The Hershey Company (HSY) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: The setup is cautiously constructive — consensus is a manageable bar after Q1 pull-forward distortion, but the single biggest swing factor is whether Q2 organic sales land at or above the guided "slightly negative" level and whether management upgrades full-year guidance at the midyear checkpoint.

Bar: Consensus organic sales growth for Q2 2026 sits at approximately −1.3% (Visible Alpha), reflecting management’s explicit guidance for a slightly negative quarter driven by Easter timing pull-forward into Q1 and the intentional reduction of private-label salty snacks production. This is a deliberately low bar, and any outperformance on core branded consumption — particularly North America Confectionery — could drive a beat. Adjusted EPS consensus of approximately $1.43 is similarly modest, with gross margin expected to expand nearly 300 bps year-over-year as higher-cost cocoa begins to lap.

Guidance/Tone: Management reaffirmed full-year 2026 guidance on the Q1 call (April 30) and reiterated confidence at the Goldman Sachs Consumer Staples Forum (May 12), noting that elasticities are running "more favorably than original expectations" and that all key operating areas are "performing inside the expectations" set for the year. The tone has been deliberately measured — management explicitly said it would "not change the guide" despite a strong Q1 beat, citing price pack architecture still rolling out and macro uncertainty (SNAP, gas prices). The midyear checkpoint on July 30 is the first natural opportunity to raise guidance.

Estimate Trajectory: Q2 2026 adjusted EPS estimates have drifted modestly lower since the Q1 print (from ~$1.55 in February to ~$1.43 currently), consistent with management’s own guidance for a timing-impacted quarter. Full-year 2026 EPS consensus of ~$8.43 is essentially unchanged since the Q1 print, suggesting the Street is holding its powder for a potential guidance raise. The gap between current consensus and the guidance midpoint (~$8.36) is narrow, leaving limited cushion if execution disappoints.

Stock Setup: HSY has underperformed both XLP (+3.6%) and the S&P 500 (+1.5%) since the Q1 earnings date (April 30), declining approximately −1.0% through July 29. The stock trades at ~19.8x NTM P/E, down sharply from ~31x a year ago as multiple compression has dominated the return profile. At current levels, the stock is not pricing in a beat — it is pricing in execution risk. A clean Q2 print with a guidance raise could be a meaningful catalyst.

Wildcard: The single biggest wildcard is cocoa cost trajectory and tariff relief. Mondelez (reporting July 28, one day prior) flagged a cocoa surplus of at least 500,000 metric tons — 10% of total demand — and expressed confidence in 2027 earnings insulation from commodity volatility. If Hershey echoes this view and signals that 2027 cocoa coverage is locking in at favorable levels, the stock could re-rate meaningfully. Conversely, any commentary suggesting tariff relief on cocoa is stalling or that H2 gross margin expansion is at risk would be a negative surprise.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus sets a deliberately low bar for Q2 — organic sales are guided slightly negative due to timing, while gross margin is the more important swing factor, expected to expand ~300 bps year-over-year. Adjusted EPS and organic sales growth are the two KPIs most likely to drive the stock on results day.

Table 1 — Current Quarter Snapshot (Q2 2026)

Source: Visible Alpha Consensus and Actuals Data. Q2 2026 consensus as of July 29, 2026.

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

Pattern: HSY has beaten on both adjusted EPS and organic sales in 7 of the last 8 quarters, with the lone miss in Q3 2024 driven by peak cocoa cost pressure. The consistent beat pattern reflects management’s tendency to guide conservatively; however, Q2 2026 is a deliberately guided-down quarter, so the beat threshold is lower than usual. Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Full-year 2026 guidance has been reaffirmed and unchanged since the Q1 print. Management’s tone at the May 12 Goldman Sachs conference was incrementally positive — elasticities running better than modeled, market share sequentially building — but no formal guidance revision has been issued. July 30 is the first opportunity to raise the full-year bar.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates for Q2 2026 have drifted modestly lower since the Q1 print, consistent with management’s own timing guidance. Full-year estimates are essentially flat, suggesting the Street is waiting for a guidance raise before moving numbers. The gap between consensus and guidance midpoint is narrow, creating asymmetric upside if management raises at the midyear checkpoint.

Source: Visible Alpha Consensus and Actuals Data. Post-Q1 baseline as of May 7, 2026 (5 trading days post-print).

