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Hershey's Salty Snacks Demand Is Strong: Can Supply Catch Up Soon?
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Key Takeaways
Hershey's salty snacks sales rose 22.9% in Q2, but supply constraints limited organic growth.
Retail takeaway climbed 6.5%, led by Dot's, Reese's Filled Pretzels and variety multipacks.
Automation is helping operations, with added capacity and a more optimized network expected in 2027.
The Hershey Company (HSY - Free Report) is seeing solid demand across its North America Salty Snacks portfolio, but supply constraints limited its ability to fully convert that demand into sales in the second quarter of 2026. The pressure was most evident in multipacks and Dot’s pretzels, where strong consumer interest outpaced available supply.
U.S. salty snacks retail takeaway, excluding LesserEvil, increased 6.5% during the 12 weeks ended June 28, 2026, led by Dot’s, Reese’s Filled Pretzels and variety multipacks. However, organic constant-currency net sales jumped only 0.6% in the quarter, as supply limitations and the planned reduction in private-label sales caused sales growth to trail retail takeaway.
North America Salty Snacks net sales rose 22.9% year over year to $387.8 million in the second quarter. The LesserEvil acquisition contributed approximately 22 percentage points to the increase. Organic constant-currency volume grew about 4%, but came in below expectations as innovation and velocity gains were partly offset by execution challenges involving multipacks and Dot’s pretzels. Net price realization was an approximately 3-point headwind due to higher trade investment in new item launches.
Image Source: Zacks Investment Research
Hershey has increased investment in automation and capacity to address these constraints. Automation is beginning to help operations, while additional capacity is expected to come online in 2027. The company indicated that the growing pains around Dot’s are largely behind it. Still, the supply chain is not fully optimized, and elevated freight and logistics costs are expected to persist as Hershey uses spot freight to maintain service.
The key issue now is how quickly supply execution improves against strong retail demand. Hershey expects modest margin improvement in Salty Snacks during the second half as it captures demand and optimizes the supply chain. A more fully optimized network is expected in 2027, making capacity ramp-up and logistics normalization key factors to watch as the segment works to better align shipments with consumer demand.
The Zacks Rank #3 (Hold) stock has dipped 1.9% over the past three months compared with the industry’s decline of 2.1%.
Stocks to Consider
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 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
Darling Ingredients Inc. (DAR - Free Report) , a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Darling’s current fiscal-year sales suggests an 11.5% jump from the prior-year levels. The consensus estimate for current fiscal-year EPS stands at $6.98, which implies a substantial improvement from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
Laird Superfood, Inc. (LSF - Free Report) is a consumer product company that develops, manufactures and markets plant-based, natural and functional food and beverage products. LSF currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and EPS suggests growth of 188.2% and 104 %, respectively, from the year-ago figures. LSF delivered an earnings surprise of 100% in the last reported quarter.
View the Zacks #1 Rank List
Image: Bigstock
Hershey's Salty Snacks Demand Is Strong: Can Supply Catch Up Soon?
Key Takeaways
The Hershey Company (HSY - Free Report) is seeing solid demand across its North America Salty Snacks portfolio, but supply constraints limited its ability to fully convert that demand into sales in the second quarter of 2026. The pressure was most evident in multipacks and Dot’s pretzels, where strong consumer interest outpaced available supply.
U.S. salty snacks retail takeaway, excluding LesserEvil, increased 6.5% during the 12 weeks ended June 28, 2026, led by Dot’s, Reese’s Filled Pretzels and variety multipacks. However, organic constant-currency net sales jumped only 0.6% in the quarter, as supply limitations and the planned reduction in private-label sales caused sales growth to trail retail takeaway.
North America Salty Snacks net sales rose 22.9% year over year to $387.8 million in the second quarter. The LesserEvil acquisition contributed approximately 22 percentage points to the increase. Organic constant-currency volume grew about 4%, but came in below expectations as innovation and velocity gains were partly offset by execution challenges involving multipacks and Dot’s pretzels. Net price realization was an approximately 3-point headwind due to higher trade investment in new item launches.
Image Source: Zacks Investment Research
Hershey has increased investment in automation and capacity to address these constraints. Automation is beginning to help operations, while additional capacity is expected to come online in 2027. The company indicated that the growing pains around Dot’s are largely behind it. Still, the supply chain is not fully optimized, and elevated freight and logistics costs are expected to persist as Hershey uses spot freight to maintain service.
The key issue now is how quickly supply execution improves against strong retail demand. Hershey expects modest margin improvement in Salty Snacks during the second half as it captures demand and optimizes the supply chain. A more fully optimized network is expected in 2027, making capacity ramp-up and logistics normalization key factors to watch as the segment works to better align shipments with consumer demand.
The Zacks Rank #3 (Hold) stock has dipped 1.9% over the past three months compared with the industry’s decline of 2.1%.
Stocks to Consider
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 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
Darling Ingredients Inc. (DAR - Free Report) , a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Darling’s current fiscal-year sales suggests an 11.5% jump from the prior-year levels. The consensus estimate for current fiscal-year EPS stands at $6.98, which implies a substantial improvement from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
Laird Superfood, Inc. (LSF - Free Report) is a consumer product company that develops, manufactures and markets plant-based, natural and functional food and beverage products. LSF currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and EPS suggests growth of 188.2% and 104 %, respectively, from the year-ago figures. LSF delivered an earnings surprise of 100% in the last reported quarter.