The Hershey Company (HSY) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: The setup is cautiously constructive but not a high bar — consensus expects slightly negative NA Confectionery organic sales in Q2 (−1.9% vs. +8.0% actual in Q1) due to a well-telegraphed shipment timing pull-forward, making the real swing factor whether gross margin expansion of ~300 bps materializes as guided and whether management upgrades full-year guidance at the midyear mark.

Heading into Q2 2026, the bar for Hershey is deliberately set low on the top line: management guided North America Confectionery organic sales to be slightly negative due to the Easter timing pull-forward that shifted spring programming (including S'mores) into Q1, and consensus has aligned at approximately −1.9% organic growth for the segment. The more important metric is gross margin, where management guided ~300 bps of year-over-year expansion in Q2 and >500 bps in H2 as higher-cost cocoa is lapped — this is the crux of the 2026 recovery narrative and any shortfall here would be the most damaging outcome. Estimate revisions have been essentially flat since the Q1 print, with consensus net sales for Q2 at $2.64B (vs. $2.61B actual in Q2 2025) and adjusted EPS at $1.43, suggesting the street is not pricing in a meaningful beat or miss. The stock has underperformed XLP by roughly 4–5 points since the Q1 earnings date and trades near the low end of its post-earnings range, implying the market is not pricing in a positive surprise. The single biggest wildcard is whether management raises full-year 2026 guidance at the midyear mark — they explicitly flagged this as the decision point on the Q1 call — which would be the most meaningful catalyst for the stock given the current cautious posture.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a low bar on revenue (organic sales expected slightly negative due to timing) but a meaningful bar on gross margin (~300 bps expansion guided) — gross margin is the bigger swing factor for the stock on print day.

Table 1 — Q2 2026 Current Quarter Snapshot

Source: Visible Alpha Consensus and Actuals Data. All consensus figures as of July 29, 2026.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Top 2 KPIs: Net Sales and Adjusted EPS (Diluted Operating)

Pattern: HSY has beaten on both Net Sales and Adj. EPS in 5 of the last 6 quarters (Q1 2025 was a narrow revenue miss). The two double-misses (Q2 and Q3 2024) coincided with peak cocoa cost pressure; that headwind is now reversing, supporting continuation of the beat pattern. EPS beats have been consistently large (7-23%), reflecting management's conservative guidance posture.

Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Full-year 2026 guidance was reaffirmed unchanged after the Q1 beat; management explicitly flagged the midyear mark (Q2 print) as the decision point for a potential guidance raise, making this earnings call the most important catalyst event of the year.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have been essentially flat since the Q1 print — the street is tracking guidance closely with no meaningful divergence, suggesting neither a revision-driven catalyst nor a risk. The gap between current consensus and guidance is narrow, leaving the Q2 print itself (and any guidance raise) as the primary driver.

Estimates have barely moved since the Q1 print — all key metrics within 0.4% of the post-earnings baseline. This flat revision trajectory reflects the street's confidence that management's guidance is credible, but also means there is no estimate-revision tailwind heading into the print. The key question is whether a guidance raise at the midyear mark unlocks upward revisions for FY2026.

Source: Visible Alpha Consensus and Actuals Data.

5. Stock Performance

Key Takeaway: HSY has underperformed both XLP and the S&P 500 since the Q1 earnings date (Apr 30, 2026), declining ~1% vs. XLP +3.6% and SPY +1.5%, driven by sentiment and multiple compression rather than estimate revisions — the stock peaked at ~107 (indexed) in late May before selling off ~15 points to a trough in mid-July, suggesting the market is skeptical of the recovery narrative.

HSY vs. XLP (Consumer Staples ETF) vs. S&P 500 (SPY) — Indexed to 100 at Q1 2026 Earnings Date (April 30, 2026). Source: Stock Price Data.

