Abstract
The Hershey Company will report fiscal second-quarter results on July 30, 2026, Pre-Market, with consensus indicating revenue of 2.63 billion US dollars and adjusted EPS of 1.43 as investors weigh cocoa-driven cost pressures, promotional cadence, and volume normalization through key seasonal and everyday snacking channels.Market Forecast
Market expectations for the current quarter center on revenue of 2.63 billion US dollars, up 4.40% year over year, adjusted EPS of approximately 1.43, up 43.86% year over year, and EBIT of 453.48 million US dollars, up 41.10% year over year. Management’s prior commentary indicated at least 15% year-over-year growth in adjusted EPS for the quarter, and the company has reiterated a constructive full-year earnings outlook; gross margin and net margin forecasts were not provided in the estimates set we reviewed.Within the business mix, the core confectionery portfolio is expected to carry steady demand even as promotional intensity recalibrates after last year’s pricing, with investors watching how cocoa costs and trade investments flow through margins. The snacking portfolio is viewed as the most promising growth contributor over the medium term, supported by innovation and broader distribution; last quarter it contributed 350.07 million US dollars in revenue, and segment-level year-over-year growth was not disclosed in the data set.
Last Quarter Review
The Hershey Company’s prior quarter delivered revenue of 3.10 billion US dollars (up 10.65% year over year), a gross profit margin of 39.39%, GAAP net profit attributable to the parent company of 435.00 million US dollars, a net profit margin of 14.02%, and adjusted EPS of 2.35 (up 12.44% year over year). A key highlight was EBIT of 686.50 million US dollars (up 12.89% year over year), with net profit improving 35.96% quarter over quarter as the company balanced pricing, mix, and reinvestment. In the product portfolios, confectionery and confectionery-based items generated 2.49 billion US dollars in revenue, while snacking contributed 350.07 million US dollars; segment-level year-over-year changes were not disclosed alongside last quarter’s breakdown.Beyond the headline figures, the quarter benefited from a favorable price-mix carryover and continued momentum in U.S. take-home channels, while international dynamics were influenced by earlier inventory stocking that management indicated would reverse in the second quarter. The company reaffirmed its fiscal outlook, highlighting confidence in its profit algorithm despite commodity volatility and a normalization in the balance between price, promotion, and volume.
Current Quarter Outlook
Core confectionery portfolio
The critical watchpoint for the core confectionery portfolio is the margin path relative to cocoa and other input costs, given the recent period of volatility. The last quarter’s gross margin of 39.39% sets a reference point as management navigates a quarter in which cocoa expenses remain elevated and trade spending is expected to be more pronounced than a year ago. The company’s earlier indication that adjusted EPS would grow at least 15% year over year in the current quarter suggests that productivity actions, disciplined price-pack architecture, and selective promotion support can offset a portion of commodity headwinds. Channel mix also matters: take-home and seasonal assortments continue to provide leverage in core chocolate, but investors will be attuned to whether elasticity remains benign as promotional intensity increases from last year’s tightness.Volume normalization should help the base confectionery run rate compared with periods of pronounced price-led growth, yet the magnitude of benefit in the quarter likely hinges on the timing of retailer inventory movements as well as the cadence of back-to-school sets. A mild inventory reversal in certain international markets relative to the first quarter implies that unit trends in those regions may look less robust this quarter even if underlying consumer takeaway remains stable; the key is avoiding outsized de-stocking that would dilute reported growth. With EBIT expected to advance 41.10% year over year in the quarter, consensus is effectively underwriting margin preservation in chocolate despite higher cocoa costs, a posture that will be tested as the company deploys promotional support to keep household penetration and buy-rates healthy.
Merchandising execution, display availability, and service levels are also central to the chocolate story in this window. As retailers fine-tune promotional calendars and end-cap allocations, the returns on trade investments will influence in-quarter sell-through and gross-to-net trends. Management’s reinforcement of its full-year earnings trajectory suggests confidence in a multi-quarter bridge where efficiency, overhead control, and price-pack architecture offset the most acute raw material pressures until costs begin to normalize. Execution in these areas is likely to determine whether gross margin trajectories meet investor hopes this quarter.
Snacking portfolio
The snacking portfolio, which generated 350.07 million US dollars in revenue last quarter, is a focal area for organic growth and mix enhancement, and it is less directly exposed to cocoa than chocolate. This composition gives the segment an opportunity to protect gross profit dollars even if chocolate margins face pressure. Innovation and brand renovation across salty and permissible indulgence platforms can drive incremental distribution and improved shelf productivity, particularly where the company is layering in single-serve and multipack options aligned with value-oriented consumers. The portfolio can also benefit from cross-category merchandising in high-traffic aisles and from targeted digital promotions that reinforce repeat purchase behavior.Operational changes intended to streamline the U.S. commercial organization should also assist snacking execution. A unified operating model can consolidate go-to-market decisions, sharpen marketing message discipline, and accelerate the scale-up of proven innovations across banners. In the near term, investors will look for signals that snacking is comping positively off last year’s base and that velocity gains are tracking with the added merchandising support typical of summer and back-to-school resets. If the portfolio grows faster than the company average this quarter, it becomes a helpful ballast to consolidated gross margin and EBIT trends, particularly when chocolate is absorbing commodity strain.
