Key Highlights

  • Net sales of USD 3.28 billion rose 3.0% and topped the consensus estimate of USD 3.25 billion for the quarter.
  • Earnings per share of USD 2.64 beat the consensus estimate of USD 2.11, while GAAP diluted EPS was USD 2.88.
  • Gross Margin reached 46.1% versus 32.6% a year earlier, helped by pricing, lower Commodity costs and Tariff refunds.
  • Price realization added about 11% to sales, while Volume fell about 10% across North America Confectionery and International.

The Hershey Company (NYSE:HSY) reported third quarter 2026 net sales of USD 3.28 billion, up 3.0% from USD 3.18 billion and above the consensus estimate of USD 3.25 billion. Earnings Per Share of USD 2.64 compared with a consensus estimate of USD 2.11, while GAAP Diluted Earnings per Share were USD 2.88 versus USD 1.36 a year earlier. Net Income was USD 580.8 million versus USD 276.3 million.

Price realization added roughly 11 points to sales and the LesserEvil Acquisition added about 2 points, offset by a volume decline of about 10%. Chief Executive Officer Kirk Tanner said the Hershey Brand grew 7% over the last 13 weeks and pointed to a 2027 innovation pipeline that is 50% larger than in 2026.

Margin Expansion and Segment Detail

Gross profit rose 45.7% to USD 1.51 billion, lifting gross margin by 1,350 basis points. Cost of sales fell USD 379.6 million, with lower commodity costs, savings from the AAA Initiative, tariff refunds and USD 49.1 million of favorable derivative mark-to-market activity, partly offset by USD 36.2 million of higher freight and logistics expense. Operating profit climbed 88.1% to USD 817.7 million, a margin of 25.0%. Selling, Marketing and administrative expense rose 15.4% to USD 692.8 million.

North America Confectionery sales rose 1.6% to USD 2.66 billion on about 13% price realization, offset by an 11% volume drop, and segment income rose to USD 949.7 million. North America Salty Snacks sales grew to USD 392.7 million from USD 321.0 million, though segment income slipped to USD 47.4 million from USD 57.7 million. International sales fell to USD 226.4 million and the segment posted a loss of USD 30.0 million.

Outlook Commentary and Cost Pressures

Management said it is holding its 2027 net sales growth outlook of 2% to 4%, and that weaker consumer conditions would place results in the lower part of that range. The chief financial officer said the 2027 earnings framework of low double digit growth has not changed apart from higher freight, logistics and non-cocoa input costs, and that growth would be measured excluding a USD 0.25 per share tariff refund in the 2026 base. Full year brand Investment is projected at around 10%, with a mid 40% margin targeted over the long term.

Management described convenience stores as the soft spot, with the category down 5% there in September and the weakness continuing into October, while the remaining channels grew 3.7% in the third quarter. Nine month Operating Cash Flow was USD 1.64 billion, with USD 859.2 million paid in dividends and USD 439.4 million spent on share repurchases.

Items That Frame the Fourth Quarter and 2027

The company has pointed to several markers. The convenience store category trend of down 5% frames fourth quarter volume, alongside tougher comparisons against Reese's Oreo from September onward. Halloween fell on a Saturday, and the CEO said about 35% of seasonal sales had occurred in the final week before the holiday, with the biggest selling days still ahead at the time of the call.

Other dated points include a Hershey movie release the day before Thanksgiving, new Manufacturing lines for salty snacks starting in the first half of 2027, and a fuller update on volume cadence in the February full year outlook.