Since the Q1 2026 earnings date, HSY peaked at ~106.5 (indexed) on May 27 before declining sharply through June and into mid-July, reaching a trough of ~91.7 on July 15. The stock has partially recovered to ~99 as of July 29. The underperformance vs. XLP is notable given that HSY beat Q1 estimates by a wide margin — the negative stock reaction on earnings day (despite the beat) and subsequent drift lower suggest the market is pricing in execution risk on the gross margin recovery and skepticism about a guidance raise. The Goldman Sachs Global Staples Forum (May 12) did not produce any material guidance update, which may have disappointed investors expecting a more bullish tone.

Source: Stock Price Data (Yahoo Finance).

6. Peer Commentaries — Read-Through (Last 60 Days, Q2 2026 Relevant)

Key Takeaway: Peer commentary from Mondelez (Q2 2026 earnings, July 28) is the most directly relevant read-through — MDLZ reported positive volume mix in North America and cocoa surplus at historical highs, both constructive signals for HSY's gross margin recovery narrative. General Mills and Campbell's flag a pressured but stable consumer with value-seeking behavior, consistent with HSY's elasticity commentary.

Mondelez International (MDLZ) — Q2 2026 Earnings Call (July 28, 2026)

Relevance: Highest read-through — direct competitor in chocolate/confectionery; reports same calendar quarter as HSY Q2 2026.

• North America volume/mix positive and accelerating: MDLZ reported "strong net revenue growth" and "positive volume mix" in North America, accelerating sequentially from Q1, with expectations for this to continue in H2. "The pricing is solid and the promotional execution that we have is working well for us." MDLZ also "gained share in all our categories in North America." HSY read-through: Positive — suggests the North American confectionery/snacking consumer is holding up and pricing is rational, consistent with HSY's own elasticity commentary.
• Cocoa surplus at historical highs — structural improvement: MDLZ management stated the cocoa market is "in a very different place versus what drove the crisis in 2024." The surplus between demand and supply is "at historical high" with at least 500,000 metric tons of surplus (10% of total demand). Industry coverage stands at 10 months vs. 7 months in 2024. 2027 earnings expected to be "insulated from commodity volatility." HSY read-through: Highly constructive — validates HSY management's view that cocoa downside is a potential upside catalyst for 2027 and beyond. Supports the gross margin recovery narrative.
• North America consumer confidence subdued but rebounding: "Consumer confidence in North America has rebounded from lows but remains very subdued." Consumers are simultaneously gravitating toward value formats AND premium options ("case-shaped growth"). Purchasing power is up but consumers "remain very concerned about affordability, economic outlook and job security." HSY read-through: Neutral — consistent with HSY's macro assumptions; the bifurcated consumer (value + premium) is a dynamic HSY is navigating with price pack architecture.
• European chocolate impacted by heat wave: MDLZ noted a heat wave impacted Q2 European chocolate results, affecting "trade stock control" and "chocolate consumption." This is still a factor in Q3 for some markets. HSY read-through: Limited direct impact (HSY is predominantly North American), but worth monitoring for international segment.
• Innovation strategy: bigger and fewer bets: MDLZ is "reducing innovation portfolio going for bigger and fewer bets." Strong traction in health/wellness/functional (protein, gluten-free, zero-sugar). Biscoff collaboration projected to be worth $500M-$1B. HSY read-through: Constructive for the category; validates HSY's tentpole and functional snacking strategy.

General Mills (GIS) — Q4 FY2026 Earnings Call (July 1, 2026)

Relevance: Broad CPG peer; commentary covers the same calendar period as HSY Q2 2026 (GIS Q4 FY2026 ends May 2026).

