Hershey raises 2026 profit forecast as Q3 earnings more than double

The Hershey Company (HSY) reported third-quarter 2026 sales and earnings on Oct. 29 and raised its full-year adjusted earnings per share growth forecast, the company said in an 8-K filing.

Net sales for the quarter ended Sept. 27 rose 3.0% to $3,275.5 million. Organic, constant currency net sales increased 0.8%.

Here's how the company did:

• Net sales: $3,275.5 million, up 3.0% from a year earlier
• Reported net income: $580.8 million vs. $276.3 million a year earlier
• Reported EPS, diluted: $2.88, up 111.8% from $1.36 a year earlier
• Adjusted EPS, diluted: $2.64 vs. $1.30 a year earlier, up 103.1%

Net price realization added approximately 11 points to sales, while volume fell approximately 10 points. The company cited price elasticity in North America Confectionery and International, along with shipment timing and planned portfolio optimization in International.

The LesserEvil acquisition added 2.1 points to sales growth in the quarter.

Reported gross margin was 46.1%, compared with 32.6% a year earlier, an increase of 1,350 basis points. The company said derivative mark-to-market gains, tariff refunds and productivity program savings drove the increase.

“Our third-quarter results show steady progress on our 2026 priorities,” said President and Chief Executive Officer Kirk Tanner. “We remain on track to deliver solid sales growth, a meaningful recovery in margin and earnings, and disciplined investment to fuel our next chapter of growth.”

2026 guidance

The company now expects reported EPS growth of 84% to 90%, up from 82% to 89% previously. Adjusted EPS growth is now forecast at 36% to 38.5%, up from 32.5% to 35%.

On a dollar basis, projected 2026 reported diluted EPS is $8.00 to $8.26, and projected adjusted diluted EPS is $8.58 to $8.74. The outlook does not include potential future tariff refunds.

The adjusted figure includes approximately $0.22 from tariff refunds received in the third quarter of 2026 and $0.03 from the second quarter. The company also expects an effective tax rate of approximately 25%, interest expense of approximately $200 million and capital expenditures of approximately $450 million.

For the nine months, net sales were $9,167.0 million, up 6.6%, and adjusted diluted EPS was $6.89, up 49.1%.

According to its SEC filings, net income rose in each of the last three quarters, from $276.3 million in the third quarter of 2025 to $457.7 million in the second quarter of 2026.

Segment results

North America Confectionery net sales were $2,656.5 million, up 1.6%. Segment income rose 66.2% to $949.7 million, and the company cited net price realization, productivity savings and tariff refunds.

North America Salty Snacks net sales were $392.7 million, up 22.3%. Segment income fell 17.9% to $47.4 million, which the company attributed to higher freight, logistics and manufacturing costs, higher net commodity costs and higher consumer marketing investments.

International net sales were $226.4 million, down 7.5%. The segment loss widened to $30.0 million from $13.6 million a year earlier, as higher input and manufacturing costs and lower volumes outweighed net price realization.

Costs and charges

Selling, marketing and administrative expenses rose 15.4%. Unallocated corporate expense was $213.1 million, up 10.3%, driven by investments in capabilities and technology.

Items affecting comparability in the quarter included derivative mark-to-market gains of $113.4 million pre-tax, business realignment costs of $13.3 million and acquisition and integration-related costs of $36.4 million.

The company will host a live question and answer session with investors and analysts at 8:30 a.m. Eastern time on Oct. 29, according to the release.