The Hershey Company (HSY) Q1 2026 Prepared Remarks earnings summary

Executive summary

• Net sales rose 10.6% year-over-year to $3,104.2 million in Q1 2026, driven by favorable pricing, strong core and new product performance, and the LesserEvil acquisition.

• Organic constant currency net sales increased 7.9%, supported by brand investment, innovation, and retail execution.

• Net income nearly doubled to $435.1 million, with diluted EPS up 93.6% to $2.13 and adjusted EPS up 12.4% to $2.35, reflecting higher gross profit and lower realignment costs.

• Gross margin expanded to 39.4% from 33.7% due to price realization, partially offset by higher commodity and tariff costs.

• The company completed the acquisition of LesserEvil, expanding its salty snacks portfolio and manufacturing capacity.

Financial highlights

• Adjusted earnings per share increased 12.4% in Q1; adjusted gross margin was 40.4%, down 80 basis points due to higher commodity and tariff costs.

• Operating profit rose 73.5% to $640.7 million; adjusted operating profit up 12.9% to $686.5 million.

• Net price realization was approximately 10%, with volume declines offset by earlier shipment timing.

• Advertising and marketing investments rose 6% in Q1, with double-digit growth expected for the full year.

• Capital expenditures were $115 million, down $31 million year-over-year; dividend increased 6%.

Outlook and guidance

• Full-year 2026 net sales growth expected at 4–5%, with organic net sales growth of 2.5–3.5%.

• Adjusted EPS growth projected at 30–35%; reported EPS growth at 79–89%.

• Gross margin recovery anticipated from Q2, with a full-year improvement of ~400 basis points.

• Capital expenditures forecasted at $425–475 million; interest expense at $200–210 million.

• Advancing Agility & Automation Initiative expected to deliver $100 million in savings.