The Hershey Company (HSY) Q3 2026 Prepared Remarks earnings summary

Executive summary

• Q3 net sales rose 3.0% to $3,275.5 million; organic, constant-currency sales increased 0.8%.

• Adjusted diluted EPS increased 103.1% to $2.64; reported diluted EPS was $2.88, as higher gross profit more than offset higher expenses.

• Margin recovery advanced alongside increased brand and capability investment; portfolio priorities and second-half demand initiatives supported long-term growth plans.

Financial highlights

• Q3 net sales growth reflected ~11% favorable price realization and ~2% from LesserEvil, partly offset by ~10% lower volume; organic sales rose 0.8%.

• Adjusted gross margin expanded 10.9 percentage points to 42.7%; pricing, productivity, tariff refunds and net input cost deflation contributed.

• Q3 reported gross profit was $1.511 billion, operating profit rose 88.1% to $817.7 million, and net income increased 110.2% to $580.8 million.

• Adjusted EPS benefited from cocoa hedge timing, tariff refunds, productivity and cost savings, partly offset by higher logistics, freight and manufacturing costs.

• Advertising and related consumer marketing increased ~17%; adjusted operating expenses excluding advertising rose ~5% on capability and technology investment.

Outlook and guidance

• FY 2026 net sales growth guidance is 3%–3.5%; organic sales growth is expected at ~3%, with LesserEvil contributing ~200 bps to reported growth.

• Adjusted EPS growth guidance is 32.5%–35%, including tariff refunds; projected adjusted diluted EPS is $8.58–$8.74.

• Adjusted gross margin expansion is expected at ~370 bps including tariff refunds and ~330 bps excluding them; the adjusted tax rate outlook is ~25%.

• 2027 outlook remains top-line growth in line with the long-term algorithm and low-double-digit adjusted EPS recovery, excluding the $66 million, or $0.25 per share, 2026 tariff-refund benefit.

• Freight, logistics, broader inflation and consumer pressure could restrain 2027 growth versus March expectations; cocoa cost deflation is visible.