HERSEY, PA. – Hershey Co. seeing better sales and execution of the One Hershey go-to-market model, president and chief executive officer Kirk Tanner said when reporting sales and earnings results for the third quarter of fiscal 2026.
“As we enter the final quarter of 2026, we are making significant progress against the commitments we made at the beginning of the year,” Tanner said. “We delivered the recovery of margins and earnings as expected, increased investment behind our brands and capabilities and strengthened our portfolio for long-term growth. This progress reflects disciplined execution across the organization and resulted in solid third quarter results.”
For the quarter ended September 27, net income jumped 110% to $580.81 million, equivalent to $2.88 per share in common stock, from $276.32 million, or $1.36 per share, a year earlier. Excluding the impact of mark-to-market gains and business realignment, acquisition and integration activities, adjusted net earnings more than doubled to $532.73 million, or $2.64 per share, from $263.7 million, or $1.30 per share, a year ago. At the high end, Wall Street had forecast adjusted earnings per share of $2.23.
“The adjusted EPS is up 103% year over year to $2.64, including 22¢ of rate refunds, and reflected chocolate cost recovery and hedge time, price, brand reinvestment and productivity gains we expected,” said Tanner.
Net sales rose 3% to $3.28 billion from $3.18 billion a year ago. Organic net sales (constant currency) were up 0.8%, as net price realization of 11% was largely offset by a 10% volume/mix decline. Hershey attributed the lower volume to the impact of elasticity in the North American Confectionery and International segments, delivery times and planned portfolio optimization in International, partially offset by growth in North American Salty Snacks. Meanwhile, the 2025 acquisition of organic salty snack maker LesserEvil provided a top-line lift of 2.1%.
“Our performance reinforces the resilience of our category, the agility of our team and the strength of our brand,” Tanner said. “At the same time, the operating environment is becoming more challenging as consumers manage the cumulative pressures of higher gas prices, inflation and interest rates. As September progresses, we see consumers becoming more intentional about spending, especially in the channels most affected by higher gas prices like convenience stores, where the US candy, gum and mint category declined by almost 5% this month, although the snack segment continued to grow through October. The category remains quite good.”
Strategic action was taken
Tanner noted Hershey is “encouraged by early signs of momentum building” as it focuses on plans to create second-half demand. He cited the impact of the launch of One Hershey in mid-March, which combines the sweet, salty and protein businesses in the US commercial operating model. This includes the retailer’s Total Snacking Advisership framework, where the company acts as a “total snacking advisor” to retail stores rather than managing and selling brands separately.
“Our One Hershey go-to-market model strengthens sales and execution on key programs,” he said. “Retailers recognize our value and share our passion, with our Total Snacking Advisership now expanding to six retailers this year. Our Pokemon partnership helped boost back-to-school sales by 68% across cakes and salty snacks. Hershey The film also received a lot of customer support, with commercial plans exceeding initial expectations.
Tanner described Halloween participation as “in line with 2025” but said financial pressures could affect the final purchase decision.
“As expected, the compressed calendar affects the pace of the season,” he said. “We are optimistic that enhanced variety, new package types and value propositions, seasonal innovations and increased investment will drive engagement in these final days leading up to this weekend’s festivities.”
Third-quarter net sales from North American Confectionery rose 1.6% year-over-year to $2.66 billion, with organic sales (constant currency) up 2.3% on a 13% price increase and an 11% volume/mix decrease, which Hershey said reflected stronger quarter-to-quarter price elasticity and shipment variability than shipping.
“Our innovation is performing well and addressing significant portfolio opportunities,” Tanner said. “The Hershey Crème Filled Bar is off to a strong start. It’s the No. 1 innovation in the category for the past four weeks, with momentum in the top quartile in our target channels. Reese’s Oreo continues to perform strongly in its second year, reaching 11% household penetration and a 44% repeat rate, a testament to the platform’s durability.”
Tanner also pointed to new campaigns for Cadbury, Payday and FulFil, which follow new campaigns for the Hershey and Reese’s brands earlier this year.
Hershey said North American Salty Snacks sales rose 22% in the third quarter, lifted by the acquired LesserEvil brand, but supply challenges affected Dot’s Pretzels and multipacks.
| Photo: ©JAMMER GENE – STOCK.ADOBE.COM“Cadbury’s early signals are promising, with the pace, unit sales and market share accelerating in the four weeks ending October 11,” he said. “We’re also modernizing our Halloween marketing, leading with Reese’s, by adding the brand to the culture with more early season and social engagement. Season to date, Reese’s Halloween item sales are up 13%, driving an 80 basis point gain in seasonal sales.
Tanner said Hershey’s efforts resulted in “healthy consumption trends,” as quarterly U.S. retail sales of non-seasonal candy, mints and chewing gum rose 2% and two-year growth rose to nearly 4% from 2.5% in the first half.
“In fact, outside of c-stores, Hershey’s retail sales of non-seasonal candy, mints and chewing gum grew by 3.7% compared to last year, highlighting the category’s relevance, distribution reach, and brand strength and innovation,” he said. “From a volume perspective, while total confectionery volume was impacted by last year’s strong Oreo Reese’s launch, unit trends improved as we began 2025 price action in our non-seasonal portfolio. In the third quarter, units were down moderately across nearly half of our chocolate brands versus the first half, including top brands like Hershey, Kits, and Kisses.”
Supply issues at Salty Snacks
Net sales for North America Salty Snacks rose 22% in the quarter to $392.68 million, reflecting a 20% boost from LesserEvil. Organic sales (constant currency) rose 2.3% with a 1% increase in price and a 1% volume/mix gain from demand growth and retailer inventory replenishment, partially offset by reduced private label production, Hershey said.
“Turning to North America Salty Snacks, third quarter results remained constrained by sourcing challenges for Dot’s Pretzels and multipacks,” Tanner said. “Service levels improved from the second quarter but were slower than expected, limiting sales and further pressuring operating margins. Importantly, consumer demand remained strong, with third quarter retail sales for the Dot brand up 9%.
International segment net sales fell nearly 8% to $226.37 million in the quarter, with organic sales (constant currency) down nearly 10% on a 4% price increase and a 14% volume/mix decline.
Hershey refined its fiscal 2026 guidance. The company now projects adjusted EPS of $8.58 to $8.74, reporting net sales growth of 5% and organic sales growth of 3%. That compares with the previous outlook for adjusted EPS of $8.36 to $8.52, reporting net sales growth of 4.5% to 5% and organic sales growth of 3% to 3.5%.