HSY

United Natural Foods, Inc. UNFI is likely to witness a top-line decline when it reports fourth-quarter fiscal 2026 earnings on Sept. 8. The Zacks Consensus Estimate for revenues is pegged at $7.6 billion, indicating a decrease of 1.6% from the year-ago reported number. The consensus mark for earnings has remained unchanged over the past 30 days at 62 cents a share, which suggests a significant jump from the loss of 11 cents recorded in the year-ago period. UNFI has a trailing four-quarter surprise of 29.9%, on average. United Natural Foods, Inc. price-consensus-eps-surprise-chart | United Natural Foods, Inc. Quote UNFI’s fourth-quarter top line is likely to have remained pressured by the ongoing impact of conventional product-focused network optimization. Management indicated that the larger optimization actions would not be fully lapped until the first quarter of fiscal 2027. The continued unwind of short-term project-based work in the Natural segment is also likely to have weighed on fourth-quarter sales.Nevertheless, underlying demand trends may have provided some support. On its third-quarter earnings call, management specifically identified natural-product growth as a tailwind for the fourth quarter, supported by continued shopper demand for natural, organic, fresh and specialty products. Low-single-digit food inflation anticipated through fiscal year-end may also have supported sales.UNFI’s fourth-quarter profitability is likely to have benefited from network optimization and continued productivity gains. Management cited optimization and productivity as fourth-quarter tailwinds, while technology deployments and lean practices have been improving fill rates, delivery execution and distribution-center throughput.However, management factored incremental fuel and transportation costs into its fourth-quarter expectations. UNFI also planned incremental investments in technology, supply chain and commercial capabilities, which could have partly offset benefits from natural-product growth, optimization and productivity. Our proven model doesn’t conclusively predict an earnings beat for United Natural this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. United Natural currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.The Chefs' Warehouse, Inc. CHEF currently has an Earnings ESP of +3.02% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at $1.13 billion, indicating a 10.4% rise from the figure reported in the prior-year quarter. The consensus estimate for Chefs' Warehouse’s earnings is pegged at 61 cents per share, implying 22% growth from the year-ago quarter. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.Mondelez International, Inc. MDLZ currently has an Earnings ESP of +4.63% and a Zacks Rank of 3. The consensus estimate for the quarterly revenues is pinned at $9.97 billion, which suggests 2.4% growth from the figure reported in the prior-year quarter. The Zacks Consensus Estimate for Mondelez’s upcoming quarter’s EPS is pegged at 72 cents, which calls for a decline of 1.4% from the year-ago period figure. MDLZ delivered a trailing four-quarter earnings surprise of 5.8%, on average.The Hershey Company HSY currently has an Earnings ESP of +0.98% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $3.3 billion, which indicates an increase of 2.3% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for Hershey’s upcoming quarter’s earnings per share is pegged at $2.11, which calls for 62.3% growth from the figure reported in the prior-year quarter. HSY delivered a trailing four-quarter earnings surprise of 21.8%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report Hershey Company (The) (HSY) : Free Stock Analysis Report Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The Hershey Company HSY delivered a much stronger second quarter, with earnings and margins rebounding as pricing, lower commodity costs and productivity improved profitability. Management also narrowed its 2026 sales and adjusted earnings outlook toward the upper end of prior ranges.The trade-off is that organic growth still depended heavily on price increases while volumes fell, and the stock continues to command a premium to its sub-industry. The investment case therefore hinges on whether the recovery is strong enough to justify that premium while execution risks remain. Hershey posted second-quarter adjusted earnings of $1.90 per share, up 57% year over year and above the Zacks Consensus Estimate of $1.45. Net sales increased 6.6% to $2,787.3 million, also exceeding the consensus mark of $2,649 million.Profitability improved sharply. Adjusted gross margin expanded 350 basis points to 41.6%, while adjusted operating margin rose 450 basis points to 20.2%. Pricing, lower net commodity costs and productivity savings more than offset higher logistics expenses and unfavorable mix. Image Source: Zacks Investment Research Organic, constant-currency sales rose 3.6% in the second quarter as roughly 12 points of net price realization offset an 8-point volume decline. North America Confectionery volume fell about 10 points as higher prices affected demand.Management said elasticity increased slightly but remained somewhat better than its full-year expectations. Hershey now expects 2026 net sales growth of 4.5%-5%, organic sales growth of 3%-3.5% and adjusted earnings growth of 32.5%-35%, leaving volume response central to the outlook. HSY trades at 19.95X forward 12-month earnings compared with 16.33X for its Zacks sub-industry and 17.49X for the Zacks Consumer Staples sector. The multiple remains below its five-year median of 25.02X but above the five-year low of 18.03X. Mondelez International, Inc. MDLZ is another global snacking company whose core business includes chocolate, with brands such as Cadbury Dairy Milk, Milka and Toblerone. Tootsie Roll Industries, Inc. TR operates solely in confectionery, with brands including Tootsie Roll, DOTS and Junior Mints. These alternatives add context to Hershey’s valuation while its volume trends remain pressured. North America Salty Snacks sales increased 22.9% to $387.8 million, but the LesserEvil acquisition contributed about 22 percentage points. Organic, constant-currency sales rose just 0.6%, even as retail takeaway excluding LesserEvil increased 6.5%.Execution remains the offset. Supply constraints affected multipacks and Dot’s pretzels, while segment income declined 5.9% to $62.6 million. The segment margin contracted 500 basis points to 16.1%, reflecting higher logistics costs, lower net price realization, increased consumer marketing and unfavorable mix. Image Source: Zacks Investment Research For now, Hershey’s profile supports patience rather than a clear buy signal. HSY carries a Zacks Rank #3 (Hold), a rating that can support holding a stock while the strongest purchase emphasis in the Zacks framework is generally reserved for Rank #1 and #2 stocks paired with favorable Style Scores. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.HSY has a VGM Score of B, Growth Score of A, Value Score of C and Momentum Score of C. The Growth Score and VGM Score are favorable grades, while the Value and Momentum readings sit below the A and B grades favored by the Style Score framework. Together, the ratings leave room for selective optimism without removing the valuation and execution questions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hershey Company (The) (HSY) : Free Stock Analysis Report Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Hershey stock has gained 22.0% over the past five years, and today there is a clear split between valuation tools. The Discounted Cash Flow (DCF) intrinsic value estimate points to meaningful upside from the current US$188.31 share price, while earnings based multiples lean expensive and the broader checks also flag caution. Over the last 5 years Hershey has returned 22.0%, which is a steady outcome rather than a runaway success story for long term holders. Hershey’s push to broaden its Halloween lineup into fruity candy and salty snacks may support future cash flow growth, but the shift beyond core chocolate also adds execution risk if consumer response or margins fall short of expectations. Hershey is currently scored as undervalued in just 2 of 6 valuation checks, which tilts the overall picture toward not being a clear bargain on the standard metrics. The issue now is whether investors should treat the DCF implied 37.1% discount as a genuine opportunity, or whether they should give more weight to the richer market multiples and low value score. Hershey delivered 8.2% returns over the last year. See how this stacks up to the rest of the Food industry. The Discounted Cash Flow (DCF) approach estimates what Hershey is worth based on the cash it can generate for shareholders. For Hershey, the model uses latest twelve month free cash flow of about US$2.0b and assumes these cash flows continue to grow rather than contract over time. On those inputs, the 2 Stage Free Cash Flow to Equity model points to an intrinsic value around $299 per share, compared with the current $188.31 share price. That implies the stock screens about 37.1% undervalued on this method. Hershey’s push into a broader Halloween portfolio across chocolate, fruity candy and salty snacks helps explain why the cash flow outlook used in the model is supportive, even if execution around new products carries risk. On the DCF figures alone, Hershey stock looks undervalued relative to the cash flows that are currently projected. Our Discounted Cash Flow (DCF) analysis suggests Hershey is undervalued by 37.1%. Track this in your watchlist or portfolio, or discover 50 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hershey. The P/E ratio suits Hershey because earnings remain a key anchor for how investors value a mature branded consumer company. Hershey trades on a P/E of about 25.4x, which is above both the Food industry average of 17.8x and the peer group average of 20.3x. That already points to a clear premium for the stock compared with many packaged food companies. The fair P/E ratio implied by the model is 22.0x, which is below Hershey’s current 25.4x. That gap suggests investors are paying more than the level implied by Hershey’s earnings profile, market position and risk factors. The Halloween expansion into fruity candy and salty snacks may help explain some willingness to pay more. However, the numbers show the stock pricing in a richer multiple than the tailored fair value benchmark. On the P/E multiple, Hershey stock appears overvalued compared with both its industry and the model’s fair ratio. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where this Hershey valuation puzzle leaves off. They spell out which expectations on Hershey's growth, margins and earnings would need to hold for the stock to be worth materially more or materially less than today's price, and they sit on Simply Wall St's Community page as structured viewpoints. Rather than relying on a single multiple or model, each one lays out the assumptions behind its fair value so you can compare them with future results. The community is split on Hershey, with one camp seeing a quality compounder on sale and the other arguing the price already reflects that strength. Bull case: 24% undervalued Read the full Bull Case to see why Hershey could be undervalued Bear case: 138% overvalued Read the full Bear Case to see why Hershey could be overvalued Do you think there's more to the story for Hershey? Head over to our Community to see what others are saying! Hershey looks undervalued on the Discounted Cash Flow (DCF) intrinsic value estimate, yet screens overvalued on earnings based multiples, and the broader checks remain weak. That gap comes down to what you trust more. The intrinsic view leans on cash flow strength and funding needs, while the multiples reflect current growth expectations, sentiment and where peers trade. The key debate from here is whether Hershey can grow and defend margins in its broader snack and Halloween lineup, or whether the market is correctly marking that execution risk into the price. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include HSY. