The Hershey Company (HSY) Q2 2026 (Q&A) earnings summary

Executive summary

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

• Reported net income surged 629.7% to $457.7 million in Q2 2026, with diluted EPS up to $2.26 from $0.31 in Q2 2025.

• Gross profit rose 58.7% and operating profit increased 233.3% year-over-year, reflecting improved margins and lower realignment costs.

• Strong price realization, productivity savings, and effective merchandising offset higher logistics and capability investments.

• Six-month net sales increased 8.7% to $5,891.5 million; reported net income up 211.3% to $892.8 million.

Financial highlights

• Q2 2026 net sales: $2,787.3M (+6.6% YoY); six months: $5,891.5M (+8.7% YoY).

• Q2 reported gross margin expanded to 45.3% from 30.5% last year; adjusted gross margin up 350 bps to 41.6%.

• Q2 reported operating profit was $642.6 million (233.3% increase); adjusted operating profit $563.5 million (37.3% increase).

• Q2 reported EPS $2.26; adjusted EPS $1.90.

• Q2 effective tax rate: 22.2% (reported), 24.2% (non-GAAP); cash and cash equivalents: $791.2M at June 28, 2026.

Outlook and guidance

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

• 2026 reported EPS projected at $7.89–$8.17; adjusted EPS at $8.36–$8.52.

• Long-term organic net sales growth algorithm for North America Confectionery remains at 2%-4%; 2027 expected to start at 2% due to a shorter Easter.

• Good visibility into cocoa cost deflation for 2027, with hedging strategies in place to capture further benefits if prices normalize.

• Management expects continued supply chain and inflationary pressures but believes liquidity is sufficient for strategic initiatives.