Estimates have been remarkably stable since the Q1 print, with FY2026 EPS essentially flat and Q2 organic sales drifting only slightly more negative — consistent with management’s explicit timing guidance. The Street is holding its numbers, waiting for a midyear guidance raise. If management raises the FY2026 EPS range on July 30, consensus will likely move to $8.60–$8.80, representing ~2–4% upside to current numbers.

5. Stock Performance

Key Takeaway: HSY has underperformed both XLP and the S&P 500 since the Q1 earnings date, declining ~1.0% vs. XLP +3.6% and SPY +1.5%. The underperformance is driven almost entirely by multiple compression — NTM P/E has contracted from ~26.6x six months ago to ~19.8x today — as the market has de-rated the stock on execution risk and the pace of margin recovery. Estimate revisions have been flat, meaning the stock’s weakness is a valuation story, not an earnings story.

HSY vs. XLP vs. S&P 500 — Indexed to 100 at Q1 2026 Earnings Date (April 30, 2026). Source: Yahoo Finance / Stock Price Data.

Key Events Since Q1 Earnings: (1) Apr 30 — Q1 2026 earnings beat; stock declined on the day as results were anticipated. (2) Apr 14 — US President Andrew Archambault departure announced. (3) May 12 — Goldman Sachs Consumer Staples Forum; management reiterated confidence, elasticities better than modeled. (4) May 28 — Chief Supply Chain Officer Jason Reiman retirement announced; Mitchell Arends appointed effective June 22. (5) Jun 22 — Arends assumes CSO role. Source: Yahoo Finance / Stock Price Data; Visible Alpha (NTM P/E).

6. Material News & Developments

Key Takeaway: The most important development since Q1 earnings is the Mondelez Q2 2026 print (July 28) — MDLZ beat on organic sales (+2.2% vs. +0.9% expected) and raised full-year top-line guidance, providing a direct positive read-through for Hershey’s North America confectionery business and cocoa cost outlook. Leadership transitions (US President, CSO) are the key execution risk to monitor.

• July 28, 2026 — Mondelez Q2 2026 Earnings Beat & Guidance Raise: MDLZ reported Q2 organic sales growth of +2.2% vs. Street expectations of +0.9%, with North America strength. EPS of $0.73 vs. $0.68 consensus. Raised full-year top-line guidance to "at least +2%" from prior 0–2% range. Implication: Positive read-through for HSY — confirms North America confectionery demand is resilient and the pricing environment remains rational. MDLZ also provided detailed cocoa commentary noting a surplus of at least 500,000 metric tons (10% of total demand) and 10 months of industry coverage, suggesting easing cost pressure into 2027.
• July 29, 2026 — Procter & Gamble Q4 FY2026 Miss & Soft Guidance: PG reported flat organic sales vs. +1.85% expected; EPS of $1.43 beat by $0.02 but FY2027 guidance midpoints were near-inline and below consensus. Stock fell ~3.5%. Implication: Negative read-through for broad consumer staples sentiment, but PG’s categories (beauty, healthcare, home care) are less directly comparable to confectionery. Highlights that the consumer environment remains challenging.
• July 28, 2026 — Coca-Cola Q2 2026 Strong Beat & Guidance Raise: KO reported 7% sales growth (vs. 5% expected), raised full-year organic sales guidance to 5% and EPS growth to 9–10%. Volume-driven beat. Implication: Positive for consumer staples sentiment broadly; confirms that branded consumer goods with strong equity can sustain pricing and drive volume simultaneously.
• July 26, 2026 — Cocoa Prices Easing: News reports note cocoa prices are easing as chocolate firms seek to win back shoppers through premium products and social media trends. Implication: Directionally positive for HSY’s 2027 cost outlook; consistent with management’s view of a cocoa surplus.
• July 15, 2026 — Conagra Q4 FY2026 — Dividend Cut & Weak Guidance: CAG cut its quarterly dividend to $0.175 from $0.35 and guided FY2027 EPS of $1.45 vs. Street $1.54, with organic sales expected to decline 1–3%. Implication: Negative for packaged food sentiment broadly, but HSY’s situation is fundamentally different — it is in a margin recovery phase with a strong balance sheet, not a restructuring.
• July 9, 2026 — HSY Announces Q2 2026 Earnings Webcast: Hershey confirmed Q2 2026 earnings call for July 30, 2026 at 8:30 AM ET.
• July 1, 2026 — General Mills Q4 FY2026 Beat & Positive Outlook: GIS beat Q4 profit expectations and announced focus on organic sales growth for FY2027. Stock rose ~9%. Implication: Positive for consumer staples sentiment; GIS commentary on stabilizing base volume and shifting to innovation is consistent with HSY’s own strategy.
• June 8, 2026 — Campbell’s Q3 FY2026 Earnings: CPB reported mixed results with snack business under pressure. Management flagged 5–6% total inflation for FY2027 if oil stays at ~$100/barrel. Implication: Highlights ongoing cost pressure in packaged food; HSY’s primary exposure is cocoa (not oil), but logistics and packaging costs are relevant.
• May 28, 2026 — Chief Supply Chain Officer Transition: Jason Reiman (SVP, Chief Supply Chain Officer) announced retirement; Mitchell Arends appointed effective June 22, 2026. Implication: Second senior leadership departure in two months (following US President Archambault in April). Adds execution risk during a critical margin recovery period, though Reiman remains in a transition role through Q2 2027.
• May 12, 2026 — Goldman Sachs Consumer Staples Forum: Management reiterated confidence in 2026 and 2027 plans, noting elasticities running "more favorably than original expectations" and market share expected to "sequentially build back" in Q2. Confirmed tentpole strategy (America 250, Hershey biopic) and One Hershey operating model rationale.
• May 8, 2026 — Annual Meeting: Shareholders approved all proposals. No material new disclosures.