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:00 a.m. ET President and Chief Executive Officer - Kirk Tanner Senior Vice President and Chief Financial Officer - Steve Voskuil Vice President of Investor Relations - Anoori Naughton Operator: Greetings, and welcome to the Hershey Company Second Quarter 2026 Question-and-answer session. As reminder, this conference is being recorded. I'd now like to turn the call over to your host, Anoori Naughton, Vice President of Investor Relations for the Hershey Company. Thank you. You may begin. Anoori Naughton: Good morning, everyone. Thank you for joining us today for the Hershey Company's Second Quarter 2026 Earnings Q&A session. I hope everyone has had the chance to read our press release and listen to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future financial and operating performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. Finally, please note that we may refer to certain non-GAAP financial measures that we believe provide useful information for investors. This information is not intended to be consideration in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations for the GAAP results are included in this morning's press release. Joining me today are Hershey's President and CEO, Kirk Tanner; and Hershey's Senior Vice President and CFO, Steve Voskuil. With that, we will take the first question. Operator: Our first question is from Andrew Lazar with Barclays. Andrew Lazar: Maybe to start, I'm curious what some of the sort of key puts and takes in the first half and specifically the second quarter were and where do you think consumption came in for the quarter relative to shipments as I know there's a lot of noise in the data we all get due to holiday timing and such. Kirk Tanner: Yes, you bet. I'm happy to take that one. And I'll speak to the first half as Easter creates a lot of noise in Q2 as you said, Andrew. U.S. confection retail consumption of about 3% understated our real demand by about 2 points, primarily due to the nonmeasured channel growth and the year-over-year concentration of Easter shipments in 2026. There's an additional point of growth reflected the retail inventory replenishment after levels ran low during the April transition to new pack prices. We expect that gap to be narrower as we look ahead to the second half shipments. Andrew Lazar: Okay. You mentioned elasticity is running a bit better than your full year assumption. Underlying consumption is clearly better than what we saw for the quarter in scanner data, as you noted. And it seems for the most part that the headwind in the quarter from maybe some of the overshipping in 1Q was more or less offset by some of the shipping ahead of 3Q holiday activations and plans. So I guess my question is, with the magnitude of the upside versus consensus in the quarter, really on both organic sales and EPS, why there would not be more flow through to the full year guidance? And it's greater investment behind all the activity you have coming, why would that not result in even better organic for the year, especially as the category overall seems really quite healthy. Kirk Tanner: Yes. Let me take that one. Hey, first of all, we really like our position in the second half to deliver growth, and we think we should look at the business in 2 ways. One, on a 1-year basis, you'll see growth on a 2-year basis, you'll see really good growth. We, of course, encounter tougher comps in the second half, led by the RESISOREO innovation that we had last year. That is still performing very well. but it was a very big success that we're overlapping. But we have plans so we have some big opportunities to build on our second half with our half 2 innovation and merchandising programs, things like Hershey the crem bars and we have the big Hershey movie also that has been really supported by customers. So we have some exciting programs in place for that. And we have solid visibility into our cost structure. So you should see we should see some good growth on a 1-year basis, and we should see really good growth on a 2-year basis. I think 1 other thing that I'm encouraged by in the second half is we have a robust Halloween plant. And so we can see those the visibility to that. So we're encouraged by what we see with Halloween. Steven Voskuil: Yes. I'll just add. We always expected the first half to be weighted to the top line given the laps that Kirk mentioned on the second half the modest guidance increase reflects the replenishment that was expected to happen more gradually over the course of the year, but was largely completed in Q2. And the balance is really just continued prudence for the macro factors. As you said, Andrew, the kind of working in our favor or at least inside our expectations so far. But yes, we want to be prudent as we get to the back half. Still a lot of moving variables. And as Dirk said, we do have some reinvestment planned on the back of that sort of action-packed innovation calendar. Operator: Our next question is from Max Gumport with BNP Paribas. Max Andrew Gumport: A good question. I just wanted to double-click on the second half. Specifically with regard to merchandising shipments. So your commentary includes remarks about managing the timing of 3 key merchandising shipments. I just want to make sure that there wasn't any unexpected pull forward of merchandising items into 2Q relative to your initial plans? If you could offer any color on that, please? Kirk Tanner: Sure, I'd be happy to. So there was a little over 1 point of shipments for Q3 merchandising that happened in Q2 that was just a little bit ahead of our expectations. However, that impact will largely neutralize against the extra shipping day in Q4, which is why we say the gap will be less material in the second half. Max Andrew Gumport: Very clear. And then looking a bit forward at your Investor Day, you provided great targets for organic sales and adjusted EPS in 2027. Can you provide an update on your visibility to these targets now that we're halfway to 26? And also perhaps comment on the interplay between these 2. And I'm specifically curious how dependent your EPS target is on your organic sales outlook Kirk Tanner: Sure. Yes, great question. So to clarify, the 2% to 4% range that we talked about is our long-term organic net sales growth algorithm for North America confectionery annual growth, of course, could vary based on category dynamics, seasonal timing, et cetera. For 2027, given the shorter Easter, we would see 2% is sort of the starting point for that segment in the '27 framework. On top of that, of course, we expect Salt and international to be accretive to total growth, and that's what keeps us within the long-term enterprise long-term algorithm. . And then keep in mind, when we set the earnings outlook for 2027, that framework was where we started. So the earnings outlook is based on that. If we now kind of say, okay, hey, we're halfway through the year, how do we feel? I would say based on what we know today, we continue to look at that framework that we laid out is achievable. The environment is dynamic, for sure. particularly around consumer behavior, competition, commodities, et cetera. But our plan was built with that flexibility and multiple levers to manage through the uncertainty. So we have good visibility into cocoa deflation next year, even if futures remain around current levels. And of course, we'll provide much more detail as we're closer to issuing 2017 guidance formally. But in summary, nothing we see today, commodities or otherwise would cause us to move away from that framework. Operator: Our next question is from Robert Moskow with TD Cowen. Robert Moskow: Can we dig a little bit deeper into dots. You cited some supply chain challenges, I think, the manufacturing facilities can you tell us specifically what happened? And is it an easy fix? Or is there something some kind of capital investment that needs to be made to upgrade the facilities? Kirk Tanner: Yes. Yes, I'll take that one, and thanks for the question. Yes, the dots business is very encouraging, but let me talk about a few specifics on this one. We really like what we're seeing from a consumer standpoint. I think first and foremost, with strong brand health metrics and consumer demand across the portfolio. So we continue to see robust runway for growth with our core brands and dots is leading the way. Now we have having said that, we have had some growing pains and keeping up with strong demand, particularly the dots business. and that is largely behind us. We saw this coming and we had already increased our investment in automation and capacity with capacity coming online in 2027 and so we feel good about that. Automation will start helping us right now. So that's why I say it's largely behind us because we can see the forecast, and we're in pretty good shape. And so I think the tough spot, the growing pains are largely behind us, and we're ahead of that for '27. So I feel like that's where we're at with dots and dots continues to be a growth driver for us. Steven Voskuil: And I'll just add, at the segment level, obviously, operating margin came in a bit below expectations due to those supply chain challenges. And as a result of that, we had to use more spot freight usage, a little bit higher logistics costs and some limited volume throughput versus what we had planned. Again, looking ahead, as Kirk said, we expect to see some margin improvement in the second half as we move to capture that demand and also optimize the supply chain while still having a little bit of a tail of elevated freight and logistics costs. Robert Moskow: Okay. Can a follow-up. July 4 was like 1 of these tech events that you called out. How did that go? And did these issues on dots impacted at all? Or is it executed, okay? Kirk Tanner: No, not really. I think that dots still has got tremendous opportunities around these, especially the salty temple moments. So you'll see that come to life later this fall with fall football. It was not a massive part of our fourth of July execution in the first place. And now that's an opportunity for our future. But when you see the balance of the year, you're going to start seeing dots in a lot of these salty moments where consumers are looking for brands like this. So you'll see some more breakthrough through that. So I feel good about where we're going. It didn't impact us that much for fourth of July. . Operator: Our next question is from Leah Jordan with Goldman Sachs. Leah Jordan: I want to follow up on the CoCo comments. You noted that you could see cost deflation into next year, even if they stay at current levels, and we've seen it creep up again here recently. Just curious if you could provide more color on your coverage or visibility on your cost into next year at this point. how we should think about the potential magnitude of deflation we could see? And any views on how you're thinking about cocoa supply? And are you planning any differently as you think about this potential omninew environment this year? Kirk Tanner: Sure. Well, let me take the first part and Kirk and I can tag team on the Cocoa supply chain question. So we've got good visibility into cocoa deflation next year. I don't think we're at this point in the year, we're going to get real specific on as we will as we get closer to year-end. But right now, we feel good about the deflation we're seeing. We've got a good track record of managing through commodity volatility. Again, with our hedging, pricing strategies, resilient categories, the productivity and every all the other levers that we routinely use to manage that. So we'll share a lot more detail. I would just say we're in a spot where we didn't typically be at this time of the year and with all those levers available to us as we look to '27. Steven Voskuil: Yes. Let me talk a little bit about what we're seeing in the cocoa supply. So El Nino, you brought that up. El Nino speculation is certainly impacting pricing today and lately but we do not expect Cocoa to remain at current levels long term for a few reasons. If you remember the '23, '24 cycle, this is very different from that. And a couple of factors that we're seeing. One, we're coming off of historic surpluses. Inventories are healthier supply is more diversified, and the industry is much more agile. The recent '26 and '27 West African crop data is, I'd say, encouraging after a slow start. So even if some of the origins are impacted by El Nino, we believe the market is already pricing it in. There is plenty of cocoa supply globally. And given that view that there's room for prices to come down, as you can imagine, the hedging strategies we use will allow flexibility to participate in further deflation as the markets normalize. Leah Jordan: That was great color. And then I just wanted to ask about gross margin for this year. You slightly lowered the guide, I think, now slightly below 400 basis points versus just 400 basis points before. Maybe you could help us think about the magnitude we should think about there? Or how do you characterize the word slightly. And I guess what are you embedding in the guide for higher logistics cost in the back half? And any phasing we should keep in mind for 3Q versus 4Q on gross margin? Kirk Tanner: Yes. So we still have as you have pointed out, a significant lift in gross margins in the back half. We continue to see the commodity benefit coming through much more significantly than we did in the first half. And so that remains unchanged. And we're just below 400. We're not materially shy of the 400 kind of use that as the reference point, we used previously a little above, I would say now just a little bit below. And some of that is just some of the salty components coming through as we work through those challenges. On the other side, productivity is doing really well. And so we're encouraged by what we see. I think we'll have a strong finish on productivity. We just have to work through those optimization components on salty here over the last quarter. Operator: Our next question is from Peter Galbo with Bank of America. Peter Galbo: Steve Kirk. I wanted to circle back on the confection piece of it and maybe drilling a bit more on the untracked piece. It's not something we often hear a lot about. And again, if the math is correct, it suggests it was like 200 basis points of growth for the first half. So maybe you can just, again, unpack that untracked piece a bit more. I don't know if it was World Cup-driven, people descended on the Times Square Hershey store? Like what exactly is going on in that piece that we all can see to kind of drive the outperformance? Kirk Tanner: Yes, happy to take that one. Really, it's not quite that much. The biggest component inside there is food service, and we did see a pretty big pickup on the foodservice side. We also have some specialty retail and some other things that fold into that nonmeasured channel, but probably foodservice was the biggest piece. It also includes some compression of Easter shipments inside that number as well. So those are the factors. I think those are the biggest ones probably to call out. . Peter Galbo: Okay. And maybe just, Steve, to your commentary in the prepared remarks, you mentioned that 3Q is still expected to kind of be strongest year-over-year earnings growth period. I think that was always the case, just given some of the comps, but maybe you can just remind us like what's embedded in the base period of 3Q of last year that still drives that pretty material earnings growth for 3Q specifically. Steven Voskuil: Sure. Yes, the biggest factor is you had the highest cocoa cost last year. And I would say the full brunt of tariffs. And so those are the 2 biggest things we'll be lapping in the third quarter this year. So bigger tailwind in the third quarter than we'll see in the fourth. . Operator: Our next question is from Michael Lavery with Piper Sandler. Michael Lavery: I just wanted to touch on international. You called out in the prepared remarks, good momentum there, but there's also some margin pressure and we look back at like 22, 3 and 4, full year margins were above double digits. But last 6 or so quarters, it's running