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Hershey Q1 Earnings Top Estimates on Pricing-Led Sales Growth
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Key Takeaways
HSY posted Q1 adjusted EPS of $2.35 and net sales of $3,104.2 million, both topping estimates.
HSY's organic sales rose 7.9% as nearly 10 points of pricing offset about 2 points of volume decline.
HSY's adjusted gross margin fell 80 bps to 40.4%, yet the 2026 sales and EPS growth guidance was reaffirmed.
The Hershey Company (HSY - Free Report) has delivered a solid start to 2026, with both top and bottom lines beating the Zacks Consensus Estimate, supported by pricing and resilient category demand. Adjusted earnings were $2.35 per share, rising 12.4% year over year and beating the Zacks Consensus Estimate of $2.05.
Net sales rose 10.6% year over year to $3,104.2 million and topped the consensus mark of $3,029 million. Brand execution helped, with non-seasonal retail sales lifts of 11% for Hershey’s and 10% for Reese’s.
Organic, constant-currency net sales increased 7.9% in the first quarter of 2026. The company cited net price realization of about 10 points, while volume declined roughly 2 points, reflecting price elasticity impacts in North America Confectionery and International.
Reported growth also benefited from inorganic and currency factors. The LesserEvil acquisition contributed a 2.0-point benefit to total company net sales growth, while foreign exchange added 0.7 points. Management also noted favorable shipment timing in North America Confectionery and International.
Hershey Company (The) Price, Consensus and EPS Surprise
Hershey’s adjusted gross margin declined 80 basis points to 40.4% as commodity inflation and tariff costs outweighed pricing, productivity and transformation savings. Management expects a meaningful recovery in the gross margin to begin in the second quarter as elevated commodity costs are lapped, while the full-year gross margin view remains an improvement of nearly 400 basis points.
Selling, marketing and administrative expenses increased 3.1% year over year in the first quarter. Advertising and related consumer marketing expenses increased 5.8%, reflecting double-digit increases in the North America Salty Snacks and International segments. Despite higher investment, profitability advanced.
Adjusted operating profit rose 12.9% to $686.5 million and the adjusted operating margin improved 40 basis points to 22.1%.
Management has also reiterated that it remains on track to deliver $100 million in Advancing Agility & Automation Initiative savings in 2026, with $26 million achieved in the first quarter.
Hershey’s Segmental Breakdown
North America Confectionery net sales increased 8.3% to $2,489.9 million. Organic, constant-currency net sales rose 8%, driven by about 12 points of net price realization, partly offset by an approximate 4-point volume decline tied to price elasticity and one fewer shipping day, with some benefit from shipment timing.
Retail consumption trends were constructive. For the 12 weeks ended March 29, 2026, U.S. candy, mint and gum retail takeaway in MULO+ with convenience increased 8.1%. However, the company noted that the candy, mint and gum share declined year over year due to increased competition and the timing of major innovation and merchandising programs. Segment income increased 13.8% to $792.4 million, lifting the segment margin 150 basis points to 31.8%.
North America Salty Snacks' net sales increased 26% to $350.1 million. The LesserEvil acquisition represented a 20.4-percentage-point benefit to segment growth, while organic, constant-currency net sales increased 5.6%, driven by a volume increase of more than 5 points. Net price realization was approximately flat.
Demand indicators remained strong, though profitability declined. Excluding LesserEvil, U.S. salty snacks retail takeaway increased 9.8% for the 12 weeks ended March 29, 2026, in MULO+ with convenience, contributing to market share gains. Segment income fell 18.1% to $34.3 million, and the segment margin decreased 530 basis points to 9.8%, reflecting higher supply-chain costs, including the impacts related to a voluntary temporary product withdrawal, and increased consumer marketing investments.
International net sales increased 16.1% to $264.2 million. Organic, constant-currency net sales rose 9.3%, driven by about 12 points of price realization, while volume declined approximately 2% due to elasticity, partly offset by favorable shipment timing in select markets and strong performance in Brazil. Segment income decreased to $15.3 million and the segment margin fell 680 basis points to 5.8% as higher commodity and manufacturing costs and increased advertising investment weighed on the results.
Hershey’s Financial Status & Guidance
HSY ended the quarter with nearly $877 million in cash and cash equivalents, long-term debt of $4,684.4 million, and total stockholders’ equity of $4,733.8 million, while the company paid out $288 million in dividends and repurchased $69 million of shares during the quarter.
Management has reaffirmed its 2026 guidance, calling for net sales growth of 4% to 5%, and organic net sales growth of 2.5% to 3.5%. The company expects adjusted earnings per share growth of 30% to 35%, and reported earnings per share growth of 79% to 89%. Hershey envisions a capital expenditure of $425 million to $475 million.
This Zacks Rank #3 (Hold) stock has risen 3.9% year to date compared with the industry’s growth of 3.8%.
The Zacks Consensus Estimate for Smithfield Foods’ current financial-year sales and earnings indicates growth of 1.3% and 7.5%, respectively, from the prior-year reported levels. SFD delivered a trailing four-quarter earnings surprise of 12%, on average.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company through the Beef, Pork, Chicken and Prepared Foods segments. TSN currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales calls for growth of 4.4%, while the consensus mark for earnings indicates a decline of 4.1% from the year-ago reported figures. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
Post Holdings (POST - Free Report) operates as a consumer-packaged goods holding company. At present, POST carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 19.6%, on average.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings implies growth of 2.7% and 0.1%, respectively, from the year-ago reported figures.