• Consumer remains pressured but stable: GIS observed a "more difficult consumer backdrop" in fiscal 2026. Looking to FY2027, the consumer will "continue to be pressured" and "continue to change their behavior — being more deliberate in how and where they shop, buying more on promotion and less on everyday prices." Categories slowed by "about a point" as GIS exited Q4. HSY read-through: Neutral-to-cautious — consistent with HSY's macro assumptions (SNAP, gas prices). Promotional intensity may be a headwind for HSY's pricing execution.
• Private label and small brands stealing share in FY2026: GIS noted "private label got stronger in pretty much all of our categories, they were stealing share" and "small brands stealing share" in FY2026. GIS's affordability/price investment strategy worked to recapture share. HSY read-through: Cautious — private label pressure is a known risk for HSY's CMG segment; GIS's experience suggests the dynamic is real but manageable with the right pricing and promotional response.
• Consumers still willing to pay for benefits that matter: "Consumers are still willing to pay for benefits that matter most to them — think functional nutrition, bold flavors, etc." GIS is shifting focus to innovation and renovation for FY2027 with "strong price mix with heavy emphasis on mix from premium innovation, price pack architecture, and trade efficiency." HSY read-through: Constructive — validates HSY's premiumization strategy and tentpole activation approach.
• At-home eating stable at 86%: At-home eating consumption remained "pretty stable at 86%" in the last quarter, with lower-income households eating "a little bit more at home and spending a little bit more on staples." HSY read-through: Constructive — stable at-home eating supports confectionery consumption.

Campbell's Company (CPB) — Q3 FY2026 Earnings Call (June 8, 2026)

Relevance: CPB Q3 FY2026 covers the February–April 2026 period; commentary on consumer trends and promotional dynamics is relevant context for HSY's Q2 2026 (April–June 2026).

• Promotional ROI discipline: CPB is scrutinizing trade ROIs aggressively: "When we run a TPR just on the shelf, you don't get a great return. When we get feature in display, the ROIs are really, really impressive." CPB plans to "walk away from some of those TPRs" if they cannot secure feature in display. HSY read-through: Constructive — suggests the industry is becoming more disciplined on promotional spend, which is consistent with HSY's "highly rational" competitive environment commentary and supports pricing sustainability.
• Inflation outlook: 5-6% potential if oil stays elevated: CPB flagged potential 5-6% inflation if oil stays around $100/barrel, driven by packaging, logistics, aluminum, and fertilizer. "The first half inflation will be pretty high." HSY read-through: Neutral — HSY's primary cost driver is cocoa (not oil-linked), but logistics and packaging inflation are relevant. The cocoa surplus narrative (per MDLZ) is more important for HSY.
• At-home cooking trend resilient: "The at-home cooking consumer trend is resilient, and we expect that trend to continue." Goldfish multipacks growing 6% in last 13 weeks, suggesting consumer preference for value/larger formats. HSY read-through: Constructive — at-home consumption supports confectionery snacking occasions.

Costco (COST) — Q3 FY2026 Earnings Call (May 28, 2026)

Relevance: COST covers the February–May 2026 period; candy category commentary is a direct channel read-through.

• Candy category growing mid-single digits: In food and sundries, comp sales grew mid-single digits, "led by packaged foods and candy." Costco also reduced the price of its Kirkland Signature Milk Chocolate Almonds from $19.99 to $18.99, signaling value-oriented pricing in the chocolate category. HSY read-through: Constructive — candy category growth at Costco is a positive demand signal for the broader confectionery category heading into HSY's Q2 2026.

Sprouts Farmers Market (SFM) — Q2 2026 Earnings Call (July 29, 2026)

Relevance: SFM covers the same calendar quarter as HSY Q2 2026; commentary on consumer behavior and affordability is relevant context.

• Consumer environment remains challenging and uneven: "The consumer environment remains challenging, with customers continuing to make thoughtful choices around their healthy grocery spend." The "less engaged lower income customer" is proving "tougher to move overall" and "spreading trips out a bit more." First-half affordability tests "produced mixed results" — most actions drove better unit movement but "broader traffic response developed more gradually than expected." HSY read-through: Cautious — lower-income consumer stress is a headwind for HSY's volume recovery, particularly given SNAP benefit changes. However, SFM's core customer "remained pretty resilient," consistent with HSY's elasticity commentary.
• Sequential improvement in traffic and units: SFM noted "sequential improvement in both traffic and units in the basket," suggesting gradual consumer recovery. HSY read-through: Mildly constructive — sequential improvement in consumer engagement is consistent with HSY's expectation that momentum picks up in May and June after the April Easter overlap.

