Hershey lifts its 2026 earnings outlook as tariff refunds boost profit and sales growth narrows

The chocolate maker now expects adjusted EPS growth of 36% to 38.5%, up from 32.5% to 35%, and trims its organic sales growth outlook to about 3%.

Hershey raised its 2026 earnings outlook after a third quarter in which EPS came in at $2.64, $0.51 above expectations, but part of the increase comes from tariff refunds and the sales outlook for organic growth was narrowed.

Revenue was $3.28B, in line with the $3.28B expected. The company now sees net sales growth of about 5%, up from a range of 4.5% to 5%. Organic net sales growth is now seen at about 3%, down from a range of 3% to 3.5%.

Adjusted EPS growth is now expected at 36% to 38.5%, up from 32.5% to 35%. That figure includes about $0.22 of tariff refunds received in the third quarter and $0.03 in the second. The outlook excludes any future refunds. Reported EPS growth is now seen at 84% to 90%, from 82% to 89%.

The company expects an effective tax rate of about 25%, interest expense of about $200 million and capital spending of about $450 million. Other expense is put at $5 million to $10 million. The Advancing Agility & Automation Initiative is expected to deliver savings of about $100 million.

CEO Kirk Tanner said demand creation initiatives in the second half are gaining momentum even as consumers grow more cautious. He said the company remains on track for solid sales growth and a meaningful recovery in margin and earnings.

With organic sales growth at about 3%, the top line stays modest, and the earnings recovery depends more on margins. Once the refund benefit is gone, that job falls to cocoa costs, which management expects to fall in 2027. The nearer test is whether volumes stabilise over the holiday season, since pricing has carried sales while shoppers buy less.