The Quarter in Numbers

The Hershey Company (NYSE: HSY) reported third-quarter 2026 consolidated net sales of $3,275.5 million, a 3.0% increase year over year, as aggressive pricing and the LesserEvil acquisition more than offset a double-digit volume decline driven by consumer elasticity. Organic, constant-currency net sales grew a more modest 0.8%, with approximately 11 points of net price realization dragged down by roughly 10 points of volume erosion across North America Confectionery and International.

Reported net income more than doubled to $580.8 million, or $2.88 per diluted share, up 111.8% from the prior-year period. Adjusted EPS of $2.64 rose 103.1%, boosted in part by $0.22 from tariff refunds received during the quarter. Reported gross margin expanded 1,350 basis points to 46.1%, while the adjusted (non-GAAP) gross margin improved 1,090 basis points to 42.7% — a meaningful margin recovery that will matter to foodservice ingredient buyers and snack-category operators watching input cost trajectories. Reported operating profit margin reached 25.0%, up 1,130 basis points, and adjusted operating profit margin rose 970 basis points to 23.0%.

Segment Scorecard

North America Confectionery, Hershey's largest segment at $2,656.5 million in Q3 revenue, grew reported sales 1.6% on roughly 13 points of organic price realization, but volume fell approximately 11 points amid elasticity headwinds and comparisons against a significant Reese innovation cycle in the prior year. Segment margin surged to 35.8%, up 1,400 basis points, as lower net commodity costs, productivity savings, and tariff refunds more than covered the volume shortfall and stepped-up advertising — which rose 17.1% in the quarter across both confectionery and salty snacks.

North America Salty Snacks posted the headline growth number: segment sales jumped 22.3% to $392.7 million, though roughly 20 percentage points of that gain came from the 2025 LesserEvil acquisition. Organic, constant-currency growth was 2.3%. Profitability pressures intensified — segment margin compressed to 12.1%, down 590 basis points, as higher freight, logistics, manufacturing, and commodity costs outweighed the top-line lift. Hershey's U.S. salty snacks retail takeaway (excluding LesserEvil) rose 4.0% in the 12 weeks ended September 27, extending share gains in the competitive better-for-you snack segment. The International segment remained a drag, with reported sales declining 7.5% to $226.4 million and a segment loss of $30.0 million, as volume fell roughly 14% on shipment timing, portfolio rationalization, and price elasticity.

Guidance and Outlook

Hershey lifted its 2026 full-year net sales growth outlook to approximately 5% — up from a prior range of 4.5%–5% — with LesserEvil contributing roughly 200 basis points. Organic net sales growth guidance was narrowed to approximately 3%. Full-year adjusted EPS growth guidance was raised to 36%–38.5% (from 32.5%–35%), implying adjusted diluted EPS of $8.58–$8.74. The company plans approximately $450 million in capital expenditures and expects approximately $100 million in savings from its ongoing Advancing Agility & Automation Initiative. President and CEO Kirk Tanner noted that second-half demand-creation programs are gaining momentum even as consumers grow more cautious — a dynamic with direct read-through for foodservice operators and ingredient procurement teams relying on Hershey-branded inclusions and bulk confectionery supply.

Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.