The Hershey Company (HSY) Q2 2026 Prepared Remarks earnings summary

Executive summary

• Net sales rose 6.6% year-over-year in Q2 2026 to $2,787.3 million, with organic net sales up 3.6%, driven by pricing actions and the LesserEvil acquisition despite volume declines.

• Reported net income surged 629% to $457.7 million, or $2.26 per diluted share; adjusted EPS increased 57% to $1.90, both ahead of expectations.

• Gross margin expanded to 45.3% from 30.5% year-over-year, driven by price realization, lower commodity costs, and productivity savings.

• Operating profit margin rose to 23.1% (up 1,570 bps); adjusted operating profit margin reached 20.2%.

• Full-year net sales and adjusted EPS guidance narrowed to the top half of prior outlook, reflecting strong first-half performance.

Financial highlights

• Q2 2026 net sales: $2,787.3M (+6.6% YoY); six months: $5,891.5M (+8.7% YoY); organic, constant currency net sales up 5.8% for six months.

• Q2 2026 gross margin: 45.3% (reported), 41.6% (adjusted); operating margin: 23.1% (reported), 20.2% (adjusted).

• Q2 2026 net income: $457.7M (vs. $62.7M prior year); six months: $892.8M (vs. $286.9M prior year).

• Q2 EPS (diluted): $2.26 (reported), $1.90 (adjusted); six months: $4.39 (reported), $4.25 (adjusted).

• Operating cash flow for six months: $888.1M (vs. $508.9M prior year).

Outlook and guidance

• 2026 net sales growth guidance narrowed to 4.5%-5%; organic net sales growth to 3%-3.5%.

• Full-year adjusted EPS growth expected in the upper half of the prior range at 32.5%-35%, with projected adjusted EPS (diluted) of $8.36-$8.52.

• Gross margin expansion for the year expected to be slightly below 400 basis points.

• Effective tax rate expected at 25%-27%; capital expenditures projected at $425-$475 million.

• Advancing Agility & Automation Initiative savings of ~$100 million anticipated.