7. Material News & Developments

Key Takeaway: The most important development since Q1 earnings is the absence of a guidance raise at the Goldman Sachs Staples Forum (May 12) — management stayed silent on any update, which the market interpreted negatively. The Q2 print is now the first opportunity to raise guidance, making it the single most important catalyst.

• May 12, 2026 — Goldman Sachs Global Staples Forum (no guidance update): CFO Steve Voskuil participated in a fireside chat at the Goldman Sachs Global Staples Forum. No material guidance update or new disclosures were made. Implication: Management maintained its cautious posture, consistent with the Q1 call message that the midyear mark (Q2 print) is the decision point for any guidance revision. The silence may have contributed to the stock's underperformance in June.
• May 8, 2026 — Annual Meeting: All Proposals Approved: Hershey shareholders approved all proposals at the Annual Meeting of Stockholders. No material governance changes. Implication: Routine; no impact on near-term earnings outlook.
• Ongoing — US President vacancy (Andrew Archambault departed May 1, 2026): Andrew Archambault departed as US President effective May 1, 2026 after ~14 months in the role. CEO Kirk Tanner, Chief Customer Officer Tiffany Menyhart, and Chief Commercial Officer Nate Champagne are providing interim coverage. Search for replacement is underway. Implication: Leadership continuity risk for the largest business unit heading into the critical H2 Halloween season. Analysts may probe the search timeline and interim execution on the Q2 call.
• Ongoing — Cocoa cost trajectory and tariff relief: Cocoa surplus at historical highs per MDLZ (July 28) — at least 500,000 metric tons surplus, 10 months of industry coverage. HSY management had expressed "increased confidence in potential relief on cocoa tariffs" on the Q1 call, though a "blanket exemption probably not in near-term cards." Implication: Constructive for the 2027 margin recovery narrative; any tariff relief announcement would be a positive catalyst.
• Ongoing — Hershey biopic film (Thanksgiving 2026 release): The Hershey biopic film is scheduled for Thanksgiving weekend 2026 release, cited as a unique culturally relevant tentpole activation alongside the America 250th anniversary. Management expects tentpoles to contribute a full point of growth for the year. Implication: Potential H2 upside catalyst if the film drives brand awareness and incremental consumption; management will likely provide an update on activation plans.
• Ongoing — VitaKey JV (functional snacking): Hershey entered a joint venture with VitaKey (breakthrough protein delivery technology) to build the functional snacking platform. Segment currently growing at high mid-single to double-digit rates. Implication: Small but growing; validates the One Hershey operating model and diversification strategy. Not a near-term earnings driver.
• Ongoing — Reese's international expansion (UK/Europe, Brazil, Mexico): Management is executing the Reese's international expansion playbook with a path to in-sourcing manufacturing. Implication: Long-term growth driver; any update on distribution milestones or manufacturing progress would be a positive signal.
• Ongoing — SNAP benefit changes and macro headwinds: Management modeled SNAP headwinds from the beginning; Q1 impact in the 5 states where waivers were limited "aligned with estimates." SNAP headwind expected to increase over the course of the year. Gas prices and geopolitical uncertainty also cited as macro factors. Implication: Key risk to monitor — any deterioration in SNAP or consumer spending beyond modeled assumptions could pressure volume and force a guidance cut.

8. Insider Transaction Activity

Key Takeaway: The dominant signal is persistent, high-frequency 10b5-1 selling by the Hershey Trust (10,000 shares/day, every trading day since at least April 30) — this is a structural, plan-driven disposition and carries no informational signal. The only notable discretionary activity is CFO Steven Voskuil's three 10b5-1 planned sales (1,500 shares each in May, June, and July), also plan-driven. No open-market buys from any insider.

Summary: No open-market buys from any insider during the period. All selling activity is 10b5-1 plan-driven (Hershey Trust and CFO Voskuil) and carries no informational signal. Director grants are routine annual compensation. The absence of any discretionary open-market buying by management is notable given the stock's ~15% decline from its May peak, but is not unusual given the Trust's structural selling program and the pre-earnings quiet period.

Source: Insider Transaction Data (SEC Form 4).