tapebrief
HSY · Q4 2025
Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

HSY · Q1 2026 Earnings

Hershey Company (The)

Reported April 30, 2026

30-second summary

Q1 net sales grew 10.6% to $3.10B with adjusted EPS of $2.35, up 12.4% YoY versus $2.09, driven by +10pts of price and -2pts of volume/mix — elasticity running favorable to management's planning assumptions per Steve Boskell's commentary. Despite the strong print, management reaffirmed every line of the FY2026 guide unchanged, including organic net sales growth of 2.5-3.5% — which, against Q1's 7.9% organic, implies the remaining nine months decelerate to roughly 1% organic at the midpoint to land in-range. The reaffirmation is the story: management is banking the Q1 upside rather than flowing it through, citing macro uncertainty and price-pack architecture still rolling out, with a mid-year reassessment flagged.

Headline numbers

EPS

Q1 FY2026

$2.35

+14.6% vs est.

Revenue

Q1 FY2026

$3.10B

+10.6% YoY

+2.4% vs est.

Gross margin

Q1 FY2026

39.4%

Operating margin

Q1 FY2026

20.6%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$3.10B+10.6%$3.09B+0.4%
EPS$2.35—$1.71+37.4%
Gross margin39.4%—37.0%+240bps
Operating margin20.6%—14.4%+620bps

Guidance

Guidance broadly unchanged quarter-over-quarter despite strong Q1 beat; full-year FY2026 adjusted EPS and net sales growth targets reaffirmed at $8.20–$8.52 and 4–5%, respectively.

Guidance is issued for both next quarter and the full year. Both may appear below.

New guidance

MetricPeriodGuideYoY
Organic net sales growthFY 20262.5% to 3.5%—

Reaffirmed unchanged this quarter: Adjusted EPS ($8.20 to $8.52), Net sales growth (4% to 5%), Reported EPS growth (79% to 89%), Adjusted EPS growth (30% to 35%), Effective tax rate (approximately 25% to 27%), Interest expense (approximately $200 million to $210 million), Capital expenditures (approximately $425 million to $475 million), Advancing Agility & Automation Initiative savings (approximately $100 million)

Segment performance

Q1 FY2026
SegmentQ1 FY2026YoY
North America Confectionery$2.49B+8.3%
North America Salty Snacks$0.35B+26.0%
International$0.264B+16.1%

Platform metrics

Q1 FY2026
SegmentQ1 FY2026
Organic constant currency net sales growth7.9%
Net price realization10 points
Volume/mix change-2 points
North America Confectionery CMG retail takeaway growth8.1%
North America Salty Snacks retail takeaway growth (ex-LesserEvil)9.8%

Profitability

Q1 FY2026
SegmentQ1 FY2026
Adjusted gross margin40.4%
Adjusted operating profit margin22.1%
Adjusted net income$0.479 billion

Management tone

From "first chapter of next generation of growth" (Q4) to "we'll be in a better spot to take a look at the guide at the mid-year mark" (Q1). This quarter, despite a 12.4% adjusted EPS YoY print and elasticity running favorable to plan, the framing is explicitly cautious: "we're not changing the guide, so we're still inside the earlier guidance, even though the Q1 results look strong." Management views the Q1 outperformance as partly borrowed from Q2 — Boskell explicitly called out earlier shipping of spring programming including s'mores and pull-forward in international ahead of Middle East disruption risk — rather than as upside to bank.

On elasticity: "elasticities can move, so I'll say we're being a little bit cautious there" (Q1). Q1 actually improved to -2% volume/mix at +10% price, an outcome Boskell characterized as "better than what we've modeled." Yet management's verbal posture is hedged, citing price-pack architecture still hitting shelves. The disconnect between the data (favorable) and the language (cautious) is the most notable tonal shift this quarter.

From "market share losses to macro and cocoa" (prior quarters) to "increased competitive innovation and merchandising… competition continues to be highly rational" (Q1). Tanner reframed share losses as a function of category attractiveness and competitor investment — not aggressive pricing — while explicitly defending pricing discipline. That's a more durable narrative than blaming macro, but it implies share recovery requires Hershey to out-innovate rather than wait for the macro to turn.

Tent poles quantified: "tent poles will deliver a full point of growth" (Q1). The quantification is new and material: a full point of FY growth from incremental tent-pole activations (Americana/July 4th 250th anniversary, the Hershey movie, s'mores summer travel), with management explicitly measuring incrementality. This is the most specific operational commitment management has made on the H2 bridge mechanics.