7. Peer Commentaries & Read-Through

Inclusion Screen: Only commentary from the last 60 days (May 29 – July 29, 2026) that is forward-looking about the current reporting period (Q2 2026 calendar quarter) or post-prior-earnings guidance/outlook is included. Backward-looking Q1 2026 results discussion from peers is excluded. Peers screened: MDLZ (Q2 2026 earnings July 28), GIS (Q4 FY2026 earnings July 1), CPB (Q3 FY2026 earnings June 8), KO (Q2 2026 earnings July 28), PG (Q4 FY2026 earnings July 29).

Key Takeaway: Peer commentary is net positive for HSY heading into Q2 — MDLZ’s North America beat and cocoa surplus commentary are the most direct read-throughs. GIS’s pivot to innovation and KO’s volume-driven beat confirm that branded consumer goods with strong equity can outperform in a pressured consumer environment. The common thread across all peers is that the consumer remains stressed but is still willing to pay for trusted brands.

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

Relevance: MDLZ is the most direct peer read-through for HSY — both are major North American chocolate/confectionery companies with significant cocoa exposure. MDLZ reported one day before HSY’s Q2 call.

• North America Consumer Demand (Forward-Looking): CEO Dirk van de Putte noted consumer confidence has "rebounded from lows but remains very subdued," with persistent inflation and energy price pressure. Observed "case-shaped growth" — consumers simultaneously seeking value formats AND premium options. MDLZ achieved "very strong growth in the value channel high single digit" and "mid-single digit growth in away from home," gaining share across all North American categories. Management expects "a very strong second half in North America."
• HSY Read-Through: Directly positive. Confirms North America confectionery demand is resilient and that disciplined promotional execution, innovation, and price pack architecture can drive share gains even in a pressured consumer environment. The "strong second half" expectation aligns with HSY’s own H2 tentpole strategy.
• Cocoa Cost Outlook (Critical for HSY): CFO Luca Zaramella stated the cocoa market is "in a very different place versus what drove the crisis in 2024." Key data points: (1) cocoa surplus of "at least half a million metric tons" — equivalent to 10% of total demand; (2) industry coverage at "ten months" vs. "just seven months" in 2024; (3) 2027 earnings "expected to be strong" and "insulated from commodity volatility." Zaramella attributed recent price upticks to a "short squeeze" and "El Nino" rather than structural supply issues.
• HSY Read-Through: Highly positive. If HSY’s cocoa coverage structure is similar, this supports management’s view that 2027 represents a meaningful earnings recovery opportunity. Watch for HSY to echo this language on July 30.
• Gross Margin Trajectory: MDLZ reported +3% gross profit dollar growth in Q2 and expects "an acceleration of the gross profit dollar number, particularly in Q3, but also in Q4." Attributed to "holding prices in chocolate" in a "fairly rational" environment, volume mix leverage, and supply chain productivity.
• HSY Read-Through: Positive. Confirms the chocolate pricing environment remains rational, which is a prerequisite for HSY’s own gross margin recovery narrative. HSY guided ~300 bps of gross margin expansion in Q2 and >500 bps in H2.
• Pricing Environment: MDLZ described the pricing environment as "fairly rational across the board." Full-year top-line guidance raised to "at least +2%" with "positive volume mix and modest contribution from pricing."
• HSY Read-Through: Positive. Rational pricing is essential for HSY’s strategy of not pursuing additional pricing in 2026 while relying on price pack architecture and volume recovery.

