The Hershey Company (HSY) Q2 2026 Prepared Remarks earnings summary

Executive summary

• Net sales for Q2 2026 rose 6.6% year-over-year to $2,787.3 million, driven by pricing actions and the LesserEvil acquisition, despite volume declines in core segments.

• Reported net income surged 629% to $457.7 million, or $2.26 per diluted share; adjusted EPS increased 57% to $1.90.

• Gross margin expanded to 45.3% from 30.5% year-over-year, reflecting price realization, lower commodity costs, and productivity savings.

• Strategic investments in brands, merchandising, and innovation are being increased, with a 30% year-over-year rise in brand investment planned for the second half.

• The company is confident in navigating evolving market conditions due to strong cost visibility and operating flexibility.

Financial highlights

• Q2 2026 net sales: $2,787.3M (+6.6% YoY); six months: $5,891.5M (+8.7% YoY); organic net sales up 3.6% in Q2 and 5.8% for six months.

• Q2 2026 gross margin: 45.3% (vs. 30.5% prior year); operating margin: 23.1% (vs. 7.4%); adjusted gross margin expanded 350 basis points.

• Q2 2026 net income: $457.7M (vs. $62.7M); six months: $892.8M (vs. $286.9M); adjusted EPS Q2: $1.90, six months: $4.25.

• Operating cash flow for six months: $888.1M (vs. $508.9M prior year).

• Q2 reported and adjusted effective tax rates were 22.2% and 24.2%, respectively.

Outlook and guidance

• 2026 net sales growth guidance narrowed to 4.5%-5%; organic net sales growth to 3%-3.5%.

• Reported EPS growth expected at 82%-89%; adjusted EPS growth at 32.5%-35%, with projected adjusted EPS (diluted) of $8.36-$8.52.

• Effective tax rate expected at 25%-27%; capital expenditures projected at $425-$475 million.

• Advancing Agility & Automation Initiative savings of ~$100 million anticipated.

• Third quarter EPS growth is anticipated to be the strongest of the year due to favorable pricing versus commodity costs.