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Hershey revised its 2026 sales outlook and now expects adjusted EPS of $8.36-$8.52.
The Hershey Company (HSY - Free Report) delivered a strong second-quarter performance, supported by pricing gains, improving profitability and contributions from the LesserEvil acquisition.
The company posted adjusted earnings of $1.90 per share for the second quarter of 2026, up 57% year over year, supported by stronger sales, gross profit performance and the timing of media investments. The figure beat the Zacks Consensus Estimate of $1.45.
Net sales increased 6.6% to $2,787.3 million and surpassed the consensus mark of $2,649 million. Organic, constant-currency sales rose 3.6%, as roughly 12 points of pricing more than offset an 8-point volume decline.
Hershey Company (The) Price, Consensus and EPS Surprise
The LesserEvil acquisition added 2.7 percentage points to total company sales growth, while foreign currency contributed 0.3 points. Pricing remained the main organic sales driver, particularly in North America Confectionery and International.
Volume pressure primarily reflected elasticity from pricing actions. Management noted that elasticity increased slightly in the quarter but remained somewhat better than its full-year expectations. Retailer inventory replenishment also supported confectionery shipments.
Hershey’s Margin Recovery Accelerates
Adjusted gross margin expanded 350 basis points to 41.6%. Net price realization, lower commodity costs and productivity savings more than offset higher logistics expenses and unfavorable mix.
Adjusted operating profit advanced 37.3% to $563.5 million, while the adjusted operating margin increased 450 basis points to 20.2%. Selling, marketing and administrative expenses rose 2.9%. Advertising and related consumer marketing expenses declined 3.3% due to efficiencies and the timing of non-working media investment.
HSY’s Confectionery Business Leads Profit Growth
North America Confectionery sales increased 4.2% to $2,173.6 million. Organic, constant-currency sales rose at the same rate, as approximately 14 points of net price realization were partly offset by a roughly 10-point volume decline tied to elasticity and shipment variability. Segment income rose 40.1% to $705.8 million, lifting the segment margin 830 basis points to 32.5%.
North America Salty Snacks sales climbed 22.9% to $387.8 million, with the LesserEvil acquisition contributing about 22 percentage points. Organic, constant-currency sales increased 0.6%, as roughly 4 points of volume growth were partly offset by a 3-point pricing headwind from higher trade investment behind new products. Retail takeaway, excluding LesserEvil, increased 6.5%, led by Dot’s, Reese’s Filled Pretzels and variety multipacks. However, supply constraints affecting multipacks and Dot’s pretzels, along with reduced private-label production, limited shipment growth. Segment income fell 5.9% to $62.6 million, and the margin contracted 500 basis points to 16.1%.
International sales increased 5.7% to $225.9 million. Organic, constant-currency sales rose 2.1%, as about 10 points of pricing offset an approximately 8% volume decline caused by elasticity and the depletion of inventory shipped in the first quarter to mitigate geopolitical risk. The segment recorded a loss of $5.1 million compared with income of $19.8 million a year earlier.
HSY Maintains Its Shareholder Return Focus
Cash and cash equivalents totaled $791.2 million at the end of the quarter, while long-term debt stood at nearly $4,684 million. Capital additions, including software, were $90 million, and dividend payments totaled $286 million.
Hershey repurchased $370 million of common shares during the quarter. The company had $270 million remaining under its December 2023 authorization, while the board approved an additional $500 million share repurchase authorization in June 2026.
Hershey’s 2026 Guidance
Management revised its 2026 net sales growth outlook to 4.5%-5% from 4%-5%. Organic sales growth is now projected at 3%-3.5% compared with the previous range of 2.5%-3.5%.
Adjusted earnings growth is expected to be 32.5%-35% versus 30%-35% earlier. This translates to adjusted earnings of $8.36-$8.52 per share.
Hershey continues to expect capital expenditures of $425-$475 million, interest expense of $200-$210 million and $100 million in Advancing Agility & Automation savings.
This Zacks Rank #4 (Sell) stock has dropped 5.6% over the past six months, almost in line with the industry.
Better-Ranked Stocks to Consider
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
The consensus estimate for United Natural’s current fiscal-year earnings per share (EPS) stands at $2.52, which implies substantial growth from the year-ago period earnings of 71 cents. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings implies growth of 31.6% and 64.7%, respectively, from the year-ago figures.
