HSY changes
Pick any two versions below to diff them.
- Price
- $168.40 → $176.43(+4.8%)
- Next earnings
- Oct 29, 2026 → Jan 29, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- Hershey's price reflects worry about shrinking candy volumes, not a temporary mood. Cocoa prices spiked in 2024, so Hershey raised prices about 12%. Shoppers responded by buying less candy. But profit is recovering. removed: Gross added: Adjusted gross margin rose removed: sharply added: to 42.7% in the removed: most recent quarter, added: third quarter of 2026, from 31.8% a year earlier, and management raised removed: the low end of its full-year earnings removed: outlook. added: outlook again in October 2026. Part of that raise came from refunds of tariffs that Hershey paid. Cocoa has fallen from its peak, and management expects further declines into 2027, though cocoa rose again in late August 2026 before it eased in September. For the gap to close, volume needs to stop falling while cocoa costs keep easing. That would let margins keep rising through 2027. Hershey's brands showed real pricing power, since the company raised prices sharply and kept most of its customers. The main risk to this case is that high prices, a weaker low-income shopper, and weight-loss drugs keep shrinking how much candy people buy. Management has described 2026 and 2027 as years of restoring profit. It expects a more balanced mix of sales and profit growth to return from 2028. added: Volume has not stopped falling yet: it fell about 10 points in the third quarter, more than the 8 points of the second quarter. The next tests are removed: Q3 2026 results on October 29, 2026, cocoa costs through the rest of 2026, removed: and full-year 2026 results added: and the 2027 outlook, due in early removed: 2027. added: 2027, and the first quarter of 2027, when lower hedged cocoa costs should show in margins. If volumes stabilize and cocoa keeps easing, the gap could close over the next several quarters. If cocoa spikes again or volumes keep falling, it could take until 2028.
- Risks
- Hershey is selling less candy. After raising prices by about 12%, volume fell about removed: 8% added: 8 points in Q2 added: 2026 and about 10 points in Q3 2026. In North America Confectionery, volume fell about removed: 10%. added: 11 points in Q3 2026, and Hershey lost US candy market share. Management said low-income households are under the most pressure. If volume keeps falling once the price increases stop adding growth, sales could shrink. Hershey's plan to recover its margins depends on cocoa costs falling in 2027. Cocoa futures in New York rose to about $6,800 per ton in late August 2026, because of weather risk and a smaller crop in Ghana. They fell to about $5,370 on September 30 and closed at $5,665 on October 9. Hershey hedges cocoa 3 to 24 months ahead, so a new price spike would hit its costs with a delay, not right away. GLP-1 weight-loss drugs, like Wegovy and Zepbound, reduce appetite. As more people use them, they may buy less candy and snacks, which would slowly shrink Hershey's main market. The salty snacks business is growing but earning less. In removed: Q2 added: Q3 2026, segment sales grew removed: 22.9%, added: 22.3%, mostly from LesserEvil, but segment profit fell removed: 5.9%. added: 17.9% because of higher freight, manufacturing and commodity costs. Management has pointed to supply problems at Dot's Pretzels that new automation is meant to fix in 2027. Hershey paid about $769 million for LesserEvil, so a weak return there would hurt. Hershey has changed several top leaders in a short time. CEO Kirk Tanner joined in August 2025, the President, US left in May 2026, a new Chief Supply Chain Officer started in June 2026, CFO Dave Hulays took over in September 2026, and a new President, International starts in October 2026. This much turnover at the top adds execution risk during the margin recovery. The Milton Hershey School Trust controls about 80% of the shareholder votes. It has blocked takeover bids before, so ordinary shareholders are unlikely to get a buyout premium, and they have little say over the board. The trust also sold about 1.48 million common shares from March to October 2026 under a trading plan. This did not change its Class B shares, which hold most of its votes. Hershey had about removed: $5.6 added: $5.1 billion of debt and removed: $0.8 added: $0.7 billion of cash at the end of removed: June added: September 2026. This is manageable for a company this profitable, but it leaves less room for another large acquisition or bigger buybacks while margins recover.
- Balance sheet
- Cash: removed: $791M added: $677M Debt: removed: $5.6B added: $5.1B Net debt: removed: $4.8B added: $4.4B EBITDA, last 12 months: removed: $2.7B added: $3.1B Net debt / EBITDA: removed: 1.8× added: 1.4× (low) Interest cover: removed: 9.0× added: 13× Undrawn credit line: $1.9B, to October 2030 Debt due within 12 months: removed: $500M added: $634M Last debt due: 2050 Ratings: Moody's A1 (stable outlook), S&P A (stable outlook) Hershey funds itself with cash from operations and with unsecured fixed-rate notes that the parent company issues. The debt does not limit Hershey, and Moody's expects leverage on its own measure to fall from the mid-2 times range to below 2 times over 12 to 18 months. Moody's expects this as cocoa costs ease and margins recover. Hershey uses commercial paper for the summer peak in working capital, and the added: $1.875 billion revolving credit facility backs it. At removed: June 28, added: September 27, 2026, debt was removed: mostly $5.1 added: $4.69 billion of removed: notes due from 2026 to 2050, added: long-term debt, including the current part, plus removed: $264 added: $436 million of removed: commercial paper. It also included $157 added: short-term debt. The short-term debt was mostly $269 million of added: commercial paper at an average rate of 4.0%, plus foreign bank removed: loans and $76 million of finance leases. Operating leases added about $313 million more. Most of added: loans. Hershey repaid the removed: cash was outside the United States. EBITDA and EBIT interest cover are trailing figures. The amount due within 12 months was $500 million of 2.300% removed: notes, which added: notes when they matured removed: on added: in August removed: 15, 2026. Hershey added: 2026, and it issued no new notes in removed: 2026, and the Q3 2026 report will show how it paid them. added: 2026. The next maturity is $194 million of 7.200% debentures in August 2027. added: EBITDA and interest cover are trailing 12-month GAAP figures to September 27, 2026, from the 10-Q and the 2025 10-K. GAAP operating profit in that period includes gains on commodity hedges and tariff refunds. In the first removed: half added: nine months of 2026, Hershey paid removed: $574 added: $859 million of dividends and bought back $439 million of its removed: shares. added: shares, all in the first half. A second large deal like LesserEvil would slow the fall in leverage. As of removed: Jun 28, added: Sep 27, 2026.