Recurring themes management leaned on this quarter:

Spring reset execution and shelf wins across mass, grocery, dollar, drug channelsTent pole activation strategy as incremental growth beyond traditional seasonsElasticity resilience running better than planned despite pricing actionsMacro uncertainty (oil, geopolitical, SNAP) well-modeled but monitoredInnovation focus on premium, sweets, and better-for-you as R&D prioritiesMarket share normalization expected as Easter timing normalization and spring momentum offset Q1 competitive pressure

Risks management surfaced:

Increased competitive innovation and merchandising in confectioneryOil price volatility impacting packaging and freight costsSNAP program implementation expanding beyond 5 states with consumer confusionElasticity shifts as price-pack architecture rolls out across portfolioMacro headwinds and geopolitical uncertainty pressuring consumer behavior

Answers to last quarter's watch list

Q1 volume/mix trajectory — Total Company volume/mix came in at -2pts against +10pts of price. Boskell characterized elasticity as running favorable to planned levels. The constructive read: pricing is sticking with less consumer pushback than modeled, though NA Confectionery specifically ran -4pts volume on +12pts price (reflecting one fewer shipping day plus elasticity).
Resolved positively
International segment margin — International segment margin came in at 5.8%, down 680 bps YoY, with segment income of $15.3M (-$13.4M YoY) driven by commodity/manufacturing costs and higher advertising investment. The +9.3% organic revenue inflection was real but did NOT carry through to profitability — margin deteriorated sharply.
Resolved negatively
Easter 2026 pricing realization — Total Company net price realization of +10pts (NA Confectionery +12pts), with Tanner noting Easter sell-through "exceeded our expectations" and share was "ahead of our expectations coming out of Easter." The first fully repriced Easter cleared with strong sell-through.
Resolved positively
Salty Snacks volume sustainability — Reported Salty grew 26% (LesserEvil added ~20pts); organic was +5.6% with volume +5pts and price approximately flat. Retail takeaway ex-LesserEvil was +9.8%, with the gap to organic reflecting planned reduction of private-label sales. Core branded volume sustainability remains intact, but segment margin collapsed 530 bps to 9.8% on a voluntary product withdrawal plus DC/logistics costs; management expects "double-digit" operating income growth for the segment for the full year. Status: Mixed
Advertising spend pace — Advertising and consumer marketing increased 5.8% in Q1, with double-digit increases in NA Salty Snacks and International specifically. Total SG&A grew 3.1%; SG&A ex-advertising grew 1.8%. The advertising ramp is visibly underway but skewed to the smaller segments where margins are most pressured. Status: Resolved
Confectionery segment margin durability — NA Confectionery segment margin came in at 31.8% in Q1, +150 bps YoY, with segment income of $792.4M (+13.8% YoY). Confectionery margin durability is confirmed on the print, and Confectionery is the segment carrying the consolidated result.
Resolved positively

What to watch into next quarter

Q2 organic growth print vs. the implied H2 deceleration: FY organic guide of 2.5-3.5% against Q1's +7.9% requires the remaining nine months to average ~1% organic growth at the midpoint. Boskell confirmed Q2 organic is expected "slightly down" due to timing reversals (Easter sell-through, international pull-forward, earlier spring program shipments). Watch whether the underlying run-rate ex-timing supports the back-half ramp management is signaling.

International segment margin recovery path: -680 bps to 5.8% is a sharp deterioration. Watch whether Q2 segment margin stabilizes or whether the commodity/advertising investment dynamic in International keeps the segment a structural drag for the year.

Salty Snacks margin rebuild: Q1's 9.8% segment margin (-530 bps) was depressed by a voluntary product withdrawal and DC/logistics costs that management characterized as one-time. Watch Q2 for margin snapback consistent with the "double-digit" operating income growth guide; if margin stays compressed, the framing breaks.

Volume/mix as the pricing wave laps: Total Company -2pts vol/mix at +10pts price was favorable. As price-pack architecture continues rolling to shelf, watch whether volume/mix improves toward flat or whether the elasticity picture shifts. Management explicitly flagged this as the risk.

Tent-pole activation incrementality: Tanner committed to "a full point" of FY growth from tent poles with measured incrementality (July 4th 250th anniversary, s'mores summer, Hershey movie in Q4). Watch for Q2 disclosure on early tent-pole reads — without quantified incrementality, the 1pt assumption is the most load-bearing piece of the H2 bridge.

Mid-year guide refresh at Q2: Boskell explicitly flagged mid-year as the reassessment moment with most price-pack architecture in place. Watch whether Q2 brings a raise on adjusted EPS or a reaffirmation that confirms the conservative posture is structural rather than seasonal.

Sources

  1. Hershey Q1 FY2026 earnings press release, filed via SEC, April 30 2026: https://www.sec.gov/Archives/edgar/data/47111/000162828026028569/exhibit991_2026xq1.htm
  2. Hershey Q1 FY2026 earnings Q&A session transcript, April 30 2026
  3. Hershey Q4 FY2025 earnings press release (for prior FY2026 guidance comparison)

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