close to flat. Is there a structural change? Is that just some investments? And I guess also, can you just elaborate some on what is working with the top line? And just to give an update on all that. Kirk Tanner: Sure. I'm happy to take kind of a start through that. Some real pockets that we're excited about, Brazil, the U.K., India, in particular, has were probably some of our strongest performing markets through the first part of the year, demand is running ahead of plan. So I feel good about that. Mexico, macro conditions continue to be challenging. But as we look across international in total, there's probably nothing from a competitive standpoint that were that kind of changes our long-term view that this is a positive opportunity for continued growth. On the margin side, in particular, you're seeing the higher cocoa costs flow through with a little bit of a delay in international as well as some higher logistics and freight impacting that segment as well. And then as we turn the year, so the first half is very strong as we kind of move to the second half, we are going to continue to do some optimization work to help long-term profitability in the international business. We'll probably share more about that as we get further in towards the end of the year. But that will be that's expected to be a little bit of a drag on margins in the back half relative to the front half will ultimately unlock further margin improvement as we look forward. So in total, very excited about that business, strong first half, some real pockets of strength, but also we're making choices to set it up for long-term success. Steven Voskuil: Yes. I'll just add a few things. When we look at the portfolio in these anchor markets. We like what we're seeing. We like the competitiveness, how we're performing in markets like Mexico, Brazil, Canada, the U.K. So we like the performance. We're building momentum. There's certainly some opportunities, and we've seen real progress inside the business. Michael Lavery: Okay. Great. That's helpful. Just coming back to buybacks. You seem to have indicated typically, it's 1 of the lower priorities in capital allocation you've obviously been investing in the business. It doesn't look like you've got M&A as that we're aware of kind of ready to get announced. But is there room for more deployment to buybacks for the second half? How should we think about that? Kirk Tanner: So we always want to be good stewards of the shareholders' capital. And so as he said, I would never call it a low priority. It's probably down the pecking order behind the organic investment and smart M&A choices and so forth. And as you've heard, we've got some great organic investments for waking behind the pack innovation calendar, et cetera. The M&A pipe, we continue to work in that space and want to make sure that we always have capacity but share buybacks puts good tension into the process. And so as we sit here today, I would say we don't have anything in the back half plan for additional share buybacks, but we're going to remain optimistic and you saw we've got some additional authorization and that just reflects, again, the ability to make sure we're being good stewards of cash, not sitting on it, making sure we're deploying it wisely. So nothing more planned, but we're going to remain optimistic or opportunistic, I should say. Operator: Our next question is from Chris Carey Wells Fargo. Christopher Carey: Hi. Good morning, everybody. Good morning. Steve, I wanted to just ask a question about the medium-term targets that you've laid out at the recent Investor Day and in light of the recent rise in cocoa prices. I think there's a dynamic where the year-to-date cocoa prices will have allowed you to be quite well hedged for 2027. That in mind, 2028 prices are tracking around over 2027. And certainly, your medium-term outlook implies maybe like a low double-digit growth rate from where guidance is today? I realize that can move around based on where 2027 and 2028 land, but certainly strong earnings growth over the next several years into 2028. And I guess my question is, how much of that path into your 2028 aspirations will be dependent on you needing to see cocoa deflation maybe material relative to where your 2026 cocoa coverage is, rather than things that you can control yourselves or potential longer-dated hedging that you could do earlier than normal to give you the sort of visibility to achieve those targets? Kirk Tanner: Sure. 2028 is a long time away. So we'll have some work to do to fine-tune the outlook there. But philosophically, we have good visibility into deflation for cocoa for 2027. Certainly, we'd love to see it have a multiyear run where we could capture that. At the same time, we're not sitting still basing the whole business around cocoa, right? We want to continue to drive meaningful top line growth. We want to restore volume over time. We want to bring the best innovation to the category, be the best partner for retailers, and we want to be smart between the lines driving ongoing productivity savings, particularly off the back of our technology and capacity investments. So I would say, as I look to the future, continuing to grow the business and have margin improvement is not solely resting on cocoa deflation by itself. Certainly, that's going to be help for 2027. It's in the plan. Christopher Carey: Okay. The second is around margins in the second but you've seen an increase in freight and logistics costs that's part of the slightly lower gross margin outlook for the year. Can you give us a sense of how you're viewing margins in your snacking business in the back half of this year and perhaps more term given some of the dynamics you're dealing with right now? Kirk Tanner: Yes. We've got some margin pressure in the snacking business in the back half, really principally around those factors as we get further into fully optimizing the supply chain off the back of the investments that Kirk mentioned earlier, we do expect modest margin improvement as we go through the second half. So we're expecting improvement but we'll be in better shape as we get to 2027, and I'd say we've got the supply chain more fully optimized. Until then, we're going to still have, like I said, at least a tail of elevated freight and logistics, mostly because we're going to spot market to maintain service while we optimize internally. Operator: Our next question is from David Palmer with Evercore ISI. David Palmer: Just first of all, thanks for the comments on 2027 and including that 2% confection sales growth target. I would imagine that will be a focus area for people at the as confidence grows that you could do that, then that would be reflected in the stock. So maybe that's worth double-clicking about what you think will be needed to achieve that in terms of market share, how much is market share stabilization, a priority and a necessity to do that type of growth? Just how are you thinking about that? And then how if any way are you adjusting to what you've been seeing so far this year? Kirk Tanner: David, I'll take that one. Yes, I think that's a really important question because I think it drives this disciplined approach to the balance that we're driving in the business. And we remain confident we can make progress on both margin and share over time. So this year, I would just say we are on track to deliver our top line, our margin and our EPS expectations. Now the market is hypercompetitive. And that the competition in this category really drives the resiliency and the durability of growth. And we're seeing a lot of innovation growth this year. And we're building an innovation pipeline. We have a big innovation plan for the second half. We talked a little bit about it in our comments. And we have a pipeline in '27 and '28 that we have reviewed already that gives us confidence that we're going to build that share momentum. What I like about margin recovery and share performance, is it's in the right place is innovation that drives growth and profitability is a great way to grow the category and grow the business. That's why we have confidence that we can make meaningful progress on both margin and share performance. David Palmer: I wonder on the topic of innovation versus perhaps these activations or tentpoles that you've been doing this year. has anything surprised you or in terms of the response on the tentpole stuff? And then how would you characterize sort of the give and takes the year-over-year comparables of your intensity of tentpoles and innovation in '27 versus what we're seeing in '26, and I'll pass it on. Kirk Tanner: Yes. No, that's a really good question. If you think about how we look at the business, we look at our core everyday business, our performance around seasons. We've added this dynamic with tentpoles. And it's really raised our execution on some key things. I would tell you, I would look to the summer execution with the celebration of 250 and our smores performance. It was exceptional. It gets better every year and the bar gets higher and it's something that we're famous for, but we could take it even further. We added innovation in the space with I don't know if you guys are making mores, but she got to get on board, especially with the Carmel, that is growing our business, plus the execution around the temp pole is good. I expect us to get even better at these tent-pole moments, I think, about fall football. We like them because they fit nicely in between the seasons. But we look at the business just like that. We look at how we're performing on our everyday business, our immediate consumption business. Our seasons were incredibly disciplined around seasons, and that's why if you think about the first half, we gained share across seasons. We like what we see in the second half with the holiday season in Halloween. So we'll still stay focused on that because that's a huge part of the business. And then supplement the growth with the tent poles. And I can tell you we're getting better at those as time goes on. Operator: Our next question is from Alexia Howard with Bernstein. Alexia Howard: Need you for the question. Can we ask about the outlook for volume recovery in the North American confectionery segment? Obviously, price growth is going to slow. Would you expect a fairly rapid improvement in the volume trends as we move into the back half announcing to 2027? Kirk Tanner: Yes. Let me take that one. Look, as commodity inflation eases and pricing elasticities normalize, we expect volume trends to improve over time. I'd tell you, in Q4, we still have some high single-digit pricing that's tied into the seasonal actions that we've taken. But we look at the coming year, and we expect early signs of improvement coming across especially our Hershey brand portfolio, we have a lot of activity in Q4 with the Hershey movie. So we see that recovering early, Jolly Rancher, our premium bands, including Cadbury, we see some momentum. That momentum will continue through 2027. Alexia Howard: Great. And then as a follow-up on continuing with pricing, Salty snacks, you had pricing slightly down this down this quarter. because of the investment in trade promotion, I believe. Is that expected to continue into the back half of the year? Kirk Tanner: I think from a Cell team perspective, we're going to see balance. Of course, we constantly look at pricing as an equation or certainly strategic pricing understanding inflationary pressures on the business and being competitive and being right with consumers. So it's a balanced approach with that, that's how we take a disciplined approach across all of our businesses. But I think there's not going to be any big surprises from a salt pricing standpoint in the second half of this year. Operator: Our next question is from Peter Grom with UBS. . Peter Grom: Great. Thank you. Good morning, everyone. So I wanted to follow up on an earlier question around '27. And I think you noted the framework still holds based on where things stand today. You have good visibility on cocoa depletion but you also touched on kind of the external volatility that has picked up this year. And I guess I would imagine that when you provided annual guidance 2 years out back in March that you probably embedded more flexibility than usual. So just Serus, given how the environment has evolved, has that level of cushion shifted at all? Or is it really unchanged? Kirk Tanner: It's definitely been volatile. But I would say is next year more volatile than this year or last year, it's hard to say. But to your point, when we built that outlook, we take account of all the levers that we have inside the P&L to manage across. So that's levers on sales, pricing and volume, but also levers in the rest of the P&L as well as how we think about investments, reinvestment, productivity and so forth. And again, picking on productivity a little bit, it's a place where we've been able to overdeliver for a number of years. And that make some smart investments in technology and capabilities that will bear increasing impacts as we go forward. So notwithstanding what will no doubt be a very volatile 2027. We still feel that the framework that we articulated earlier this year is still the right starting point for the year. Peter Grom: And then you noted that Snap impacts have been pretty modest, and I think reductions have been better recently they were earlier in the year. So can you maybe just speak to that specifically? And maybe what's embedded in the outlook for the year. Kirk Tanner: Yes. Let me take that one. We've been staying very close, obviously, to this one. The Snap waivers versus the outlook. I would say it is really it's slightly better. And so it's what we plan. I thought we did a really good job planning for the impact of Snap, and we've been very close to it. Where the difference comes in is the early adopting states had a little bit higher of an impact than the recent states, notably, Texas and Florida. So they've been on the lower end. So the balance of that has been where we've seen a little bit of upside. But overall, I would say it's in line with what we planned. And that for me running this business, it