The Hershey Company (HSY) investor relations material

Executive summary

• Net sales grew 6.6% year-over-year in Q2 2026 to $2,787.3 million, driven by pricing actions, the LesserEvil acquisition, and robust demand, 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; adjusted EPS rose 57% to $1.90.

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

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

• Management remains confident in achieving long-term growth targets and maintaining flexibility amid macroeconomic volatility.

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 net income: $457.7M (+629.7% YoY); diluted EPS: $2.26; adjusted EPS: $1.90.

• Gross margin guidance slightly lowered to just below 400 basis points, reflecting higher logistics costs and salty segment challenges.

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.

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

• Long-term organic net sales growth algorithm for North America Confectionery remains at 2%-4%, with 2% as the starting point for 2027 due to a shorter Easter.

• Volume recovery expected as commodity inflation eases and pricing elasticities normalize, with early signs of improvement in key brands.