Hershey lifts 2026 earnings growth outlook after third-quarter beat

Organic sales growth was narrowed to about 3 per cent, which leaves the top line modest.

Hershey reported third-quarter earnings per share of $2.64, $0.51 more than expected. Revenue was $3.28 billion, in line with the same expectation.

For 2026, the company now expects net sales growth of about 5 per cent, up from a previous range of 4.5 to 5 per cent. Organic net sales growth is now about 3 per cent, narrowed from a range of 3 to 3.5 per cent. Reported earnings per share growth is now 84 to 90 per cent, up from 82 to 89 per cent. Adjusted earnings per share growth is 36 to 38.5 per cent, up from 32.5 to 35 per cent. The adjusted figure includes about $0.22 of tariff refunds received in the third quarter and $0.03 received in the second quarter. The company expects an effective tax rate of about 25 per cent, other expense of $5 million to $10 million, interest expense of about $200 million and capital expenditure of about $450 million. Its Advancing Agility & Automation Initiative is expected to generate savings of about $100 million.

Kirk Tanner, the company's president and chief executive officer, said: "Second-half demand creation initiatives are gaining momentum even as consumers grow more cautious." He said the company remains on track for solid sales growth and a meaningful margin and earnings recovery.

Part of the higher adjusted figure reflects the $0.22 per share of refunds received in the third quarter, and the outlook excludes any future refunds. With sales growth at about 3 per cent, the earnings story depends more on margin recovery. Hershey expects cocoa cost deflation in 2027, and that is the input that would have to carry the recovery once the refund benefit is gone. The next test is whether volume stabilises through the holiday season. Pricing has carried sales while shoppers buy less.