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

Relevance: GIS is a broad packaged food peer with significant North America exposure. Q4 FY2026 covers the April–May 2026 period, overlapping with HSY’s Q2 2026.

• Consumer Demand Outlook (Forward-Looking for FY2027): COO Dana McNabb expects the "consumer is going to continue to be pressured" in the new fiscal year, with consumers "buying more on promotion and less on everyday prices, making trade-offs between pack sizes and channels, all with value at the forefront." Categories slowed by about a point exiting Q4. However, consumers are "still willing to pay for benefits that matter most to them" — functional nutrition, bold flavors.
• HSY Read-Through: Mixed. The pressured consumer backdrop is a headwind for discretionary confectionery, but HSY’s brands (Reese’s, Hershey’s) are iconic and tend to be resilient as affordable indulgences. The emphasis on value formats and price pack architecture is directly relevant to HSY’s own strategy.
• Strategy Pivot — Innovation Over Pricing: CEO Jeff Harmening noted that with base price investments "behind us," GIS is "shifting our focus more toward innovation and renovation." This pivot drove increased household penetration for the first time in years and improved North America share. FY2027 goal is "dollar competitiveness" through mix improvement.
• HSY Read-Through: Positive. GIS’s successful stabilization of base volume through pricing, followed by a pivot to innovation, validates HSY’s own strategy of not pursuing additional pricing in 2026 while investing in brand, innovation, and tentpole activations.
• Input Cost Outlook: GIS guided 4–5% inflation for FY2027, assuming ~$100/barrel oil. Expects $750M in cost savings in FY2027 as part of a $3B four-year program. Gross margin expected to face "some modest pressure" despite savings.
• HSY Read-Through: Contextual. GIS’s inflation is oil-driven; HSY’s is cocoa-driven. The directional message — that cost pressures persist but are manageable with productivity — is consistent with HSY’s own narrative.

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

Relevance: CPB is a packaged food peer with North America exposure. Q3 FY2026 covers the February–April 2026 period. Commentary about FY2027 outlook is forward-looking and relevant.

• Input Cost Inflation (Forward-Looking): CFO Todd Cunfer flagged base inflation of ~3% pre-Middle East conflict, with an additional 2–3% if oil stays at ~$100/barrel, for potential total inflation of 5–6% in FY2027. Also flagged a driver shortage driving higher logistics and freight costs.
• HSY Read-Through: Contextual. CPB’s inflation is primarily oil/logistics-driven. HSY’s primary exposure is cocoa, which has its own supply/demand dynamics. However, packaging and freight costs are relevant for HSY, and the general inflationary backdrop is a headwind.
• Pricing Strategy (Forward-Looking): Management described list price increases as a "last resort," focusing instead on optimizing trade ROIs — prioritizing "feature in display" over shelf-only TPRs. Stated "no intention to give any tariff refund money back" given un-offset inflation.
• HSY Read-Through: Relevant. The emphasis on promotional ROI optimization (Revenue Growth Management) is consistent with HSY’s own price pack architecture strategy. The rational pricing stance supports HSY’s decision not to pursue additional pricing in 2026.
• Snacks Segment Pressure: CEO Mick Beekhuizen noted "near-term pressure on salty" snacks, with improvement expected as portfolio simplification and fixed cost reduction plans take shape.
• HSY Read-Through: Mildly negative for HSY’s salty snacks segment, but HSY’s salty business (SkinnyPop, Dot’s, LesserEvil) is in a different competitive position than CPB’s Snyder’s-Lance portfolio. HSY’s core branded salty grew ~10% in Q1.

Coca-Cola (KO) — Q2 2026 Earnings, July 28, 2026

Relevance: KO is a large-cap consumer staples peer. Its Q2 2026 results (reported July 28) cover the same calendar period as HSY’s Q2 2026.

• Volume-Driven Beat: KO reported 7% sales growth (vs. 5% expected), with 3% volume growth in North America. Raised full-year organic sales guidance to 5% and EPS growth guidance to 9–10%. CEO noted the company is "gaining traction with shoppers through sugar-free sodas, sports drinks, and water."
• HSY Read-Through: Positive for consumer staples sentiment broadly. KO’s volume-driven beat confirms that iconic branded consumer goods can drive volume even as consumers face budget pressure. The World Cup tailwind is KO-specific, but the underlying demand resilience is encouraging for HSY’s H2 tentpole strategy.