feels like that's the right approach, being able to understand the macro and plan for it accordingly. And so that gives us the confidence moving forward that we can have a good eye on these macro impacts. Operator: Our next question is from Scott Marks with Jefferies. Scott Marks: I wanted to ask about the cadence or phasing of the top line in the back half it sounds like there's a lot of moving pieces between lapping tensor innovation, some of the new innovations coming out like cream bars as well as the pieces with cookie, Hershey movie, recovery from some of these salty supply challenges. So just wondering if you can give us an idea of the shape of Q3, Q4 across the different segments. Steven Voskuil: Yes. I'll just say on the North America confection business, it's possible we'll see some periods of negative everyday confection retail sales growth, but we anticipate strong seasonal performance -- and for organic net sales, we expect growth in both Q3 and Q4 for the segment. So we've got some tough laps, but for the quarters overall for the segment, we expect to see some growth. And as we talked about earlier, the second half shipment gap is expected to be less material in Q3 program shipments and the impact of that extra shipping day will help to neutralize that. So that's about as much color as we're probably going to give on the profile. It's like Kirk said at the beginning, it's pretty action-packed back half given the innovation launches. Scott Marks: Understood. Appreciate the color there. And then second question for me. In the prepared remarks, I think you called out ANC expense down about 3% in the quarter. Wondering if you can unpack that a bit for us? Why was it down? And how should we be thinking about the cadence of the ramp into H2 and as we get into next year? Kirk Tanner: Yes. Let me take that one. It really is tied to the programming that we have. And the balance of the year, we have quite a bit of programming that supports the innovation launch that supports the Hershey movie and then supports movement into 2027, meaning we're investing in things in the fourth quarter that should give us momentum and get off to a good start in 2027. So it comes down to the timing of programming and investments against the big initiatives that we have to create demand and to execute against the demand. It's mostly timing. And then the second half, we have good investment against delivering on our core brands, Reses and Hershey. But you'll also see programming around Cadbury, PayDay and fulfill. So we like the investments we're making, and they're tied to driving the growth and keeping the momentum going. Operator: Our next question is from Jim Salera with Stephens Inc. James Salera: Maybe to circle back to the conversation around pricing on Salt. I know there's been a lot of table discussions about pricing coming down across the categories, some other high-level large brands talking about taking some net price declines. Can you just give us some color on where your brands sit on the price ladder relative to peers in that category? Kirk Tanner: Yes. What I would tell you is we've been very prudent and patient with pricing on the Salt business. The pricing gaps have narrowed, but we -- if you look at a piece of history, we've been very balanced in our pricing on our selfie business. and very competitive. And I would say that is our focus. We will be competitive with price points in the categories that we participate in. Now we participate in a premium position with our core I mean, our core brands, especially Skinny Pop and three, they are premium and permissible. And of course, now with less Revo performing very well. I'd say overall, our pricing structure has been very disciplined very competitive position right where consumers expect it. So I think it's a bit different than the rest of the category. I think we're in a really good place. James Salera: And if I could shift gears and ask, we talked a lot about the tent poles and the contribution this year and in the back half of the year, but give us some thoughts on media consumption occasions and everyday consumption on confectionery particularly in the prepared remarks, you highlighted consumer softness persists, but elasticities are still a little bit better. And so you're trying to square is there something we should be on the lookout for given the macro uncertainty that might swing those elasticities either more to negative or anything that keeps you confident that we'll continue to move forward at a better pace. Kirk Tanner: Yes. The elasticities have been, like we said, they're on track or slightly better. And that's exactly how we look at the business. We look at our immediate consumption business and our execution across convenience and our take-home business. And those are really important core business that we look at. And that's where we've seen stable elasticities or at least against what we've planned. So that gives us the confidence. So that's exactly how we look at it. And then we fold in seasonal performance and then tent poles. But our starting point is always our core business, and that's our take-home business and our immediate consumption business. And when we talk about those elasticities, those are what we're talking about being on track. Operator: Our next question is from Tom Palmer with JPMorgan. . Thomas Palmer: Thanks for the question. Maybe I could just start out on just the topic of price gaps in chocolate. They have widened, especially versus a key competitor. In the release, I think some of the volume share changes we've seen were discussed as more being related to innovation could we maybe just unpack what you're seeing in terms of price gap versus innovation as drivers of that share? And then based on your innovation timing, when do you think we're going to start to see a real shift in kind of unit share on your end? Kirk Tanner: Yes. Let me take that 1 as well. look, first, the year-to-date share dynamics losing my voice this morning. I apologize to everyone. Look, year-to-date share dynamics is largely driven by innovation. Our pricing and our price gaps are largely as expected and our elasticities, as we just talked about, are tracking slightly ahead of our expectations year-to-date. So we watch these price gaps all the time, and we want to be competitive in the market. We will be competitive in the market. We regularly also make small adjustments where we see opportunities. . And moreover, we'll invest in trade in the second half to support the big innovation and merchandising programs, just like we talked a little bit about so when we go to market with our customers, we support the things that we're putting out on the perimeter that we're selling that we're driving that growth. But a couple of big drivers that I talked a little bit about earlier that are happening in the category, which I really love about this category and the resilience of it is innovation plays a big role. Innovation has played a big role this year. innovation will play a big role in '27 and '28. And I love our pipeline that we have on innovation starting in the second half, going into '27 and '28. So that gives you confidence that we're going to be very competitive and grow the category or ahead of the category. Thomas Palmer: Got it. And then, Steve, maybe could we put a fine. Could we put a finer point on how we think about third quarter in the context of having the highest earnings growth for the year I mean any sort of range maybe would be ideal. But as a starting point, the absolute level of earnings, should we think about 3Q or 4Q being higher? Kirk Tanner: Yes, I don't want to get as specific as starting to give more quarterly guidance. But I would say, from an EPS, which quarter, they're probably pretty close across the 2 between in absolute dollar EPS and I'm looking across at a Nuro say did I get that right? Yes. So but that's probably as much color as I think it's reasonable give. . Operator: Our next question is from Steve Powers with Deutsche Bank. Stephen Robert Powers: Great. Just 2 quick. Follow-ups, I guess. The first one, Kirk, elasticities, as described, tracking in line or slightly better. I guess does that hold true as you look across performance maybe by income cohort. Just curious if there's any subtleties there? And if so, in terms of the broader revenue growth management strategy. Anything that you might tweak in the program looking forward versus what you've been doing so far? Kirk Tanner: Yes. I mean I think this is always a dynamic place to look. I look at the channels in which we are participating, and we've got really good balanced growth across channels, across the dollar convenience channels. I would tell you, just the consumer studies that we do, low-income households certainly are feeling more pressure, but we're still seeing a balance across those channels right now. I would tell you, so the elasticities that we're seeing are very consistent with what we would expect. But we're always paying attention to the consumer and what their needs are, and we're looking at solutions through packaging and other offerings for consumers by channel so that we do stay hyper-focused on delivering what they're looking for and driving affordability. And so that's really still important to us. and part of our ongoing strategy. Stephen Robert Powers: Okay. Great. Great. And then just on the upcoming Halloween season, maybe just a bit of a further preview on programming, just kind of what you're planning, engagement with retailers, et cetera? And maybe if there's anything different than what we've seen in the past? Steven Voskuil: Yes. Look, we took a lot of learnings from Halloween. And we've already started shipping Halloween, so have good visibility to the orders -- and our activation plan with our frontline sales team is really dialed up this year. And I would say we've got great support with our customer partners on bringing this to life. So again, Helane starts fairly early. We even call it summer wind. It's off to a really good start. So it's coupled to, hey, look, what did you learn from last year how can we reach consumers better, how we can be better partners with our customers. We put those things into place for this year's Halloween and we feel good about where we're going to be. Operator: Thank you. We have reached the end of our question-and-answer session. This concludes today's conference. You may disconnect your lines. Thank you, again, for your participation. Before you buy stock in Hershey, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Hershey wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* That performance is why people listen. 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Hershey (HSY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the gap between U.S. confection retail consumption and shipments to non-measured channel growth and the year-over-year concentration of Easter shipments. Performance in the North American Salty Snacks segment was hampered by 'growing pains' in the Dot's Pretzels business, specifically manufacturing capacity constraints that led to higher spot freight and logistics costs. The company successfully completed retail inventory replenishment in Q2 following low levels during the April transition to new pack prices, earlier than the gradual recovery originally anticipated. Strategic positioning remains focused on 'tentpole' marketing events, such as the summer S'mores campaign and upcoming movie tie-ins, to supplement core everyday and seasonal business cycles. International growth momentum is being driven by strong demand in Brazil, the U.K., and India, though Mexico remains challenged by macroeconomic conditions. Management emphasized that the category remains resilient despite hyper-competitive dynamics, with innovation serving as the primary driver for both market share and margin recovery. The 2027 framework remains achievable, with management citing high visibility into cocoa deflation next year even if futures remain at current levels. Volume trends in North American confectionery are expected to improve as pricing elasticities normalize and the company laps high single-digit pricing actions from previous seasonal cycles. The company expects a significant lift in gross margins in the second half of 2026 as commodity benefits flow through more substantially than in the first half. Supply chain optimization for the Salty Snacks segment is expected to be fully realized by 2027, with automation and new capacity investments coming online to address current throughput limitations. Guidance for the remainder of 2026 assumes a robust Halloween season and a heavy innovation calendar, including the launch of Hershey's Cream bars and movie-related merchandising. Supply chain challenges in the salty segment resulted in operating margins coming in below expectations due to limited volume throughput and reliance on expensive spot freight. Management noted that while El Niño speculation is impacting current cocoa pricing, they believe the market is already pricing in these risks and that global supply remains healthy. International margins are expected to face a temporary drag in the second half of 2026 as the company undergoes optimization work to unlock long-term profitability. Low-income households are showing signs of increased pressure, though management stated that elasticities across dollar and convenience channels remain consistent with internal plans. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed the 2% to 4% long-term organic growth algorithm remains the target, with 2% as the starting point for 2027 due to a shorter Easter period. The earnings outlook is not solely dependent on cocoa deflation; it relies on a combination of volume restoration, innovation, and technology-driven productivity savings. The company admitted to 'growing pains' in keeping up with robust demand for Dot's, necessitating increased investment in automation and capacity. Capacity issues are expected to be largely resolved by 2027, with immediate relief coming from new automation initiatives currently being implemented. Management argued that the current cycle differs from 2023-2024 because inventories are healthier and supply is more diversified. Current hedging strategies are designed to provide flexibility to participate in further deflation as markets normalize, rather than locking in peak prices. The impact of SNAP waivers has been slightly better than planned, with early-adopting states showing higher impacts than more recent states like Texas and Florida. Management expressed confidence in their ability to forecast and plan for these specific macroeconomic headwinds.

