01—Abstract
Summary
Summary of the 10-Q filed July 30, 2026. Cited figures are marked; the original filing is the authoritative source.
The Hershey Company's second-quarter 2026 results (three months ended June 28, 2026) showed net sales of $2.79 billiona, up from $2.61 billion a year earlier, with net income of $457.7 million, or $2.26 per diluted share, versus $62.7 million, or $0.31, in the prior-year quarter.
The filing states that net sales growth was driven primarily by favorable price realization of approximately 12%, partially offset by a volume decrease of approximately 8%, with LesserEvil contributing approximately a 3% benefit. Gross margin rose to 45.3% from 30.5%, reflecting favorable net price realization and AAA Initiative savings, partly offset by supply chain costs and volume declines. The prior-year quarter included $523.7 millionb of decreases in cost of sales tied to lower volume and savings, while commodity mark-to-market activity was a $117.4 million favorable item in cost of sales for the quarter.
For the first six months, net sales were $5.89 billionc, up 8.7%, and net income was $892.8 million, or $4.39 per diluted share. Cash generated from operating activities was $888.1 million, up from $508.9 million, while capital additions were $204.4 million. Cash and cash equivalents ended the period at $791.2 million, and total short- and long-term debt was $5.6 billion, including $504.2 million of current long-term debt, of which $500 million of 2.300% Notes mature on August 15, 2026.
The company repurchased $439.4 milliond of common stock in the first half and approved an additional $500 million share repurchase authorization in June 2026, with about $270 million remaining under the December 2023 program. Management noted continued macroeconomic and geopolitical uncertainty, including tariffs and the conflict in the Middle East, and cocoa prices declined to an average of $1.80 per pound in the first half of 2026.
02—Key points
Key Highlights
- Net income for Q2 2026 was $457.7 million ($2.26 diluted EPS), compared with $62.7 million ($0.31) in Q2 2025.
- Q2 2026 net sales were $2,787.3 million, up 6.6%, driven by approximately 12% favorable price realization, partly offset by approximately 8% lower volume.
- Gross margin expanded to 45.3% from 30.5%, and operating profit margin rose to 23.1% from 7.4%.
- Six-month operating cash flow was $888.1 million, versus $508.9 million a year earlier, while capital additions were $204.4 million.
- The company repurchased $439.4 million of common stock in the first six months and authorized an additional $500 million repurchase program in June 2026.
- Total short- and long-term debt was $5.6 billion at June 28, 2026, with $500 million of 2.300% Notes due August 15, 2026.
- Full-year 2026 capital expenditures, including capitalized software, are expected to be in the range of approximately $425 million to $475 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Hershey kept $0.16.
- Revenue$2.79B100.0%
- Cost of revenue−$1.52B54.7%
- Gross profit$1.26B45.3%
- Operating costs−$620.7M22.3%
- Operating income$642.6M23.1%
- Interest, other & tax−$185.0M6.6%
- Net income$457.7M16.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 30, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $2.79B$2.61B | +6.6% |
| Cost of Revenue | $1.52B$1.82B | −16.2% |
| Gross Profit | $1.26B$796.27M | +58.7% |
| SG&A Expenses | $620.55M$603.21M | +2.9% |
| Operating Income | $642.64M$192.81M | +233.3% |
| Interest Expense | $57.81M$60.45M | −4.4% |
| Net Income | $457.67M$62.72M | +629.7% |
05—Questions
Frequently Asked Questions
What drove the large increase in Hershey's second-quarter 2026 profitability?
The filing attributes the increase primarily to higher gross profit, which reflected favorable net price realization, AAA Initiative savings, and a $117.4 million favorable mark-to-market impact on commodity derivatives in cost of sales, partly offset by unfavorable supply chain costs and volume declines. Lower business realignment costs also contributed, while SM&A expenses increased 2.9%.
How much did volume and pricing contribute to net sales growth?
In the second quarter, net sales rose $172.6 million, or 6.6%, reflecting favorable price realization of approximately 12% and a LesserEvil acquisition benefit of approximately 3%, offset by a volume decrease of approximately 8%. The filing notes minimal foreign currency impact.
How is Hershey's liquidity and debt position?
Cash and cash equivalents were $791.2 million at June 28, 2026, down $134.7 million from year-end 2025. Total short- and long-term debt was $5.6 billion, and the company stated it was in compliance with credit facility covenants and believes it has sufficient liquidity. It holds a $1.875 billion unsecured revolving credit facility and had $264.3 million of U.S. commercial paper outstanding at a weighted average rate of 3.7%.
What are the key risks and uncertainties highlighted in the filing?
The filing cites changes in global trade policies including tariffs, the conflict in the Middle East, higher manufacturing, logistics and supply chain costs, and potential inflation. It also notes price elasticity contributing to volume declines in confectionery, and a decline in U.S. candy, mint and gum consumer takeaway of 8.6% in the second quarter.
06—Continue