The Hershey Company (HSY) investor relations material

Executive summary

• Q3 net sales rose 3.0% to $3,275.5M; organic constant-currency sales increased 0.8%, as ~11 points of pricing and LesserEvil growth offset volume down ~10%.

• Net income rose 110.2% to $580.8M and diluted EPS increased to $2.88; lower commodity costs, tariff refunds and favorable derivative mark-to-market results supported margin recovery.

• Management cited progress on 2026 priorities and expects improving volumes, expanded innovation and salty-business supply recovery to support growth into 2027.

Financial highlights

• Q3 gross profit rose 45.7% to $1,511M; reported gross margin expanded 1,350 bps to 46.1%, while adjusted gross margin rose 1,090 bps to 42.7%.

• Q3 operating profit increased 88.1% to $817.7M; adjusted operating profit rose 78.5% to $754.0M.

• Adjusted diluted EPS was $2.64, up 103.1%; nine-month sales rose 6.6% to $9,167.0M, with reported net income of $1,473.6M and adjusted diluted EPS of $6.89.

• Nine-month reported diluted EPS was $7.27, up 162.5%.

Outlook and guidance

• 2026 net sales growth guidance was reduced to 3%–3.5%; projected reported EPS is $8.00–$8.26 and adjusted EPS $8.58–$8.74, including $0.25 in Q2 and Q3 tariff refunds.

• 2027 sales growth outlook remains 2%–4%; the EPS framework remains low double-digit growth, excluding the $0.25 tariff refund from the 2026 base. Sustained current conditions could leave results below the original framework.

• Low-single-digit carryover pricing is planned for 2027; sales growth is expected even if volumes do not fully return to positive.

• Meaningful margin improvement is expected in 2027; mid-40% margin recovery remains a long-term ambition from 2028, subject to freight and input-cost trends.

• 2026 capex is expected at $425M–$475M; the Agility & Automation Initiative is expected to generate ~$400M in annual savings at completion, with ~$100M in 2026.