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:00 a.m. ET President and Chief Executive Officer - Kirk Tanner Senior Vice President and Chief Financial Officer - Steve Voskuil Vice President of Investor Relations - Anoori Naughton Operator: Greetings, and welcome to the Hershey Company Second Quarter 2026 Question-and-answer session. As reminder, this conference is being recorded. I'd now like to turn the call over to your host, Anoori Naughton, Vice President of Investor Relations for the Hershey Company. Thank you. You may begin. Anoori Naughton: Good morning, everyone. Thank you for joining us today for the Hershey Company's Second Quarter 2026 Earnings Q&A session. I hope everyone has had the chance to read our press release and listen to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call. Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future financial and operating performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings. Finally, please note that we may refer to certain non-GAAP financial measures that we believe provide useful information for investors. This information is not intended to be consideration in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations for the GAAP results are included in this morning's press release. Joining me today are Hershey's President and CEO, Kirk Tanner; and Hershey's Senior Vice President and CFO, Steve Voskuil. With that, we will take the first question. Operator: Our first question is from Andrew Lazar with Barclays. Andrew Lazar: Maybe to start, I'm curious what some of the sort of key puts and takes in the first half and specifically the second quarter were and where do you think consumption came in for the quarter relative to shipments as I know there's a lot of noise in the data we all get due to holiday timing and such. Kirk Tanner: Yes, you bet. I'm happy to take that one. And I'll speak to the first half as Easter creates a lot of noise in Q2 as you said, Andrew. U.S. confection retail consumption of about 3% understated our real demand by about 2 points, primarily due to the nonmeasured channel growth and the year-over-year concentration of Easter shipments in 2026. There's an additional point of growth reflected the retail inventory replenishment after levels ran low during the April transition to new pack prices. We expect that gap to be narrower as we look ahead to the second half shipments. Andrew Lazar: Okay. You mentioned elasticity is running a bit better than your full year assumption. Underlying consumption is clearly better than what we saw for the quarter in scanner data, as you noted. And it seems for the most part that the headwind in the quarter from maybe some of the overshipping in 1Q was more or less offset by some of the shipping ahead of 3Q holiday activations and plans. So I guess my question is, with the magnitude of the upside versus consensus in the quarter, really on both organic sales and EPS, why there would not be more flow through to the full year guidance? And it's greater investment behind all the activity you have coming, why would that not result in even better organic for the year, especially as the category overall seems really quite healthy. Kirk Tanner: Yes. Let me take that one. Hey, first of all, we really like our position in the second half to deliver growth, and we think we should look at the business in 2 ways. One, on a 1-year basis, you'll see growth on a 2-year basis, you'll see really good growth. We, of course, encounter tougher comps in the second half, led by the RESISOREO innovation that we had last year. That is still performing very well. but it was a very big success that we're overlapping. But we have plans so we have some big opportunities to build on our second half with our half 2 innovation and merchandising programs, things like Hershey the crem bars and we have the big Hershey movie also that has been really supported by customers. So we have some exciting programs in place for that. And we have solid visibility into our cost structure. So you should see we should see some good growth on a 1-year basis, and we should see really good growth on a 2-year basis. I think 1 other thing that I'm encouraged by in the second half is we have a robust Halloween plant. And so we can see those the visibility to that. So we're encouraged by what we see with Halloween. Steven Voskuil: Yes. I'll just add. We always expected the first half to be weighted to the top line given the laps that Kirk mentioned on the second half the modest guidance increase reflects the replenishment that was expected to happen more gradually over the course of the year, but was largely completed in Q2. And the balance is really just continued prudence for the macro factors. As you said, Andrew, the kind of working in our favor or at least inside our expectations so far. But yes, we want to be prudent as we get to the back half. Still a lot of moving variables. And as Dirk said, we do have some reinvestment planned on the back of that sort of action-packed innovation calendar. Operator: Our next question is from Max Gumport with BNP Paribas. Max Andrew Gumport: A good question. I just wanted to double-click on the second half. Specifically with regard to merchandising shipments. So your commentary includes remarks about managing the timing of 3 key merchandising shipments. I just want to make sure that there wasn't any unexpected pull forward of merchandising items into 2Q relative to your initial plans? If you could offer any color on that, please? Kirk Tanner: Sure, I'd be happy to. So there was a little over 1 point of shipments for Q3 merchandising that happened in Q2 that was just a little bit ahead of our expectations. However, that impact will largely neutralize against the extra shipping day in Q4, which is why we say the gap will be less material in the second half. Max Andrew Gumport: Very clear. And then looking a bit forward at your Investor Day, you provided great targets for organic sales and adjusted EPS in 2027. Can you provide an update on your visibility to these targets now that we're halfway to 26? And also perhaps comment on the interplay between these 2. And I'm specifically curious how dependent your EPS target is on your organic sales outlook Kirk Tanner: Sure. Yes, great question. So to clarify, the 2% to 4% range that we talked about is our long-term organic net sales growth algorithm for North America confectionery annual growth, of course, could vary based on category dynamics, seasonal timing, et cetera. For 2027, given the shorter Easter, we would see 2% is sort of the starting point for that segment in the '27 framework. On top of that, of course, we expect Salt and international to be accretive to total growth, and that's what keeps us within the long-term enterprise long-term algorithm. . And then keep in mind, when we set the earnings outlook for 2027, that framework was where we started. So the earnings outlook is based on that. If we now kind of say, okay, hey, we're halfway through the year, how do we feel? I would say based on what we know today, we continue to look at that framework that we laid out is achievable. The environment is dynamic, for sure. particularly around consumer behavior, competition, commodities, et cetera. But our plan was built with that flexibility and multiple levers to manage through the uncertainty. So we have good visibility into cocoa deflation next year, even if futures remain around current levels. And of course, we'll provide much more detail as we're closer to issuing 2017 guidance formally. But in summary, nothing we see today, commodities or otherwise would cause us to move away from that framework. Operator: Our next question is from Robert Moskow with TD Cowen. Robert Moskow: Can we dig a little bit deeper into dots. You cited some supply chain challenges, I think, the manufacturing facilities can you tell us specifically what happened? And is it an easy fix? Or is there something some kind of capital investment that needs to be made to upgrade the facilities? Kirk Tanner: Yes. Yes, I'll take that one, and thanks for the question. Yes, the dots business is very encouraging, but let me talk about a few specifics on this one. We really like what we're seeing from a consumer standpoint. I think first and foremost, with strong brand health metrics and consumer demand across the portfolio. So we continue to see robust runway for growth with our core brands and dots is leading the way. Now we have having said that, we have had some growing pains and keeping up with strong demand, particularly the dots business. and that is largely behind us. We saw this coming and we had already increased our investment in automation and capacity with capacity coming online in 2027 and so we feel good about that. Automation will start helping us right now. So that's why I say it's largely behind us because we can see the forecast, and we're in pretty good shape. And so I think the tough spot, the growing pains are largely behind us, and we're ahead of that for '27. So I feel like that's where we're at with dots and dots continues to be a growth driver for us. Steven Voskuil: And I'll just add, at the segment level, obviously, operating margin came in a bit below expectations due to those supply chain challenges. And as a result of that, we had to use more spot freight usage, a little bit higher logistics costs and some limited volume throughput versus what we had planned. Again, looking ahead, as Kirk said, we expect to see some margin improvement in the second half as we move to capture that demand and also optimize the supply chain while still having a little bit of a tail of elevated freight and logistics costs. Robert Moskow: Okay. Can a follow-up. July 4 was like 1 of these tech events that you called out. How did that go? And did these issues on dots impacted at all? Or is it executed, okay? Kirk Tanner: No, not really. I think that dots still has got tremendous opportunities around these, especially the salty temple moments. So you'll see that come to life later this fall with fall football. It was not a massive part of our fourth of July execution in the first place. And now that's an opportunity for our future. But when you see the balance of the year, you're going to start seeing dots in a lot of these salty moments where consumers are looking for brands like this. So you'll see some more breakthrough through that. So I feel good about where we're going. It didn't impact us that much for fourth of July. . Operator: Our next question is from Leah Jordan with Goldman Sachs. Leah Jordan: I want to follow up on the CoCo comments. You noted that you could see cost deflation into next year, even if they stay at current levels, and we've seen it creep up again here recently. Just curious if you could provide more color on your coverage or visibility on your cost into next year at this point. how we should think about the potential magnitude of deflation we could see? And any views on how you're thinking about cocoa supply? And are you planning any differently as you think about this potential omninew environment this year? Kirk Tanner: Sure. Well, let me take the first part and Kirk and I can tag team on the Cocoa supply chain question. So we've got good visibility into cocoa deflation next year. I don't think we're at this point in the year, we're going to get real specific on as we will as we get closer to year-end. But right now, we feel good about the deflation we're seeing. We've got a good track record of managing through commodity volatility. Again, with our hedging, pricing strategies, resilient categories, the productivity and every all the other levers that we routinely use to manage that. So we'll share a lot more detail. I would just say we're in a spot where we didn't typically be at this time of the year and with all those levers available to us as we look to '27. Steven Voskuil: Yes. Let me talk a little bit about what we're seeing in the cocoa supply. So El Nino, you brought that up. El Nino speculation is certainly impacting pricing today and lately but we do not expect Cocoa to remain at current levels long term for a few reasons. If you remember the '23, '24 cycle, this is very different from that. And a couple of factors that we're seeing. One, we're coming off of historic surpluses. Inventories are healthier supply is more diversified, and the industry is much more agile. The recent '26 and '27 West African crop data is, I'd say, encouraging after a slow start. So even if some of the origins are impacted by El Nino, we believe the market is already pricing it in. There is plenty of cocoa supply globally. And given that view that there's room for prices to come down, as you can imagine, the hedging strategies we use will allow flexibility to participate in further deflation as the markets normalize. Leah Jordan: That was great color. And then I just wanted to ask about gross margin for this year. You slightly lowered the guide, I think, now slightly below 400 basis points versus just 400 basis points before. Maybe you could help us think about the magnitude we should think about there? Or how do you characterize the word slightly. And I guess what are you embedding in the guide for higher logistics cost in the back half? And any phasing we should keep in mind for 3Q versus 4Q on gross margin? Kirk Tanner: Yes. So we still have as you have pointed out, a significant lift in gross margins in the back half. We continue to see the commodity benefit coming through much more significantly than we did in the first half. And so that remains unchanged. And we're just below 400. We're not materially shy of the 400 kind of use that as the reference