I'll research HSY before writing the preview. Let me gather recent filings, transcripts, news, and price data.Let me read the most recent earnings call transcript (2026Q1) and release, plus recent news for context on cocoa/guidance.Let me gather the year-ago Q2 comparison, recent news/macro, consensus estimates, and price performance.Let me get consensus estimates and current cocoa/analyst context via web search.Let me get the specific consensus numbers from the preview articles.I now have what I need. Here's the earnings preview.
This is a "quality-of-quarter" print, not a headline print. Management has already telegraphed that Q2 will look optically soft — organic sales are expected to be roughly flat-to-slightly-down — because a chunk of spring/Easter volume got pulled forward into a very strong Q1. The real stories are (1) whether the gross-margin inflection from falling cocoa is on track, (2) whether management raises full-year guidance at this mid-year checkpoint, and (3) whether Hershey stabilizes its confection market share against intensifying competition.
| Metric | Q2 2026 consensus | Q2 2025 actual | Implied Y/Y |
|---|---|---|---|
| Adjusted EPS | ~$1.45–1.46 | $1.21 | +~20% |
| Net sales | ~$2.63–2.66B | $2.615B | +~1–2% |
On the Q1 call, CFO Steve Voskuil and CEO Kirk Tanner were explicit that Q2 organic sales would dip because of timing: - Easter sell-through was strong, pulling S'mores and other spring programming shipments into Q1 earlier than normal. - There was some international pull-forward as customers front-ran potential Middle East disruption. - Voskuil confirmed North America Confectionery organic sales would be "slightly down" in Q2 on this timing — "nothing structurally different."
What to actually watch: underlying consumption. Tanner guided that after the April Easter overlap, "you'll see momentum pick up in May and June." So parse the 12-week MULO+ takeaway data and the May/June cadence rather than the reported organic figure.
Q2 2026 is the quarter the cocoa tailwind is supposed to start showing up. On the Q1 call management guided gross margin up ~300 bps year-on-year in Q2, accelerating to >500 bps in the back half as Hershey laps peak-cost cocoa. For reference, Q2 2025 adjusted gross margin was a depressed 38.1% and adjusted operating margin was 15.7%. - The macro tailwind is real: Cocoa traded around $5,243/tonne on July 29, 2026 — up modestly over the past month but still roughly 36% below a year ago. - Critically, Hershey is keeping the ~20% of pricing it took during the cocoa spike even as the input deflates — the "price retention" dynamic that widens margins. But note cocoa prices have eased while shelf chocolate prices have stayed high, and chocolate remains expensive as makers try to win shoppers back with premium products. Elasticity is the offset to watch.
Hershey reaffirmed its 2026 outlook at Q1 despite the beat, and explicitly said it would reassess at mid-year — i.e., this print. Current full-year guide:
| FY2026 guidance (reaffirmed) | |
|---|---|
| Net sales growth | 4%–5% (incl. ~150 bps from LesserEvil) |
| Organic net sales growth | 2.5%–3.5% |
| Adjusted EPS | $8.20–$8.52 (+30–35%) |
| Reported EPS | $7.77–$8.19 |
| Effective tax rate | ~25%–27% |
| Interest expense | ~$200–210M |
| Capex | ~$425–475M |
| A&A savings | ~$100M |
Management held guidance in Q1 on caution — elasticities were running favorable vs. plan, but price-pack architecture was still hitting shelves and they wanted more data. With the mid-year checkpoint here, a guidance raise is the key upside catalyst; conversely, a mere reaffirmation could disappoint a stock that has bounced into the print. Note the Street's full-year number (~$8.43) is already near the high end.
The soft spot in Q1: Hershey reported CMG (candy, mint, gum) share declined year-on-year on increased competition and the timing of innovation/merchandising, even as category takeaway grew ~8%. Management said it exited spring resets in a "net positive" position and expects to reclaim momentum in H2 via tent-poles and the fall premium Hershey's launch. Whether share stabilizes in Q2 is a make-or-break credibility item for the second-half growth story, especially with investors worried that falling cocoa could reignite competitive promotion.
Don't be spooked by a flat/soft headline organic number — that's baked in and pre-explained by Q1 shipment timing. The bull thesis hinges on margin: Q2 should be the first quarter the cocoa deflation tailwind visibly expands gross margin (guided ~+300 bps), setting up an even bigger back half (>500 bps). The two swing factors for the reaction are (1) whether management raises full-year EPS guidance at this mid-year checkpoint (upside catalyst; a plain reaffirmation may underwhelm), and (2) evidence that confection market share is stabilizing ahead of the Halloween/holiday tent-pole ramp. Underlying May/June consumption trends and any commentary on competitive intensity as cocoa falls are the tells.
Preview based on Hershey's Q1 2026 release and earnings call, the Q2 2025 comparison release, current consensus, cocoa pricing, and recent news. Not investment advice.