segments and Product Lines:

• North America Confectionery: Net sales were $2,656.5 million, an increase of 1.6% year-over-year. Organic, constant currency net sales increased 1.6%, driven by 13 points of net price realization, while volume declined 11 points. Segment income was $949.7 million, an increase of 66.2% year-over-year, with a segment margin of 35.8%.
• North America Salty Snacks: Net sales were $392.7 million, an increase of 22.3% year-over-year. The acquisition of LesserEvil contributed approximately 20 percentage points to segment growth. Organic, constant currency net sales increased 2.3%. Segment income was $47.4 million, a decrease of 17.9% year-over-year, with a segment margin of 12.1%.
• International: Net sales were $226.4 million, a decrease of 7.5% year-over-year. Organic, constant currency net sales decreased 9.7%, driven by a 14% volume decline partially offset by 4 points of price realization. The segment reported a loss of $30.0 million, with a segment margin of (13.3)%.
• U.S. candy, mint and gum (CMG) retail takeaway increased 0.8% for the 12-week period ended September 27, 2026, but Hershey's CMG share declined year-over-year.
• U.S. salty snacks retail takeaway (excluding LesserEvil) increased 4.0% for the 12-week period ended September 27, 2026, leading to further gains in salty snack market share.

Market and Competitive Landscape:

• Consumers are described as growing more cautious.
• North America Confectionery volume declines reflect price elasticity impacts.
• International volume declines reflect price elasticity, shipment timing, and planned portfolio rationalization.
• North America Salty Snacks volume growth reflects demand growth and retailer inventory replenishment, partially offset by planned reduction in private label production.

Risks and Challenges:

• Volume declines in North America Confectionery and International due to price elasticity.
• Higher freight, logistics, and manufacturing costs impacting North America Salty Snacks margins.
• Increased net commodity costs and higher consumer marketing investments impacting North America Salty Snacks.
• Higher input and manufacturing costs in the International segment.
• Planned portfolio optimization and rationalization in International markets.
• The Safe Harbor statement notes risks including supply chain disruptions, raw material cost volatility, regulatory changes, geopolitical tensions, and integration risks associated with acquisitions.

Management Commentary and Tone:

• Kirk Tanner, President and CEO, stated that third-quarter results show "steady progress on our 2026 priorities."
• Management noted that second-half demand creation initiatives are "gaining momentum, even as consumers grow more cautious."
• Management expressed confidence in being "on track to deliver solid sales growth, a meaningful recovery in margin and earnings, and disciplined investment to fuel our next chapter of growth."

Other Key Points:

• The 2026 full-year adjusted EPS outlook includes approximately $0.22 from tariff refunds received in Q3 2026 and $0.03 in Q2 2026.
• The acquisition of LesserEvil contributed approximately 20 percentage points to North America Salty Snacks growth in the third quarter.
• The Company incurred costs related to the integration of LesserEvil and the Sour Strips brand from Actual Candy, LLC.
• Derivative mark-to-market gains of $113.4 million were recorded in the third quarter of 2026, contributing to the reported gross margin increase.
• The Company hosted a live question and answer session with investors and financial analysts on October 29, 2026.
• Cash and cash equivalents were $676.7 million as of September 27, 2026, compared to $925.9 million as of December 31, 2025.
• Total assets were $13.9 billion as of September 27, 2026, compared to $13.7 billion as of December 31, 2025.