point, we used previously a little above, I would say now just a little bit below. And some of that is just some of the salty components coming through as we work through those challenges. On the other side, productivity is doing really well. And so we're encouraged by what we see. I think we'll have a strong finish on productivity. We just have to work through those optimization components on salty here over the last quarter. Operator: Our next question is from Peter Galbo with Bank of America. Peter Galbo: Steve Kirk. I wanted to circle back on the confection piece of it and maybe drilling a bit more on the untracked piece. It's not something we often hear a lot about. And again, if the math is correct, it suggests it was like 200 basis points of growth for the first half. So maybe you can just, again, unpack that untracked piece a bit more. I don't know if it was World Cup-driven, people descended on the Times Square Hershey store? Like what exactly is going on in that piece that we all can see to kind of drive the outperformance? Kirk Tanner: Yes, happy to take that one. Really, it's not quite that much. The biggest component inside there is food service, and we did see a pretty big pickup on the foodservice side. We also have some specialty retail and some other things that fold into that nonmeasured channel, but probably foodservice was the biggest piece. It also includes some compression of Easter shipments inside that number as well. So those are the factors. I think those are the biggest ones probably to call out. . Peter Galbo: Okay. And maybe just, Steve, to your commentary in the prepared remarks, you mentioned that 3Q is still expected to kind of be strongest year-over-year earnings growth period. I think that was always the case, just given some of the comps, but maybe you can just remind us like what's embedded in the base period of 3Q of last year that still drives that pretty material earnings growth for 3Q specifically. Steven Voskuil: Sure. Yes, the biggest factor is you had the highest cocoa cost last year. And I would say the full brunt of tariffs. And so those are the 2 biggest things we'll be lapping in the third quarter this year. So bigger tailwind in the third quarter than we'll see in the fourth. . Operator: Our next question is from Michael Lavery with Piper Sandler. Michael Lavery: I just wanted to touch on international. You called out in the prepared remarks, good momentum there, but there's also some margin pressure and we look back at like 22, 3 and 4, full year margins were above double digits. But last 6 or so quarters, it's running close to flat. Is there a structural change? Is that just some investments? And I guess also, can you just elaborate some on what is working with the top line? And just to give an update on all that. Kirk Tanner: Sure. I'm happy to take kind of a start through that. Some real pockets that we're excited about, Brazil, the U.K., India, in particular, has were probably some of our strongest performing markets through the first part of the year, demand is running ahead of plan. So I feel good about that. Mexico, macro conditions continue to be challenging. But as we look across international in total, there's probably nothing from a competitive standpoint that were that kind of changes our long-term view that this is a positive opportunity for continued growth. On the margin side, in particular, you're seeing the higher cocoa costs flow through with a little bit of a delay in international as well as some higher logistics and freight impacting that segment as well. And then as we turn the year, so the first half is very strong as we kind of move to the second half, we are going to continue to do some optimization work to help long-term profitability in the international business. We'll probably share more about that as we get further in towards the end of the year. But that will be that's expected to be a little bit of a drag on margins in the back half relative to the front half will ultimately unlock further margin improvement as we look forward. So in total, very excited about that business, strong first half, some real pockets of strength, but also we're making choices to set it up for long-term success. Steven Voskuil: Yes. I'll just add a few things. When we look at the portfolio in these anchor markets. We like what we're seeing. We like the competitiveness, how we're performing in markets like Mexico, Brazil, Canada, the U.K. So we like the performance. We're building momentum. There's certainly some opportunities, and we've seen real progress inside the business. Michael Lavery: Okay. Great. That's helpful. Just coming back to buybacks. You seem to have indicated typically, it's 1 of the lower priorities in capital allocation you've obviously been investing in the business. It doesn't look like you've got M&A as that we're aware of kind of ready to get announced. But is there room for more deployment to buybacks for the second half? How should we think about that? Kirk Tanner: So we always want to be good stewards of the shareholders' capital. And so as he said, I would never call it a low priority. It's probably down the pecking order behind the organic investment and smart M&A choices and so forth. And as you've heard, we've got some great organic investments for waking behind the pack innovation calendar, et cetera. The M&A pipe, we continue to work in that space and want to make sure that we always have capacity but share buybacks puts good tension into the process. And so as we sit here today, I would say we don't have anything in the back half plan for additional share buybacks, but we're going to remain optimistic and you saw we've got some additional authorization and that just reflects, again, the ability to make sure we're being good stewards of cash, not sitting on it, making sure we're deploying it wisely. So nothing more planned, but we're going to remain optimistic or opportunistic, I should say. Operator: Our next question is from Chris Carey Wells Fargo. Christopher Carey: Hi. Good morning, everybody. Good morning. Steve, I wanted to just ask a question about the medium-term targets that you've laid out at the recent Investor Day and in light of the recent rise in cocoa prices. I think there's a dynamic where the year-to-date cocoa prices will have allowed you to be quite well hedged for 2027. That in mind, 2028 prices are tracking around over 2027. And certainly, your medium-term outlook implies maybe like a low double-digit growth rate from where guidance is today? I realize that can move around based on where 2027 and 2028 land, but certainly strong earnings growth over the next several years into 2028. And I guess my question is, how much of that path into your 2028 aspirations will be dependent on you needing to see cocoa deflation maybe material relative to where your 2026 cocoa coverage is, rather than things that you can control yourselves or potential longer-dated hedging that you could do earlier than normal to give you the sort of visibility to achieve those targets? Kirk Tanner: Sure. 2028 is a long time away. So we'll have some work to do to fine-tune the outlook there. But philosophically, we have good visibility into deflation for cocoa for 2027. Certainly, we'd love to see it have a multiyear run where we could capture that. At the same time, we're not sitting still basing the whole business around cocoa, right? We want to continue to drive meaningful top line growth. We want to restore volume over time. We want to bring the best innovation to the category, be the best partner for retailers, and we want to be smart between the lines driving ongoing productivity savings, particularly off the back of our technology and capacity investments. So I would say, as I look to the future, continuing to grow the business and have margin improvement is not solely resting on cocoa deflation by itself. Certainly, that's going to be help for 2027. It's in the plan. Christopher Carey: Okay. The second is around margins in the second but you've seen an increase in freight and logistics costs that's part of the slightly lower gross margin outlook for the year. Can you give us a sense of how you're viewing margins in your snacking business in the back half of this year and perhaps more term given some of the dynamics you're dealing with right now? Kirk Tanner: Yes. We've got some margin pressure in the snacking business in the back half, really principally around those factors as we get further into fully optimizing the supply chain off the back of the investments that Kirk mentioned earlier, we do expect modest margin improvement as we go through the second half. So we're expecting improvement but we'll be in better shape as we get to 2027, and I'd say we've got the supply chain more fully optimized. Until then, we're going to still have, like I said, at least a tail of elevated freight and logistics, mostly because we're going to spot market to maintain service while we optimize internally. Operator: Our next question is from David Palmer with Evercore ISI. David Palmer: Just first of all, thanks for the comments on 2027 and including that 2% confection sales growth target. I would imagine that will be a focus area for people at the as confidence grows that you could do that, then that would be reflected in the stock. So maybe that's worth double-clicking about what you think will be needed to achieve that in terms of market share, how much is market share stabilization, a priority and a necessity to do that type of growth? Just how are you thinking about that? And then how if any way are you adjusting to what you've been seeing so far this year? Kirk Tanner: David, I'll take that one. Yes, I think that's a really important question because I think it drives this disciplined approach to the balance that we're driving in the business. And we remain confident we can make progress on both margin and share over time. So this year, I would just say we are on track to deliver our top line, our margin and our EPS expectations. Now the market is hypercompetitive. And that the competition in this category really drives the resiliency and the durability of growth. And we're seeing a lot of innovation growth this year. And we're building an innovation pipeline. We have a big innovation plan for the second half. We talked a little bit about it in our comments. And we have a pipeline in '27 and '28 that we have reviewed already that gives us confidence that we're going to build that share momentum. What I like about margin recovery and share performance, is it's in the right place is innovation that drives growth and profitability is a great way to grow the category and grow the business. That's why we have confidence that we can make meaningful progress on both margin and share performance. David Palmer: I wonder on the topic of innovation versus perhaps these activations or tentpoles that you've been doing this year. has anything surprised you or in terms of the response on the tentpole stuff? And then how would you characterize sort of the give and takes the year-over-year comparables of your intensity of tentpoles and innovation in '27 versus what we're seeing in '26, and I'll pass it on. Kirk Tanner: Yes. No, that's a really good question. If you think about how we look at the business, we look at our core everyday business, our performance around seasons. We've added this dynamic with tentpoles. And it's really raised our execution on some key things. I would tell you, I would look to the summer execution with the celebration of 250 and our smores performance. It was exceptional. It gets better every year and the bar gets higher and it's something that we're famous for, but we could take it even further. We added innovation in the space with I don't know if you guys are making mores, but she got to get on board, especially with the Carmel, that is growing our business, plus the execution around the temp pole is good. I expect us to get even better at these tent-pole moments, I think, about fall football. We like them because they fit nicely in between the seasons. But we look at the business just like that. We look at how we're performing on our everyday business, our immediate consumption business. Our seasons were incredibly disciplined around seasons, and that's why if you think about the first half, we gained share across seasons. We like what we see in the second half with the holiday season in Halloween. So we'll still stay focused on that because that's a huge part of the business. And then supplement the growth with the tent poles. And I can tell you we're getting better at those as time goes on. Operator: Our next question is from Alexia Howard with Bernstein. Alexia Howard: Need you for the question. Can we ask about the outlook for volume recovery in the North American confectionery segment? Obviously, price growth is going to slow. Would you expect a fairly rapid improvement in the volume trends as we move into the back half announcing to 2027? Kirk Tanner: Yes. Let me take that one. Look, as commodity inflation eases and pricing elasticities normalize, we expect volume trends to improve over time. I'd tell you, in Q4, we still have some high single-digit pricing that's tied into the seasonal actions that we've taken. But we look at the coming year, and we expect early signs of improvement coming across especially our Hershey brand portfolio, we have a lot of activity in Q4 with the Hershey movie. So we see that recovering early, Jolly Rancher, our premium bands, including Cadbury, we see some momentum. That momentum will continue through 2027. Alexia Howard: Great. And then as a follow-up on continuing with pricing, Salty snacks, you had pricing slightly down this down this quarter. because of the investment in trade promotion, I believe. Is that expected to continue into the back half of the year? Kirk Tanner: I think from a Cell team perspective, we're going to see balance. Of course, we constantly look at pricing as an equation or certainly strategic pricing understanding inflationary pressures on the business and being competitive and being right with consumers. So it's a balanced approach with that, that's