Hershey Co.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 29 October 2026: press release. Guidance figures: 6 raised, 4 lowered, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net sales rose 3.0%: Third-quarter net sales were $3,275.5 million, up 3.0%. Organic constant currency sales rose 0.8%, with LesserEvil adding 2.1 points and foreign exchange 0.1 points. Source
• Reported diluted EPS rose 111.8%: Reported net income was $580.8 million, or $2.88 per diluted share, up 111.8%. Adjusted diluted EPS was $2.64, up 103.1%. Source
• Confectionery segment income up 66.2%: North America Confectionery net sales rose 1.6% to $2,656.5 million on about 13 points of net price. Segment income was $949.7 million, a 35.8% margin, up 1,400 basis points. Source
• International segment loss deepened: International net sales fell 7.5% to $226.4 million. The segment loss was $30.0 million, a (13.3)% margin, against a loss of $13.6 million a year earlier, as higher input and manufacturing costs and lower volumes were partly offset by net price realization. Source
• Reported operating margin reached 25.0%: Reported operating profit was $817.7 million, up 88.1%, a 25.0% margin up 1,130 basis points. Adjusted operating profit was $754.0 million, a 23.0% margin, up 970 basis points. Source
• Price drove sales as volume fell: Organic sales rose 0.8% on about 11 points of net price realization. Volume declined about 10 points, reflecting elasticity in North America Confectionery and International, shipment timing and portfolio optimization. Source
• Adjusted EPS guidance raised: Adjusted diluted EPS growth now runs 36% to 38.5%, up from 32.5% to 35%. The range includes tariff refunds received in Q3 2026 and Q2 2026. Source

“Our third-quarter results show steady progress on our 2026 priorities,”

Kirk Tanner, The Hershey Company President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Net sales growth guidance moved to about 5%, from 4.5% to 5%. Source
• Guidance raised: Reported EPS growth guidance moved to 84% to 90%, from 82% to 89%. Source
• Guidance raised: Adjusted EPS growth guidance moved to 36% to 38.5%, from 32.5% to 35%. Source
• Guidance lowered: Organic net sales growth guidance moved to about 3%, from 3% to 3.5%. Source
• Guidance kept: Advancing Agility & Automation Initiative savings guidance stayed at about $100 million. Source
• New: Adjusted EPS guidance now includes tariff refunds received in Q3 2026, about $0.22 per share, and in Q2 2026, $0.03. Source

Quarterly results and EPS

• Net sales rose 3.0%: Third-quarter net sales were $3,275.5 million, up 3.0%. Organic constant currency sales rose 0.8%, with LesserEvil adding 2.1 points and foreign exchange 0.1 points. Source
• Reported diluted EPS rose 111.8%: Reported net income was $580.8 million, or $2.88 per diluted share, up 111.8%. Adjusted diluted EPS was $2.64, up 103.1%. Source
• Nine-month sales and adjusted EPS: Nine-month net sales were $9,167.0 million, up 6.6%, with organic constant currency growth of 4.0%. Nine-month adjusted diluted EPS was $6.89, up 49.1%. Source
• Nine-month reported net income up 162.5%: Nine-month reported net income was $1,473.6 million, or $7.27 per diluted share, compared with $2.77 a year earlier. Source

Segment and region performance

• Confectionery segment income up 66.2%: North America Confectionery net sales rose 1.6% to $2,656.5 million on about 13 points of net price. Segment income was $949.7 million, a 35.8% margin, up 1,400 basis points. Source
• Salty Snacks sales up on LesserEvil: North America Salty Snacks net sales rose 22.3% to $392.7 million. Segment income fell 17.9% to $47.4 million, attributed to higher freight, logistics and manufacturing costs, commodity costs and consumer marketing. Source
• International segment loss deepened: International net sales fell 7.5% to $226.4 million. The segment loss was $30.0 million, a (13.3)% margin, against a loss of $13.6 million a year earlier, as higher input and manufacturing costs and lower volumes were partly offset by net price realization. Source
• Corporate expense up 10.3%: Unallocated corporate expense was $213.1 million, up 10.3%, driven by continued investments in capabilities and technology. Source

“Our second-half demand creation initiatives are gaining momentum, even as consumers grow more cautious.”