8. Insider Transaction Activity

Key Takeaway: All insider activity since the Q1 print is routine and plan-driven. The Hershey Trust continues its systematic 10b5-1 planned sales of ~10,000 shares per trading day — a long-standing structural program unrelated to company-specific views. CFO Steven Voskuil has made three small planned sales (~1,500 shares each) under a 10b5-1 plan established May 5, 2026. No discretionary open-market buys or unusual sale activity; nothing signals insider concern.

Source: SEC Form 4 Filings Database. Open-market buys (Form 4 code P) and discretionary sales (code S) only, plus 10b5-1 planned sales. No open-market buys were filed in the period.

9. Key Risks & Questions for the Call

Key Risks

• Guidance Raise Disappointment: The market is implicitly expecting a guidance raise at the midyear checkpoint. If management reaffirms rather than raises — citing macro uncertainty (SNAP, gas prices, geopolitical) — the stock could sell off despite a clean Q2 print.
• H2 Gross Margin Execution: Management guided >500 bps of gross margin expansion in H2 2026. Any signal that this is at risk — due to tariff delays on cocoa, higher-than-expected commodity costs, or supply chain disruption — would be a significant negative.
• CMG Market Share Erosion: Core chocolate market share declined year-over-year in Q1 due to competitive innovation and merchandising. If Q2 data shows continued share loss rather than the "sequential build-back" management guided, it would raise questions about the sustainability of the pricing strategy.
• Leadership Continuity Risk: Two senior departures in two months (US President Archambault in April, CSO Reiman in May). The US President role remains unfilled. Any further leadership changes or signals of organizational instability would be a negative.
• Salty Snacks Margin Recovery: Management guided double-digit operating income growth for the salty snacks segment in FY2026, after Q1 was impacted by one-time items (voluntary product withdrawal, delayed DC opening). If Q2 salty margins disappoint, it raises questions about the segment’s profitability trajectory.
• Consumer Macro Deterioration: SNAP benefit changes, elevated gas prices, and potential recession risk could accelerate consumer trade-down away from branded confectionery. GIS and CPB both flagged continued consumer pressure heading into H2.
• Cocoa Tariff Relief Timing: Management expressed cautious optimism about potential cocoa tariff relief but noted a "blanket exemption probably not in near-term cards." Any negative update on tariff relief would be a headwind to the 2027 margin recovery narrative.

Key Questions for the Call

1. Guidance Raise: "You said at the May Goldman Sachs conference that you’d have more visibility at the midyear mark to potentially take a different position on guidance. Given Q2 results and what you’re seeing in elasticities and H2 tentpole sell-in, are you raising full-year guidance today?"
2. Cocoa Cost Outlook: "Mondelez yesterday cited a cocoa surplus of at least 500,000 metric tons and 10 months of industry coverage. Can you characterize your own cocoa coverage position for 2026 and 2027, and does the current market structure give you confidence in the 2027 margin recovery narrative?"
3. Q2 Organic Sales Composition: "You guided Q2 organic sales to be slightly negative due to Easter timing pull-forward. Can you break down how much of the Q2 organic sales result was timing vs. underlying consumption trends? What did core branded consumption look like in April, May, and June?"
4. CMG Market Share: "You flagged CMG market share pressure in Q1 from competitive innovation and merchandising. Did you see the sequential build-back in Q2 that you expected? What’s your current share position heading into Halloween?"
5. H2 Gross Margin Confidence: "You guided >500 bps of gross margin expansion in H2. What gives you confidence in that number, and what are the key risks to achieving it? Has anything changed in your commodity or tariff cost assumptions since the Q1 call?"
6. US President Search: "It’s been three months since Andrew Archambault’s departure. Can you update us on the US President search timeline and how the interim coverage structure is working?"
7. Salty Snacks Segment: "You guided double-digit operating income growth for salty snacks in FY2026 after Q1 one-time items. Did Q2 salty margins recover as expected? How is the LesserEvil integration tracking?"
8. Halloween Setup: "Can you give us early reads on Halloween sell-in and retailer support? How does the setup compare to last year, and what’s your confidence level in the H2 tentpole contribution of ~1 point of growth?"
9. Premiumization: "The premium chocolate segment continues to outperform. You’ve characterized most premiumization initiatives as 2027 priorities. Is there any pull-forward of premium innovation into H2 2026, and how is the Hershey Krackel bar launch tracking?"
10. Capital Allocation: "With the stock trading at ~20x NTM P/E and free cash flow recovering, how are you thinking about capital allocation priorities — buybacks, dividend growth, or M&A — as you move through the margin recovery?"