how we take a disciplined approach across all of our businesses. But I think there's not going to be any big surprises from a salt pricing standpoint in the second half of this year. Operator: Our next question is from Peter Grom with UBS. . Peter Grom: Great. Thank you. Good morning, everyone. So I wanted to follow up on an earlier question around '27. And I think you noted the framework still holds based on where things stand today. You have good visibility on cocoa depletion but you also touched on kind of the external volatility that has picked up this year. And I guess I would imagine that when you provided annual guidance 2 years out back in March that you probably embedded more flexibility than usual. So just Serus, given how the environment has evolved, has that level of cushion shifted at all? Or is it really unchanged? Kirk Tanner: It's definitely been volatile. But I would say is next year more volatile than this year or last year, it's hard to say. But to your point, when we built that outlook, we take account of all the levers that we have inside the P&L to manage across. So that's levers on sales, pricing and volume, but also levers in the rest of the P&L as well as how we think about investments, reinvestment, productivity and so forth. And again, picking on productivity a little bit, it's a place where we've been able to overdeliver for a number of years. And that make some smart investments in technology and capabilities that will bear increasing impacts as we go forward. So notwithstanding what will no doubt be a very volatile 2027. We still feel that the framework that we articulated earlier this year is still the right starting point for the year. Peter Grom: And then you noted that Snap impacts have been pretty modest, and I think reductions have been better recently they were earlier in the year. So can you maybe just speak to that specifically? And maybe what's embedded in the outlook for the year. Kirk Tanner: Yes. Let me take that one. We've been staying very close, obviously, to this one. The Snap waivers versus the outlook. I would say it is really it's slightly better. And so it's what we plan. I thought we did a really good job planning for the impact of Snap, and we've been very close to it. Where the difference comes in is the early adopting states had a little bit higher of an impact than the recent states, notably, Texas and Florida. So they've been on the lower end. So the balance of that has been where we've seen a little bit of upside. But overall, I would say it's in line with what we planned. And that for me running this business, it feels like that's the right approach, being able to understand the macro and plan for it accordingly. And so that gives us the confidence moving forward that we can have a good eye on these macro impacts. Operator: Our next question is from Scott Marks with Jefferies. Scott Marks: I wanted to ask about the cadence or phasing of the top line in the back half it sounds like there's a lot of moving pieces between lapping tensor innovation, some of the new innovations coming out like cream bars as well as the pieces with cookie, Hershey movie, recovery from some of these salty supply challenges. So just wondering if you can give us an idea of the shape of Q3, Q4 across the different segments. Steven Voskuil: Yes. I'll just say on the North America confection business, it's possible we'll see some periods of negative everyday confection retail sales growth, but we anticipate strong seasonal performance -- and for organic net sales, we expect growth in both Q3 and Q4 for the segment. So we've got some tough laps, but for the quarters overall for the segment, we expect to see some growth. And as we talked about earlier, the second half shipment gap is expected to be less material in Q3 program shipments and the impact of that extra shipping day will help to neutralize that. So that's about as much color as we're probably going to give on the profile. It's like Kirk said at the beginning, it's pretty action-packed back half given the innovation launches. Scott Marks: Understood. Appreciate the color there. And then second question for me. In the prepared remarks, I think you called out ANC expense down about 3% in the quarter. Wondering if you can unpack that a bit for us? Why was it down? And how should we be thinking about the cadence of the ramp into H2 and as we get into next year? Kirk Tanner: Yes. Let me take that one. It really is tied to the programming that we have. And the balance of the year, we have quite a bit of programming that supports the innovation launch that supports the Hershey movie and then supports movement into 2027, meaning we're investing in things in the fourth quarter that should give us momentum and get off to a good start in 2027. So it comes down to the timing of programming and investments against the big initiatives that we have to create demand and to execute against the demand. It's mostly timing. And then the second half, we have good investment against delivering on our core brands, Reses and Hershey. But you'll also see programming around Cadbury, PayDay and fulfill. So we like the investments we're making, and they're tied to driving the growth and keeping the momentum going. Operator: Our next question is from Jim Salera with Stephens Inc. James Salera: Maybe to circle back to the conversation around pricing on Salt. I know there's been a lot of table discussions about pricing coming down across the categories, some other high-level large brands talking about taking some net price declines. Can you just give us some color on where your brands sit on the price ladder relative to peers in that category? Kirk Tanner: Yes. What I would tell you is we've been very prudent and patient with pricing on the Salt business. The pricing gaps have narrowed, but we -- if you look at a piece of history, we've been very balanced in our pricing on our selfie business. and very competitive. And I would say that is our focus. We will be competitive with price points in the categories that we participate in. Now we participate in a premium position with our core I mean, our core brands, especially Skinny Pop and three, they are premium and permissible. And of course, now with less Revo performing very well. I'd say overall, our pricing structure has been very disciplined very competitive position right where consumers expect it. So I think it's a bit different than the rest of the category. I think we're in a really good place. James Salera: And if I could shift gears and ask, we talked a lot about the tent poles and the contribution this year and in the back half of the year, but give us some thoughts on media consumption occasions and everyday consumption on confectionery particularly in the prepared remarks, you highlighted consumer softness persists, but elasticities are still a little bit better. And so you're trying to square is there something we should be on the lookout for given the macro uncertainty that might swing those elasticities either more to negative or anything that keeps you confident that we'll continue to move forward at a better pace. Kirk Tanner: Yes. The elasticities have been, like we said, they're on track or slightly better. And that's exactly how we look at the business. We look at our immediate consumption business and our execution across convenience and our take-home business. And those are really important core business that we look at. And that's where we've seen stable elasticities or at least against what we've planned. So that gives us the confidence. So that's exactly how we look at it. And then we fold in seasonal performance and then tent poles. But our starting point is always our core business, and that's our take-home business and our immediate consumption business. And when we talk about those elasticities, those are what we're talking about being on track. Operator: Our next question is from Tom Palmer with JPMorgan. . Thomas Palmer: Thanks for the question. Maybe I could just start out on just the topic of price gaps in chocolate. They have widened, especially versus a key competitor. In the release, I think some of the volume share changes we've seen were discussed as more being related to innovation could we maybe just unpack what you're seeing in terms of price gap versus innovation as drivers of that share? And then based on your innovation timing, when do you think we're going to start to see a real shift in kind of unit share on your end? Kirk Tanner: Yes. Let me take that 1 as well. look, first, the year-to-date share dynamics losing my voice this morning. I apologize to everyone. Look, year-to-date share dynamics is largely driven by innovation. Our pricing and our price gaps are largely as expected and our elasticities, as we just talked about, are tracking slightly ahead of our expectations year-to-date. So we watch these price gaps all the time, and we want to be competitive in the market. We will be competitive in the market. We regularly also make small adjustments where we see opportunities. . And moreover, we'll invest in trade in the second half to support the big innovation and merchandising programs, just like we talked a little bit about so when we go to market with our customers, we support the things that we're putting out on the perimeter that we're selling that we're driving that growth. But a couple of big drivers that I talked a little bit about earlier that are happening in the category, which I really love about this category and the resilience of it is innovation plays a big role. Innovation has played a big role this year. innovation will play a big role in '27 and '28. And I love our pipeline that we have on innovation starting in the second half, going into '27 and '28. So that gives you confidence that we're going to be very competitive and grow the category or ahead of the category. Thomas Palmer: Got it. And then, Steve, maybe could we put a fine. Could we put a finer point on how we think about third quarter in the context of having the highest earnings growth for the year I mean any sort of range maybe would be ideal. But as a starting point, the absolute level of earnings, should we think about 3Q or 4Q being higher? Kirk Tanner: Yes, I don't want to get as specific as starting to give more quarterly guidance. But I would say, from an EPS, which quarter, they're probably pretty close across the 2 between in absolute dollar EPS and I'm looking across at a Nuro say did I get that right? Yes. So but that's probably as much color as I think it's reasonable give. . Operator: Our next question is from Steve Powers with Deutsche Bank. Stephen Robert Powers: Great. Just 2 quick. Follow-ups, I guess. The first one, Kirk, elasticities, as described, tracking in line or slightly better. I guess does that hold true as you look across performance maybe by income cohort. Just curious if there's any subtleties there? And if so, in terms of the broader revenue growth management strategy. Anything that you might tweak in the program looking forward versus what you've been doing so far? Kirk Tanner: Yes. I mean I think this is always a dynamic place to look. I look at the channels in which we are participating, and we've got really good balanced growth across channels, across the dollar convenience channels. I would tell you, just the consumer studies that we do, low-income households certainly are feeling more pressure, but we're still seeing a balance across those channels right now. I would tell you, so the elasticities that we're seeing are very consistent with what we would expect. But we're always paying attention to the consumer and what their needs are, and we're looking at solutions through packaging and other offerings for consumers by channel so that we do stay hyper-focused on delivering what they're looking for and driving affordability. And so that's really still important to us. and part of our ongoing strategy. Stephen Robert Powers: Okay. Great. Great. And then just on the upcoming Halloween season, maybe just a bit of a further preview on programming, just kind of what you're planning, engagement with retailers, et cetera? And maybe if there's anything different than what we've seen in the past? Steven Voskuil: Yes. Look, we took a lot of learnings from Halloween. And we've already started shipping Halloween, so have good visibility to the orders -- and our activation plan with our frontline sales team is really dialed up this year. And I would say we've got great support with our customer partners on bringing this to life. So again, Helane starts fairly early. We even call it summer wind. It's off to a really good start. So it's coupled to, hey, look, what did you learn from last year how can we reach consumers better, how we can be better partners with our customers. We put those things into place for this year's Halloween and we feel good about where we're going to be. Operator: Thank you. We have reached the end of our question-and-answer session. This concludes today's conference. You may disconnect your lines. Thank you, again, for your participation. Before you buy stock in Hershey, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Hershey wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. 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Hershey (HSY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Hershey Company (The)? Here are five stocks we like better. Hershey expects growth in the second half of 2026, supported by product innovation, merchandising, seasonal demand and Halloween, despite tougher comparisons and continued consumer pressure. Management reaffirmed its long-term 2%–4% organic net sales growth framework and anticipates cocoa-cost deflation in 2027, while emphasizing that margin recovery will also depend on pricing, productivity, volume restoration and innovation. Strong Dot’s pretzel demand has strained salty-snack capacity and increased freight and logistics costs, prompting a slightly lower full-year gross-margin outlook; automation and new capacity are expected to support improvement over time. MarketBeat Week in Review – 06/29 - 07/03 Hershey (NYSE:HSY) executives said the company expects growth in the second half of 2026 despite tougher comparisons, continued consumer pressure and supply-chain costs in its salty-snacks business. During the company’s second-quarter earnings Q&A session, President and CEO Kirk Tanner said Hershey is positioned to deliver growth in the back half through innovation, merchandising programs and seasonal demand, including Halloween. However, he noted that the company will be lapping the prior-year success of its Oreo Reese’s innovation, which remains a strong performer but creates a difficult comparison. