The Hershey Company (HSY) Q1 2026 (Q&A) earnings summary

Executive summary

• Net sales increased 10.6% year-over-year to $3,104.2 million in Q1 2026, with organic, constant currency growth of 7.9%, driven by favorable pricing, recent acquisitions, and strong retail sales for Hershey's and Reese's brands.

• Net income surged 94.1% to $435.1 million, or $2.13 per diluted share, reflecting higher gross profit and lower realignment costs.

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

• The acquisition of LesserEvil, LLC in November 2025 expanded the salty snacks portfolio and manufacturing capacity.

• Easter sell-through exceeded expectations despite a shorter season, with share performance ahead of internal forecasts.

Financial highlights

• Operating profit increased 73.5% to $640.7 million, with operating margin rising to 20.6%; adjusted operating profit rose 12.9% to $686.5 million.

• Gross margins are projected to increase by nearly 300 basis points in Q2 year-over-year, with over 500 basis points improvement expected in the back half.

• Snacks segment grew 5% in the quarter, with core salty brands up nearly 10%; private label continues to be a drag.

• Net cash from operating activities was $468.8 million, up $72.1 million year-over-year.

• Dividend payments totaled $288.0 million, and $69.3 million was used for share repurchases.

Outlook and guidance

• Full-year 2026 net sales growth expected at 4–5%, with organic growth of 2.5–3.5%; guidance for 2027 organic sales growth remains at 2%-4%.

• Reported EPS growth projected at 79–89%; adjusted EPS growth at 30–35%.

• Cautious approach maintained on guidance despite strong Q1, with more visibility expected by midyear.

• Sufficient liquidity is anticipated to support strategic initiatives and cash requirements in the near and long term.

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