Hershey profit nearly doubles as price hikes counter soaring cocoa costs

The Hershey Company (NYSE:HSY) delivered a resilient start to 2026, posting net sales of $3.10 billion—a 10.6% increase that surpassed Wall Street expectations.

The performance was largely driven by a nearly 94% surge in reported net income, which hit $435.1 million, or $2.13 per diluted share.

Adjusted earnings per share reached $2.35, comfortably clearing the analyst consensus of $2.04.

The quarter’s results highlight Hershey’s ability to leverage pricing power to offset a challenging commodity environment.

Organic, constant-currency net sales rose 7.9%, primarily fueled by approximately 10 points of net price realization.

While these price hikes led to a 2% volume decline due to consumer elasticity, flagship brands Hershey’s and Reese’s remained strong, delivering non-seasonal retail sales lifts of 11% and 10%, respectively.

A key highlight was the North America Salty Snacks segment, which saw revenue jump 26% to $350.1 million.

This growth was heavily bolstered by the acquisition of LesserEvil, the organic popcorn brand Hershey added to its portfolio last year.

The deal contributed approximately 20 percentage points to the segment’s growth and is expected to provide a 150-basis-point benefit to the company’s total net sales for the full year.

Despite the top-line success, the company is navigating a complex margin landscape.

Reported gross margin expanded 570 basis points to 39.4%, aided by lower derivative mark-to-market losses.

However, adjusted gross margin contracted by 80 basis points to 40.4%, reflecting the persistent pressure of higher cocoa and sugar costs, alongside new tariff-related expenses.

Looking ahead, Hershey reaffirmed its full-year 2026 guidance, projecting net sales growth of 4% to 5% and adjusted EPS growth of 30% to 35%.