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Hershey Stock May Be Near a Sweet Spot as Cocoa Pressure Eases “We really like our position in the second half to deliver growth,” Tanner said, adding that the company expects growth on both a one-year and two-year basis. He cited planned launches including Hershey’s n’ Creme products, programs tied to an upcoming Hershey movie and a “robust Halloween” plan supported by customer orders. Chief Financial Officer Steve Voskuil said reported U.S. confection retail consumption growth of about 3% in the first half understated underlying demand by roughly two percentage points. The difference reflected growth in non-measured channels, particularly food service, as well as the timing of Easter shipments. → Microsoft Just Flipped the AI Spending Narrative Overnight Campbell's Soup Stock: Deep Value and a 7% Dividend Yield Voskuil said retail inventory replenishment after the April transition to new pack prices added another percentage point of growth. He expects the gap between consumption and shipments to narrow in the second half. Hershey also shipped a little more than one percentage point of third-quarter merchandising programs during the second quarter, Tanner said. That timing was somewhat ahead of expectations, but the effect is expected to be largely offset by an additional shipping day in the fourth quarter. → Carrier Earnings Could Send the Stock to a New All-Time High For North America Confectionery, Voskuil said the company expects organic net sales growth in both the third and fourth quarters, although everyday confection retail sales could be negative in some periods. Seasonal performance is expected to be strong, he said. The third quarter is expected to produce the strongest year-over-year earnings growth of the year because Hershey will lap its highest cocoa costs and the full impact of tariffs from the prior-year period, according to Voskuil. He said third- and fourth-quarter absolute EPS are expected to be relatively close. Management reaffirmed that its longer-term framework remains achievable based on current conditions. Tanner clarified that the company’s 2% to 4% organic net sales growth range applies to North America Confectionery as a long-term algorithm. For 2027, a shorter Easter season would make 2% the starting point for that segment, with salty snacks and international operations expected to add to enterprise growth. “Nothing we see today, commodities or otherwise, would cause us to move away from that framework,” Tanner said. Voskuil said Hershey has good visibility into cocoa cost deflation in 2027, though he did not quantify the expected magnitude. He said the company has multiple tools to navigate commodity volatility, including hedging, pricing, productivity initiatives and investments. Tanner said recent concern about potential El Niño effects has influenced cocoa prices, but management does not expect prices to remain at current levels over the long term. He pointed to healthier inventories, diversified supply, greater industry agility and encouraging 2026 and 2027 West African crop data after a slow start. “There is plenty of cocoa supply globally,” he said. Management also said it does not view cocoa deflation as the sole driver of future margin recovery. Voskuil cited top-line growth, innovation, volume restoration, retailer partnerships, technology investments and productivity savings as additional levers. Hershey said demand for Dot’s pretzels has been strong, though the business experienced supply-chain challenges as it worked to keep up with demand. Tanner said the company had already increased spending on automation and capacity, with additional capacity scheduled to come online in 2027. Automation is expected to begin helping in the near term. Voskuil said the supply-chain issues pressured salty-snack margins during the quarter through higher spot freight use, logistics costs and limited volume throughput. Hershey expects modest margin improvement during the second half as it captures demand and further optimizes its supply chain, though elevated freight and logistics costs are expected to persist for some time. The company slightly reduced its full-year gross-margin outlook to just below a 400-basis-point improvement. Tanner said commodity benefits should be more meaningful in the second half, while strong productivity performance should partly offset the salty-snack challenges. Dot’s was not a major component of Hershey’s Fourth of July execution, Tanner said, and its supply constraints did not materially affect the event. He expects the brand to have greater visibility in future salty-snack occasions, including fall football programming. Tanner said innovation is the primary driver of year-to-date share dynamics in confectionery, while pricing gaps and elasticities have tracked largely as expected. Hershey plans to invest in trade during the second half to support innovation and merchandising programs. The company expects volume trends to improve over time as commodity inflation moderates and pricing elasticities normalize. Tanner said Hershey expects early signs of improvement in its core Hershey’s brand portfolio, as well as momentum for Jolly Rancher and premium brands such as Cadbury. In salty snacks, Tanner said Hershey has taken a disciplined approach to pricing and considers its brands, including SkinnyPop, Dot’s Pretzels and LesserEvil, to be positioned competitively despite their premium positioning. Internationally, Voskuil highlighted Brazil, the United Kingdom and India as particularly strong markets in the first half, while noting that macroeconomic conditions remain challenging in Mexico. Higher cocoa, logistics and freight costs have pressured international margins, he said. Hershey expects optimization work in the second half to weigh on margins temporarily but support longer-term profitability. On capital allocation, Voskuil said the company has no additional share repurchases planned for the second half at this time. He said Hershey continues to prioritize organic investments and potential acquisitions, while remaining opportunistic with its authorization to repurchase shares. The Hershey Company (NYSE: HSY) is a leading North American chocolatier and snack manufacturer headquartered in Hershey, Pennsylvania. The company develops, produces and markets a wide range of confectionery and snack products for retail, foodservice and international customers. Hershey's business spans manufacturing, branded product marketing, packaging and distribution across grocery, convenience, mass merchant and e-commerce channels. Hershey's product portfolio centers on chocolate and sugar confectionery, including core brands such as Hershey's, Reese's, Hershey's Kisses and Twizzlers, alongside non-chocolate snacks and confectionery brands. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Hershey Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Hershey (HSY) came out with quarterly earnings of $1.9 per share, beating the Zacks Consensus Estimate of $1.45 per share. This compares to earnings of $1.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +31.03%. A quarter ago, it was expected that this chocolate bar and candy maker would post earnings of $2.05 per share when it actually produced earnings of $2.35, delivering a surprise of +14.63%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Hershey, which belongs to the Zacks Food - Confectionery industry, posted revenues of $2.79 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.21%. This compares to year-ago revenues of $2.61 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Hershey shares have added about 1.1% since the beginning of the year versus the S&P 500's gain of 6.9%. While Hershey has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Hershey was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.29 on $3.32 billion in revenues for the coming quarter and $8.42 on $12.24 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food - Confectionery is currently in the bottom 4% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Boyd Group Services Inc. (BGSI), another stock in the broader Zacks Consumer Staples sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This company is expected to post quarterly earnings of $1.03 per share in its upcoming report, which represents a year-over-year change of +106%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Boyd Group Services Inc.'s revenues are expected to be $1.02 billion, up 30.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hershey Company (The) (HSY) : Free Stock Analysis Report Boyd Group Services Inc. (BGSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The Hershey Company HSY delivered a strong second-quarter performance, supported by pricing gains, improving profitability and contributions from the LesserEvil acquisition.The company posted adjusted earnings of $1.90 per share for the second quarter of 2026, up 57% year over year, supported by stronger sales, gross profit performance and the timing of media investments. The figure beat the Zacks Consensus Estimate of $1.45.Net sales increased 6.6% to $2,787.3 million and surpassed the consensus mark of $2,649 million. Organic, constant-currency sales rose 3.6%, as roughly 12 points of pricing more than offset an 8-point volume decline. Hershey Company (The) price-consensus-eps-surprise-chart | Hershey Company (The) Quote The LesserEvil acquisition added 2.7 percentage points to total company sales growth, while foreign currency contributed 0.3 points. Pricing remained the main organic sales driver, particularly in North America Confectionery and International.Volume pressure primarily reflected elasticity from pricing actions. Management noted that elasticity increased slightly in the quarter but remained somewhat better than its full-year expectations. Retailer inventory replenishment also supported confectionery shipments. Adjusted gross margin expanded 350 basis points to 41.6%. Net price realization, lower commodity costs and productivity savings more than offset higher logistics expenses and unfavorable mix.Adjusted operating profit advanced 37.3% to $563.5 million, while the adjusted operating margin increased 450 basis points to 20.2%. Selling, marketing and administrative expenses rose 2.9%. Advertising and related consumer marketing expenses declined 3.3% due to efficiencies and the timing of non-working media investment. North America Confectionery sales increased 4.2% to $2,173.6 million. Organic, constant-currency sales rose at the same rate, as approximately 14 points of net price realization were partly offset by a roughly 10-point volume decline tied to elasticity and shipment variability. Segment income rose 40.1% to $705.8 million, lifting the segment margin 830 basis points to 32.5%. North America Salty Snacks sales climbed 22.9% to $387.8 million, with the LesserEvil acquisition contributing about 22 percentage points. Organic, constant-currency sales increased 0.6%, as roughly 4 points of volume growth were partly offset by a 3-point pricing headwind from higher trade investment behind new products. Retail takeaway, excluding LesserEvil, increased 6.5%, led by Dot’s, Reese’s Filled Pretzels and variety multipacks. However, supply constraints affecting multipacks and Dot’s pretzels, along with reduced private-label production, limited shipment growth. Segment income fell 5.9% to $62.6 million, and the margin contracted 500 basis points to 16.1%. International sales increased 5.7% to $225.9 million. Organic, constant-currency sales rose 2.1%, as about 10 points of pricing offset an approximately 8% volume decline caused by elasticity and the depletion of inventory shipped in the first quarter to mitigate geopolitical risk. The segment recorded a loss of $5.1 million compared with income of $19.8 million a year earlier. Cash and cash equivalents totaled $791.2 million at the end of the quarter, while long-term debt stood at nearly $4,684 million. Capital additions, including software, were $90 million, and dividend payments totaled $286 million.Hershey repurchased $370 million of common shares during the quarter. The company had $270 million remaining under its December 2023 authorization, while the board approved an additional $500 million share repurchase authorization in June 2026. Management revised its 2026 net sales growth outlook to 4.5%-5% from 4%-5%. Organic sales growth is now projected at 3%-3.5% compared with the previous range of 2.5%-3.5%.Adjusted earnings growth is expected to be 32.5%-35% versus 30%-35% earlier. This translates to adjusted earnings of $8.36-$8.52 per share. Hershey continues to expect capital expenditures of $425-$475 million, interest expense of $200-$210 million and $100 million in Advancing Agility & Automation savings. This Zacks Rank #4 (Sell) stock has dropped 5.6% over the past six months, almost in line with the industry. United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks hereThe consensus estimate for United Natural’s current fiscal-year earnings per share (EPS) stands at $2.52, which implies substantial growth from the year-ago period earnings of 71 cents. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.The Vita Coco Company, Inc. COCO, a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings implies growth of 31.6% and 64.7%, respectively, from the year-ago figures. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hershey Company (The) (HSY) : Free Stock Analysis Report Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report US Foods Holding Corp. (USFD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research