Hershey raises profit outlook even as volume drops about 10 points (NYSE: HSY)

Posted by Caroline Horne on Oct 30th, 2026

What happened

The Hershey Company (NYSE: HSY) raised its 2026 earnings outlook after third-quarter adjusted earnings per share rose 103.1% to $2.64.

Net sales rose 3.0% to $3.28 billion in the quarter ended Sept. 27, from $3.18 billion a year earlier. Organic, constant-currency sales rose only 0.8%. Net price realization of about 11 points drove that growth, while volume fell about 10 points.

The release blames the volume drop on price elasticity in North America Confectionery and International. It also cites shipment timing and planned portfolio optimization in International. Growth in North America Salty Snacks partly offset the decline.

Reported net income was $580.8 million, or $2.88 per diluted share, up 111.8% from a year earlier. President and CEO Kirk Tanner said second-half demand creation initiatives are gaining momentum even as consumers grow more cautious.

Key numbers

Metric	Latest	Change	Source
Net sales, third quarter	$3.28 billion	from $3.18 billion, +3.0%	SEC 8-K, Exhibit 99.1
Organic, constant-currency net sales growth, third quarter	+0.8%		SEC 8-K, Exhibit 99.1
Reported net income, third quarter	$580.8 million	from $276.3 million, +111.8%	SEC 8-K, Exhibit 99.1
Adjusted diluted EPS, third quarter	$2.64	from $1.30, +103.1%	SEC 8-K, Exhibit 99.1
Adjusted gross margin, third quarter	42.7%	from 31.8%, +10.9 percentage points	SEC 8-K, Exhibit 99.1
Low end of 2026 adjusted EPS growth outlook	36%	from 32.5%, +3.5 percentage points	Calculated from SEC 8-K

Read more: The Hershey (HSY) company research

Where the profit came from

Price and cost savings, not volume, rebuilt the margin. Adjusted gross margin reached 42.7%, up 1,090 basis points from 31.8% a year earlier. Adjusted operating profit rose 78.5% to $754.0 million.

The release credits net price realization, productivity savings, tariff refunds and lower net commodity costs. Higher freight and logistics costs and heavier spending worked against them. Advertising and related consumer marketing rose 17.1%, and selling, marketing and administrative expenses rose 15.4%.

Reported results run higher still. Derivative mark-to-market gains added $113.4 million before tax in the quarter. They lifted reported gross margin to 46.1% from 32.6% a year earlier. Adjusted figures exclude those gains.

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How the segments split

North America Confectionery net sales rose 1.6% to $2.66 billion. About 13 points of price offset an 11-point volume decline. Segment income rose 66.2% to $949.7 million.

Hershey's U.S. candy, mint and gum retail takeaway rose 0.8% in the 12 weeks ended Sept. 27. The release says this reflects the comparison with a significant Reese innovation launch in the prior year. Hershey's share in that category declined year over year for the period.

North America Salty Snacks net sales rose 22.3% to $392.7 million, with the LesserEvil acquisition adding about 20 percentage points. Segment income fell 17.9% to $47.4 million on higher freight, logistics and manufacturing costs.

International net sales fell 7.5% to $226.4 million, and the segment posted a loss of $30.0 million.

What the raised outlook includes

Hershey now expects 2026 adjusted EPS growth of 36% to 38.5%, up from 32.5% to 35%. OptimistFi calculates that both ends of the range rose by the same 3.5 percentage points.

That outlook includes $0.22 from tariff refunds received in Q3 and $0.03 in Q2. It does not include potential future tariff refunds. Reported EPS growth is now 84% to 90%, up from 82% to 89%.

Sales guidance moved less. Net sales growth is now 5%, from 4.5% to 5%, and includes an approximately 200 basis point benefit from the 2025 LesserEvil acquisition. Organic growth is 3%, against 3% to 3.5% before, so the top of that range came down.

Organic sales grew 4.0% in the first nine months, above the 3% full-year outlook. Nine-month net sales were $9.17 billion, up 6.6%.

Why it matters

OptimistFi has argued that Hershey's value depends on passing input costs on to shoppers and defending shelf share. The equity is at risk if margins do not recover from 2025. The quarter supports the first part and strains the second, so OptimistFi reads it as mixed.

The recovery is not purely organic. The adjusted EPS outlook leans partly on tariff refunds. LesserEvil added 2.1 points to quarterly sales growth. Hershey's candy, mint and gum share declined. Higher prices carried the margin while customers bought less.

What's next

Hershey posts a pre-recorded management discussion at about 7:00 a.m. Eastern on Oct. 29. It then holds a live question and answer session with investors and analysts at 8:30 a.m. Answers on how long volume stays down and when candy share recovers bear on the weakest part of the case.

Full-year results will test the outlook. Hershey projects 2026 adjusted EPS of $8.58 to $8.74, against $6.31 in 2025. A shortfall that leans on volume or refunds would weaken the margin-recovery argument.