The Numbers
The Hershey Company posted consolidated net sales of $3,275.5 million in the third quarter ended September 27, 2026, a 3.0% increase year over year. Organic, constant currency net sales grew a more modest 0.8%, with roughly 11 points of net price realization offset by approximately 10 points of volume decline. For the nine months ended September 27, adjusted EPS of $6.89 was up 49.1% versus the prior-year period, and the company now guides full-year net sales growth to approximately 5%.
The headline profit turnaround is striking: reported net income of $580.8 million in Q3 more than doubled versus Q3 2025, and reported operating profit of $817.7 million rose 88.1%, lifting reported operating margin to 25.0% from 13.7% a year ago. Adjusted gross margin expanded 1,090 basis points to 42.7%, driven by price realization, productivity savings, lower net commodity costs, and tariff refunds — the latter contributing approximately $0.22 per diluted share in Q3 alone.
Segment Breakdown
For c-store buyers and category managers tracking the candy, mint and gum set, the North America Confectionery segment — Hershey's core business — delivered net sales of $2,656.5 million, up 1.6%. Organic growth matched that figure, but volume fell approximately 11 points as price elasticity weighed on throughput. Hershey's U.S. CMG retail takeaway in the multi-outlet plus convenience store channel (MULO+ w/ Convenience) for the 12 weeks ended September 27 rose just 0.8%, held back by a tough comparison against a significant Reese innovation launch in the prior year. CMG share declined year over year for the period. Segment margin jumped to 35.8%, up 1,400 basis points, as tariff refunds and productivity program savings more than covered the volume shortfall and a 17.1% increase in advertising spend.
The growth story this quarter belongs to North America Salty Snacks, where the 2025 acquisition of LesserEvil contributed roughly 20 percentage points to the segment's 22.3% reported sales gain, bringing segment net sales to $392.7 million. Organic salty snack growth of 2.3% was supported by a 4.0% increase in U.S. retail takeaway in MULO+ Convenience, excluding LesserEvil — a figure that drove further market-share gains. Segment margin contracted to 12.1%, down 590 basis points, as higher freight, logistics, manufacturing, and commodity costs weighed on profitability. The International segment contracted 7.5% on a reported basis (down 9.7% organically), reflecting shipment timing, portfolio rationalization, and volume pressure from pricing actions.
What's Next
Hershey raised its adjusted EPS growth outlook to 36% to 38.5% for the full year, up from the prior guidance of 32.5% to 35%. The revised range implies full-year adjusted diluted EPS of $8.58 to $8.74. The update does not include potential future tariff refunds beyond those already received. The company targets approximately $100 million in savings from its Advancing Agility & Automation Initiative and projects capital expenditures of approximately $450 million for 2026.
For c-store operators, the near-term read is straightforward: Hershey's core confectionery brands remain on shelf and well-supported by double-digit increases in advertising, but shoppers are trading down or buying less as prices stay elevated. The salty snacks category — already a high-velocity segment at convenience retail — is gaining incremental momentum from LesserEvil's better-for-you positioning. Operators sourcing Hershey's confectionery and snack portfolio should expect sustained investment in demand creation heading into the critical Halloween and holiday selling seasons.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