- Checkpoints
- Oct 29, 2026: Q3 2026 earnings: Halloween season volume and margin. removed: Pending. added: Failed. Watch: A smaller volume decline, higher adjusted gross margin and the $8.36 to $8.52 EPS outlook held or raised pass; a deeper volume drop or a lower outlook fails. removed: Feb added: Outcome: Adjusted gross margin rose to 42.7% and the EPS outlook rose to $8.58 to $8.74, but volume fell about 10 points, more than the 8 points of Q2. Jan 29, 2027 (estimate): Full-year 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with double-digit EPS growth and stable volume passes; an outlook cut because of new cocoa costs or weak demand fails. Apr 2027 (estimate): Q1 2027 earnings: cocoa cost relief shows in margins. Pending. Watch: Gross margin up again as lower hedged cocoa costs arrive and volume flat or up passes; margin pressure from the September 2026 cocoa jump fails.
- Recent events
- Oct added: 29, 2026: Hershey reported Q3 2026 results. Net sales grew 3.0% to $3.28 billion, and organic net sales grew 0.8%. Prices added about 11 points of growth, while volume fell about 10 points. Adjusted earnings per share grew 103% to $2.64, and adjusted gross margin rose 10.9 points to 42.7%. Hershey's US candy retail sales grew 0.8% in the 12 weeks to September 27, 2026, but its market share fell. Oct 29, 2026: Hershey raised its 2026 outlook. It now expects adjusted earnings per share of $8.58 to $8.74, growth of 36% to 38.5% (before: 32.5% to 35%), and net sales growth of about 5%. About $0.25 of that outlook comes from tariff refunds that Hershey received in Q2 and Q3 2026. It now expects organic net sales growth of about 3% (before: 3% to 3.5%). Oct 14, 2026: From October 12 to October 14, 2026, the Milton Hershey School Trust sold 30,000 more common shares for about $4.9 million under the same trading plan, per its Form 4 filing. Its Class B shares did not change. Oct 9, 2026: Hershey confirmed that it will report Q3 2026 results on October 29, 2026, with a conference call at 8:30 a.m. ET. Oct 9, 2026: From March 16 to October 9, 2026, the Milton Hershey School Trust sold about 1.45 million common shares for about $267 million, under a Rule 10b5-1 trading plan, per its Form 4 filings. Its Class B shares did not change, so its voting control stays at about 80%. Oct 1, 2026: Hershey named Amanda Almond President, International, effective October 12, 2026. She replaces Rohit Grover, who led the International segment for eight years. She was previously a regional managing director at the wine company Vinarchy, and she worked 12 years at Bacardi. Sep 9, 2026: At the Barclays Global Consumer Staples Conference, management described 2026 and 2027 as years of restoring profit after the cocoa spike, and said Hershey would return to a more balanced mix of sales and profit growth from 2028. Sep 2, 2026: Hershey named Dave Hulays Chief Financial Officer, succeeding Steve Voskuil, who stays on to help with the transition until he retires in Q1 2027. Hulays joined Hershey in 2012 and previously worked at Procter & Gamble. Jul 30, 2026: Hershey reported Q2 2026 results. Net sales grew 6.6% to $2.79 billion. Prices added about 12 points of growth, while volume fell about 8 points. Adjusted earnings per share grew 57% to $1.90, and adjusted gross margin rose to 41.6% from 38.1%. Jul 30, 2026: Management raised the low end of its 2026 outlook. It now expects net sales growth of 4.5%-5% (before: 4%-5%) and adjusted earnings per share growth of 32.5%-35%, or $8.36-$8.52 (before: $8.20-$8.52). The outlook does not include any refunds of tariffs Hershey paid. Refunds could come after the Supreme Court ruled on February 20, 2026, that the IEEPA law does not allow tariffs. Apr 30, 2026: Hershey reported Q1 2026 results. Net sales grew 10.6% to $3.10 billion, and organic net sales grew 7.9%. In North America Confectionery, prices added about 12 points, and volume fell about 4 points. Mar 31, 2026: At its Investor Day, Hershey laid out a plan for double-digit earnings per share growth in 2026 and 2027 as margins recover, then 6%-8% earnings per share growth and 2%-4% organic sales growth a year from 2028. It expects free cash flow above $1.8 billion by 2028. Feb 5, 2026: The board raised the quarterly dividend by 6%, to $1.452 per common share. Nov 18, 2025: Hershey completed its purchase of LesserEvil, an organic snack brand, for about $769 million in cash, plus up to $200 million more if the brand hits earnings targets.