View the Zacks #1 Rank List
Image: Bigstock
Hershey Q2 Earnings Beat Estimates on Pricing and Margin Gains
Key Takeaways
The Hershey Company (HSY - Free Report) delivered a strong second-quarter performance, supported by pricing gains, improving profitability and contributions from the LesserEvil acquisition.
The company posted adjusted earnings of $1.90 per share for the second quarter of 2026, up 57% year over year, supported by stronger sales, gross profit performance and the timing of media investments. The figure beat the Zacks Consensus Estimate of $1.45.
Net sales increased 6.6% to $2,787.3 million and surpassed the consensus mark of $2,649 million. Organic, constant-currency sales rose 3.6%, as roughly 12 points of pricing more than offset an 8-point volume decline.
Hershey Company (The) Price, Consensus and EPS Surprise
Hershey Company (The) price-consensus-eps-surprise-chart | Hershey Company (The) Quote
HSY’s Sales Growth Reflects Pricing Strength
The LesserEvil acquisition added 2.7 percentage points to total company sales growth, while foreign currency contributed 0.3 points. Pricing remained the main organic sales driver, particularly in North America Confectionery and International.
Volume pressure primarily reflected elasticity from pricing actions. Management noted that elasticity increased slightly in the quarter but remained somewhat better than its full-year expectations. Retailer inventory replenishment also supported confectionery shipments.
Hershey’s Margin Recovery Accelerates
Adjusted gross margin expanded 350 basis points to 41.6%. Net price realization, lower commodity costs and productivity savings more than offset higher logistics expenses and unfavorable mix.
Adjusted operating profit advanced 37.3% to $563.5 million, while the adjusted operating margin increased 450 basis points to 20.2%. Selling, marketing and administrative expenses rose 2.9%. Advertising and related consumer marketing expenses declined 3.3% due to efficiencies and the timing of non-working media investment.
HSY’s Confectionery Business Leads Profit Growth
North America Confectionery sales increased 4.2% to $2,173.6 million. Organic, constant-currency sales rose at the same rate, as approximately 14 points of net price realization were partly offset by a roughly 10-point volume decline tied to elasticity and shipment variability. Segment income rose 40.1% to $705.8 million, lifting the segment margin 830 basis points to 32.5%.
North America Salty Snacks sales climbed 22.9% to $387.8 million, with the LesserEvil acquisition contributing about 22 percentage points. Organic, constant-currency sales increased 0.6%, as roughly 4 points of volume growth were partly offset by a 3-point pricing headwind from higher trade investment behind new products. Retail takeaway, excluding LesserEvil, increased 6.5%, led by Dot’s, Reese’s Filled Pretzels and variety multipacks. However, supply constraints affecting multipacks and Dot’s pretzels, along with reduced private-label production, limited shipment growth. Segment income fell 5.9% to $62.6 million, and the margin contracted 500 basis points to 16.1%.
International sales increased 5.7% to $225.9 million. Organic, constant-currency sales rose 2.1%, as about 10 points of pricing offset an approximately 8% volume decline caused by elasticity and the depletion of inventory shipped in the first quarter to mitigate geopolitical risk. The segment recorded a loss of $5.1 million compared with income of $19.8 million a year earlier.
HSY Maintains Its Shareholder Return Focus
Cash and cash equivalents totaled $791.2 million at the end of the quarter, while long-term debt stood at nearly $4,684 million. Capital additions, including software, were $90 million, and dividend payments totaled $286 million.
Hershey repurchased $370 million of common shares during the quarter. The company had $270 million remaining under its December 2023 authorization, while the board approved an additional $500 million share repurchase authorization in June 2026.
Hershey’s 2026 Guidance
Management revised its 2026 net sales growth outlook to 4.5%-5% from 4%-5%. Organic sales growth is now projected at 3%-3.5% compared with the previous range of 2.5%-3.5%.
Adjusted earnings growth is expected to be 32.5%-35% versus 30%-35% earlier. This translates to adjusted earnings of $8.36-$8.52 per share.
Hershey continues to expect capital expenditures of $425-$475 million, interest expense of $200-$210 million and $100 million in Advancing Agility & Automation savings.
This Zacks Rank #4 (Sell) stock has dropped 5.6% over the past six months, almost in line with the industry.
Better-Ranked Stocks to Consider
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
The consensus estimate for United Natural’s current fiscal-year earnings per share (EPS) stands at $2.52, which implies substantial growth from the year-ago period earnings of 71 cents. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings implies growth of 31.6% and 64.7%, respectively, from the year-ago figures.