01—Abstract
Summary
Summary of the 10-Q filed April 30, 2026. Cited figures are marked; the original filing is the authoritative source.
The Hershey Company's first quarter 2026 (quarter ended March 29, 2026) showed strong top- and bottom-line growth.
Net sales rose to $3,104.2 milliona from $2,805.4 million, an increase of $298.8 million, or 10.6%, driven mainly by favorable price realization of approximately 10%, a 2% benefit from the LesserEvil acquisition, and a 1% foreign currency benefit, partially offset by a volume decrease of approximately 2%. Gross margin expanded to 39.4% from 33.7%, and operating profit rose to $640.7 million from $369.2 million. Net income was $435.1 million, or $2.13 per diluted share, versus $224.2 million, or $1.10, a year earlier.
Beneath the consolidated results, segment performance was mixed. North America Confectionery net sales grew 8.3% to $2,489.9 millionb with segment income up 13.8%, while volume declined approximately 4%. North America Salty Snacks sales rose 26.0%, largely from LesserEvil, but segment income fell 18.1% to $34.3 million on higher supply chain costs, including a voluntary temporary product withdrawal.
International segment income fell 46.8% to $15.3 millionc despite 16.1% sales growth. Management continues to cite higher commodity, tariff and supply costs as pressures, and notes that cocoa futures prices averaged $1.86 per pound in the quarter, down approximately 49% from the 2025 annual average of $3.64. Cash generation and liquidity remained solid.
Operating cash flow was $468.8 milliond, and cash and cash equivalents stood at $877.0 million at quarter end against total debt of $5.2 billion on the balance sheet. The company paid $288.0 million in dividends and repurchased $69.3 million of stock, and it expects 2026 capital expenditures of approximately $425 million to $475 million. Management says it has sufficient liquidity for both short- and long-term needs, and it flagged ongoing uncertainty from tariffs, the Middle East conflict and possible refund requests following a February 20, 2026 ruling.
02—Key points
Key Highlights
- Net sales of $3,104.2 million, up 10.6% from $2,805.4 million, with price realization of approximately 10% offsetting a volume decrease of approximately 2%.
- Gross margin of 39.4%, up from 33.7%, and operating profit of $640.7 million, up 73.5% from $369.2 million.
- Net income of $435.1 million, up 94.1%, and diluted EPS of $2.13 versus $1.10 a year earlier.
- North America Salty Snacks sales rose 26.0% (LesserEvil contributed approximately 20%), but segment income fell 18.1% to $34.3 million on higher supply chain costs and a voluntary temporary product withdrawal.
- International segment income fell 46.8% to $15.3 million, driven by higher commodity and manufacturing costs and advertising investment, despite favorable pricing.
- Operating cash flow of $468.8 million; cash and equivalents of $876,976 thousand at March 29, 2026; dividends paid of $288.0 million and share repurchases of $69.3 million.
- Management expects 2026 capital expenditures of approximately $425 million to $475 million; the $500 million 2.300% Notes due August 15, 2026 are classified as current.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Hershey kept $0.14.
- Revenue$3.10B100.0%
- Cost of revenue−$1.88B60.6%
- Gross profit$1.22B39.4%
- Operating costs−$582.0M18.8%
- Operating income$640.7M20.6%
- Interest, other & tax−$205.6M6.6%
- Net income$435.1M14.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 30, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $3.10B$2.81B | +10.6% |
| Cost of Revenue | $1.88B$1.86B | +1.1% |
| Gross Profit | $1.22B$944.27M | +29.5% |
| SG&A Expenses | $576.04M$558.67M | +3.1% |
| Operating Income | $640.69M$369.22M | +73.5% |
| Interest Expense | $56.88M$54.92M | +3.6% |
| Net Income | $435.11M$224.20M | +94.1% |
05—Questions
Frequently Asked Questions
What drove the increase in Hershey's first quarter 2026 profitability?
Higher gross profit was the main driver. Net sales rose $298.8 million on favorable price realization of approximately 10%, and gross margin improved to 39.4% from 33.7%, helped by supply chain productivity and transformation program savings. Business realignment costs also fell to $6.0 million from $16.4 million, while SM&A expenses rose 3.1% to $576.0 million.
Which segments are weakening, and why?
Salty Snacks segment income fell 18.1% to $34.3 million due to higher supply chain costs, including a voluntary temporary product withdrawal, and higher SM&A expenses. International segment income fell 46.8% to $15.3 million on higher commodity and manufacturing costs and advertising investment. North America Confectionery segment income grew 13.8% to $792.4 million, though volume declined approximately 4%.
How is the company's liquidity and debt position?
At March 29, 2026, cash and cash equivalents were $877.0 million and total short- and long-term debt was $5.4 billion, with $504.1 million classified as current. Management believes it can meet obligations through operating cash flow, new debt issuance and its $1.875 billion unsecured revolving credit facility, and it states it had no outstanding commercial paper at quarter end.
What external risks does management highlight?
Management cites higher manufacturing and supply costs, changes in global trade policies including tariffs, and the conflict in the Middle East. It expects tariff expense to continue to negatively affect results and says it is assessing potential tariff refunds following a February 20, 2026 ruling under the International Emergency Economic Powers Act. Cocoa prices have improved, with the average futures price down approximately 49% from the 2025 annual average.
How much capital is the company returning to shareholders?
Dividends paid totaled $288.0 million in the quarter, with $1.452 per share on Common Stock and $1.320 per share on Class B Common Stock. The company repurchased $69.3 million of stock, all used to offset shares issued under incentive compensation plans, and about $470 million remains available under its December 2023 repurchase authorization.
06—Continue