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Hershey Q1 Earnings Top Estimates on Pricing-Led Sales Growth
Key Takeaways
The Hershey Company (HSY - Free Report) has delivered a solid start to 2026, with both top and bottom lines beating the Zacks Consensus Estimate, supported by pricing and resilient category demand. Adjusted earnings were $2.35 per share, rising 12.4% year over year and beating the Zacks Consensus Estimate of $2.05.
Net sales rose 10.6% year over year to $3,104.2 million and topped the consensus mark of $3,029 million. Brand execution helped, with non-seasonal retail sales lifts of 11% for Hershey’s and 10% for Reese’s.
Organic, constant-currency net sales increased 7.9% in the first quarter of 2026. The company cited net price realization of about 10 points, while volume declined roughly 2 points, reflecting price elasticity impacts in North America Confectionery and International.
Reported growth also benefited from inorganic and currency factors. The LesserEvil acquisition contributed a 2.0-point benefit to total company net sales growth, while foreign exchange added 0.7 points. Management also noted favorable shipment timing in North America Confectionery and International.
Hershey Company (The) Price, Consensus and EPS Surprise
Hershey Company (The) price-consensus-eps-surprise-chart | Hershey Company (The) Quote
HSY’s Cost & Margin Picture
Hershey’s adjusted gross margin declined 80 basis points to 40.4% as commodity inflation and tariff costs outweighed pricing, productivity and transformation savings. Management expects a meaningful recovery in the gross margin to begin in the second quarter as elevated commodity costs are lapped, while the full-year gross margin view remains an improvement of nearly 400 basis points.
Selling, marketing and administrative expenses increased 3.1% year over year in the first quarter. Advertising and related consumer marketing expenses increased 5.8%, reflecting double-digit increases in the North America Salty Snacks and International segments.
Despite higher investment, profitability advanced.
Adjusted operating profit rose 12.9% to $686.5 million and the adjusted operating margin improved 40 basis points to 22.1%.
Management has also reiterated that it remains on track to deliver $100 million in Advancing Agility & Automation Initiative savings in 2026, with $26 million achieved in the first quarter.
Hershey’s Segmental Breakdown
North America Confectionery net sales increased 8.3% to $2,489.9 million. Organic, constant-currency net sales rose 8%, driven by about 12 points of net price realization, partly offset by an approximate 4-point volume decline tied to price elasticity and one fewer shipping day, with some benefit from shipment timing.
Retail consumption trends were constructive. For the 12 weeks ended March 29, 2026, U.S. candy, mint and gum retail takeaway in MULO+ with convenience increased 8.1%. However, the company noted that the candy, mint and gum share declined year over year due to increased competition and the timing of major innovation and merchandising programs. Segment income increased 13.8% to $792.4 million, lifting the segment margin 150 basis points to 31.8%.
North America Salty Snacks' net sales increased 26% to $350.1 million. The LesserEvil acquisition represented a 20.4-percentage-point benefit to segment growth, while organic, constant-currency net sales increased 5.6%, driven by a volume increase of more than 5 points. Net price realization was approximately flat.
Demand indicators remained strong, though profitability declined. Excluding LesserEvil, U.S. salty snacks retail takeaway increased 9.8% for the 12 weeks ended March 29, 2026, in MULO+ with convenience, contributing to market share gains. Segment income fell 18.1% to $34.3 million, and the segment margin decreased 530 basis points to 9.8%, reflecting higher supply-chain costs, including the impacts related to a voluntary temporary product withdrawal, and increased consumer marketing investments.
International net sales increased 16.1% to $264.2 million. Organic, constant-currency net sales rose 9.3%, driven by about 12 points of price realization, while volume declined approximately 2% due to elasticity, partly offset by favorable shipment timing in select markets and strong performance in Brazil. Segment income decreased to $15.3 million and the segment margin fell 680 basis points to 5.8% as higher commodity and manufacturing costs and increased advertising investment weighed on the results.
Hershey’s Financial Status & Guidance
HSY ended the quarter with nearly $877 million in cash and cash equivalents, long-term debt of $4,684.4 million, and total stockholders’ equity of $4,733.8 million, while the company paid out $288 million in dividends and repurchased $69 million of shares during the quarter.
Management has reaffirmed its 2026 guidance, calling for net sales growth of 4% to 5%, and organic net sales growth of 2.5% to 3.5%. The company expects adjusted earnings per share growth of 30% to 35%, and reported earnings per share growth of 79% to 89%. Hershey envisions a capital expenditure of $425 million to $475 million.
This Zacks Rank #3 (Hold) stock has risen 3.9% year to date compared with the industry’s growth of 3.8%.
Stocks to Consider
Smithfield Foods, Inc. (SFD - Free Report) produces various packaged meats and fresh pork products in the United States and internationally. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Smithfield Foods’ current financial-year sales and earnings indicates growth of 1.3% and 7.5%, respectively, from the prior-year reported levels. SFD delivered a trailing four-quarter earnings surprise of 12%, on average.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company through the Beef, Pork, Chicken and Prepared Foods segments. TSN currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales calls for growth of 4.4%, while the consensus mark for earnings indicates a decline of 4.1% from the year-ago reported figures. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
Post Holdings (POST - Free Report) operates as a consumer-packaged goods holding company. At present, POST carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 19.6%, on average.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings implies growth of 2.7% and 0.1%, respectively, from the year-ago reported figures.