HERSHEY CO has recently released its latest 10-Q report for the quarter ended June 28, 2026. The Hershey Company makes confectionery products and pantry items in the U.S. and abroad, operating in three segments: North America Confectionery, North America Salty Snacks, and International. Its portfolio includes chocolate and non-chocolate confectionery, gum and mint products, protein bars, pantry items, and snack foods sold under brands such as Hershey’s, Reese’s, Kisses, Kit Kat, SkinnyPop, Dot’s Homestyle Pretzels, and ONE Bar.
In Item 2, management said the first six months of 2026 brought net sales growth, driven mainly by pricing actions and continued demand, even as the company faced higher manufacturing, logistics, and supply chain costs. Hershey also pointed to commodity price volatility, especially cocoa, and said tariffs, retaliatory tariffs, tariff refunds, and geopolitical uncertainty remain active variables in its operating environment. The company said it had sufficient liquidity as of June 28, 2026 to meet key strategic initiatives and other material cash requirements, while continuing to monitor discretionary spending.
The company completed its acquisition of LesserEvil, LLC on November 18, 2025. LesserEvil makes organic popcorn and puffed snack products for retailers and distributors in the U.S. and Canada, and Hershey said the deal expands manufacturing capacity and broadens its portfolio.
For the second quarter, net sales rose 6.6% to $2.787 billion from $2.615 billion a year earlier. Hershey said pricing contributed about 12 percentage points, the LesserEvil acquisition added about 3 points, and volume fell about 8 points, with declines in North America Confectionery and International outweighing growth in North America Salty Snacks.
U.S. takeaway weakened in the quarter: total retail takeaway in the expanded MULO+ with convenience channel fell 5.4%. CMG takeaway dropped 8.6% and market share declined, while salty takeaway excluding LesserEvil rose 6.5% and gained share.
Cost of sales fell 16.2% to $1.524 billion in the quarter, helped by lower sales volume, transformation program savings, and $117.4 million of favorable mark-to-market activity on commodity derivatives. Gross profit jumped to $1.263 billion from $796.3 million, and gross margin widened to 45.3% from 30.5%.
SM&A expenses increased 2.9% to $620.6 million. Excluding advertising and related consumer marketing, those expenses rose 6.0%, driven by higher capability and technology investments, partly offset by lower compensation and benefit costs and AAA Initiative savings. Advertising and related consumer marketing fell 3.3%.
Operating profit surged to $642.6 million from $192.8 million, and operating margin expanded to 23.1% from 7.4%. Net income climbed to $457.7 million from $62.7 million, and diluted EPS rose to $2.26 from $0.31.
For the first six months, net sales increased 8.7% to $5.892 billion from $5.420 billion. Hershey said price realization contributed about 11 percentage points, LesserEvil added about 2 points, foreign exchange added less than 1 point, and volume declined about 5 points.
First-half U.S. takeaway was stronger than the quarter: total retail takeaway increased 4.4% in IRI MULO plus convenience stores. CMG takeaway rose 2.7% despite a market share decline, while salty takeaway increased 8.5% and gained share.
First-half cost of sales declined 7.5% to $3.405 billion, including $142.4 million of favorable mark-to-market activity on commodity derivatives and lower commodity costs, partly offset by higher supply chain costs and unfavorable mix. Gross margin improved to 42.2% from 32.1%, operating profit rose to $1.283 billion from $562.0 million, and net income increased to $892.8 million from $286.9 million. Diluted EPS advanced to $4.39 from $1.41. The market has reacted to these announcements by moving the company's shares -1.71% to a price of $180.76. For the full picture, make sure to review HERSHEY CO's 10-Q report.