Kirk Tanner, The Hershey Company President and Chief Executive Officer

Margins, costs and pricing

• Reported gross margin reached 46.1%: Reported gross margin was 46.1% against 32.6% a year earlier. Adjusted gross margin was 42.7%, up 1,090 basis points, with the gap mainly reflecting derivative mark-to-market gains. Source
• Price, savings and refunds lifted margin: Net price realization, productivity savings, tariff refunds and lower net commodity costs more than offset lower volume and higher freight and logistics expenses. Source
• Advertising and admin spend rose: Selling, marketing and administrative expense rose 15.4%. Advertising and consumer marketing rose 17.1%, with double-digit increases in both North America segments. Source
• Reported operating margin reached 25.0%: Reported operating profit was $817.7 million, up 88.1%, a 25.0% margin up 1,130 basis points. Adjusted operating profit was $754.0 million, a 23.0% margin, up 970 basis points. Source
• Effective tax rate held at 24.4%: Reported and adjusted effective tax rates were both 24.4%. The reported rate fell 130 basis points, driven by commodity hedge effects on foreign rate differentials. Source

Volume and retail takeaway

• Price drove sales as volume fell: Organic sales rose 0.8% on about 11 points of net price realization. Volume declined about 10 points, reflecting elasticity in North America Confectionery and International, shipment timing and portfolio optimization. Source
• Candy takeaway compared with Reese launch: Candy, mint and gum takeaway was measured against a significant Reese innovation launch in the prior year. Source
• Salty Snacks volume and share gains: Salty Snacks volume rose about 1 point on demand growth and retailer inventory replenishment, and the company reported further gains in salty snack market share. Source

Guidance and comparability items

• Adjusted EPS guidance raised: Adjusted diluted EPS growth now runs 36% to 38.5%, up from 32.5% to 35%. The range includes tariff refunds received in Q3 2026 and Q2 2026. Source
• Organic sales guidance lowered: Organic net sales growth guidance is about 3%, against 3% to 3.5%, while total net sales growth moved to about 5%. Source
• Items hit quarterly comparability: GAAP results included items negatively impacting comparability of $63.7 million, or $0.24 per share, after $113.4 million of pre-tax derivative mark-to-market gains. Source
• Acquisition integration costs rose: Acquisition and integration-related costs were $36.4 million pre-tax in Q3, against $1.6 million a year earlier, covering LesserEvil and Sour Strips integration. Source
• Business realignment charges continue: Business realignment charges were $13.3 million pre-tax in Q3, mainly severance, employee benefit and third-party costs under the Advancing Agility & Automation Initiative. Source
• Nine-month mark-to-market swing: Nine-month derivative mark-to-market gains were $186.1 million, compared with $387.9 million of losses a year earlier. Source

Cash, balance sheet and capital

• Cash declined, receivables rose: Cash and equivalents were $676.7 million at September 27, 2026, down from $925.9 million at December 31, 2025. Trade receivables rose to $1,113.4 million from $729.5 million. Source
• Total debt declined: Short-term, current and long-term debt totaled about $5.13 billion, down from about $5.40 billion at year-end 2025. Source
• Inventories and payables increased: Inventories rose to $1,608.8 million from $1,429.3 million, and accounts payable rose to $1,414.9 million from $1,255.7 million. Source
• Diluted share count declined: Diluted common shares averaged 201.7 million in the quarter, down from 203.5 million in the prior-year quarter. Source

Coming up, as management said on 29 October 2026

• Live investor Q&A at 8:30 a.m.: A live question and answer session with investors and financial analysts follows a pre-recorded management discussion posted at 7:00 a.m. today. Source
• Future tariff refunds not in guidance: The company said its updated guidance does not include potential future tariff refunds. Source

Figures management reported

Risks management discussed

• Demand: International volume fell about 14%, with price elasticity, shipment timing and portfolio rationalization cited as causes. Source
• Demand: Share in U.S. candy, mint and gum declined year over year for the 12-week period. Source
• Demand: Salty Snacks organic sales trailed retail takeaway because of planned lower sales to private label customers. Source

Earlier plans management reported on

• On track: Management said it remains on track for solid sales growth, a margin and earnings recovery, and disciplined investment. Source
• Not stated: In the prior quarter, management tied its full-year financial commitments to cost visibility and operating flexibility.

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.