From a profit mix perspective, snacking’s contribution can also stabilize net margin. While the last quarter’s net margin printed at 14.02%, consensus this quarter anticipates EBIT growth of 41.10% year over year alongside a 4.40% revenue increase, implying operating leverage where snacking can play a constructive role. The pacing of trade spending in snacking versus chocolate is important: a consistent, targeted approach in snacking can generate unit momentum without the same raw-material sensitivity, potentially supporting consolidated adjusted EPS, which consensus pegs at 1.43, up 43.86% year over year.
Key stock-price swing factors this quarter
Three variables are likely to dominate investor reactions as the print and guide arrive. The first is gross margin versus expectations given cocoa’s trajectory and the quarter’s trade-investment curve. If gross-to-net compression is modest and productivity offsets hold, investors are more apt to accept a second-half-weighted profit cadence, especially with consensus already underwriting 41.10% EBIT growth this quarter. The second is the revenue algorithm: with 4.40% year-over-year revenue growth expected, the composition between price, volume, and any inventory timing effects will be closely parsed. Subtle shifts in volume recovery can either validate the stability seen in the first quarter or raise questions about demand elasticity as promotions return.The third factor is guidance language. Commentary that reiterates the full-year growth framework and brackets the second-half margin recovery path can anchor sentiment. Many investors are watching to see whether management updates the expected slope of second-half EPS growth or provides additional detail on the timing of commodity cost relief versus productivity capture. Any added clarity on international normalization, given the inventory stocking that aided first-quarter volume by roughly five percentage points in some regions and is expected to reverse in the second quarter, will help calibrate run-rate assumptions. Taken together, the balance among margin resilience, volume stability, and guidance confirmation will likely set the near-term trading range.
A secondary set of factors includes marketing reinvestment intensity, the cadence of innovation launches, and retailer feedback on category trends heading into the fall confectionery build. These are not individually thesis-defining, but in aggregate they influence the shape of the second-half recovery that consensus and several institutions have been leaning toward. If the company demonstrates that price-pack modernization and omni-channel merchandising are combining to lift repeat rates without eroding unit economics, the path to the full-year EPS framework appears more secure even with commodity volatility.
Analyst Opinions
Bullish perspectives form the clear majority among directional views in recent months, representing 100% of the directional calls we tracked versus 0% bearish, with several well-followed institutions citing resilient execution and an improving earnings trajectory despite commodity volatility. Evercore ISI upgraded the shares to Outperform and set a 255 US dollars price target, highlighting confidence in a return to balanced growth as volume normalizes and productivity supports margins. Goldman Sachs maintained a Buy rating while adjusting its price target to 221 US dollars, emphasizing the company’s route-to-market strength, ability to sustain brand investment, and a clear bridge to a healthier earnings mix even if cocoa remains elevated near term. BNP Paribas reiterated an Outperform rating and lifted its target to 245 US dollars, pointing to a favorable medium-term earnings path anchored by disciplined pricing, mix upgrade, and operational efficiency. TD Cowen also upgraded to Buy with a 210 US dollars price target, underscoring conviction in the durability of the EPS growth plan and the headroom for reinvestment without abandoning profit progress.These bullish calls share several themes. First, they look through near-term commodity noise to a multiquarter productivity and mix story in which the company offsets raw-material headwinds with pricing architecture, portfolio premiumization, and tighter execution in U.S. retail. Second, the institutions see snacking as a helpful complement to chocolate, moderating cocoa exposure while enabling shelf and display synergies that improve sell-through efficiency. Third, they expect the company’s guidance cadence to remain steady, reinforcing investor confidence that the earnings algorithm can deliver both top- and bottom-line expansion, with consensus already calling for 4.40% revenue growth and 43.86% adjusted EPS growth this quarter.
In their analyses, these firms also assess what could validate the bull case over the next two to three quarters. A stable gross margin progression despite elevated cocoa would signal that pricing and productivity are holding; sustained unit recovery would show that promotional support is effective without materially diluting gross-to-net; and a reiteration or refinement of the full-year outlook would reduce uncertainty. Collectively, the majority view is that the current setup presents a manageable quarter for The Hershey Company, with upside skew driven by cost discipline, channel execution, and the snacking contribution to consolidated profit, while the near-term narrative remains linked to the pacing of commodity normalization and the efficiency of trade spending.
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