Hershey (HSY) Financials

Hershey’s recent financial performance shows a sharp rebound in 2026 after a weaker 2025. In the second quarter of 2026, revenue increased 6.6% year over year to $2.79 billion. Net income surged to $457.7 million from $62.7 million in the restated second quarter of 2025, while diluted earnings per share rose to $4.37 from $0.60. The comparison is unusually strong, so investors should consider the impact of prior-year restatements and difficult year-over-year profitability comparisons.

Profitability also improved substantially. Hershey’s Q2 2026 gross margin was approximately 45.3%, compared with 30.4% in Q2 2025. Operating margin improved to about 23.1% from 7.4%, and net margin increased to roughly 16.4% from 2.4%. The company also reported stronger results in Q1 2026, with revenue up approximately 10.7% and net income up 94% from the restated prior-year quarter.

Cash generation remains a key strength, although quarterly results fluctuate with working capital and seasonality. Operating cash flow was $419.3 million in Q2 2026, compared with $112.2 million in Q2 2025, and reached $468.8 million in Q1 2026. Hershey continued to generate enough cash to fund capital expenditures, dividends and share repurchases, although financing outflows exceeded $425 million in Q2 due largely to shareholder returns and debt repayment.

The balance sheet is more leveraged than it was several years ago. Total debt was approximately $5.61 billion at the end of Q2 2026, versus about $4.30 billion at the end of Q3 2023. Cash declined to $791.2 million from $912.3 million a year earlier and $1.16 billion at the end of Q3 2025. The current ratio was approximately 1.18 in Q2 2026, below the roughly 1.53 level recorded in Q2 2025, indicating less short-term liquidity cushion.

• 2026 earnings recovery: Q2 2026 net income increased more than sixfold year over year to $457.7 million, following a 94% increase in Q1 2026.
• Improved margins: Q2 2026 gross, operating and net margins all expanded materially from the restated Q2 2025 levels, suggesting improved pricing, product mix or cost management.
• Strong operating cash flow: Hershey generated $419.3 million of operating cash flow in Q2 2026 and $468.8 million in Q1, providing support for capital spending, dividends and buybacks.
• Shareholder returns remain a priority: The company repurchased $370.1 million of stock and paid $286.4 million in dividends during Q2 2026. Weighted-average shares declined to about 200.9 million from 202.8 million in Q1 2026.
• Dividend growth: Cash dividends per share rose to $2.772 in 2026 from $2.615 in 2025 and $2.28 in 2023, supporting Hershey’s appeal to income-oriented investors.
• Working capital is volatile: Operating cash flow has ranged from $419 million to $927 million across the latest reported quarters, reflecting seasonal changes in inventories, receivables and payables.
• Recent revenue growth is steady but not exceptional: Revenue has generally increased from 2023 levels, but the latest growth rates have been in the mid-single to low-double digits and should be evaluated alongside margin sustainability.
• Higher leverage: Total debt remains roughly $1.3 billion above the Q3 2023 level, which increases interest-rate and refinancing risk.
• Reduced liquidity: Q2 2026 cash fell to $791.2 million, while current liabilities rose to $3.35 billion. The resulting decline in the current ratio leaves less flexibility if operating conditions weaken.
• Profitability remains uneven: Net income fell 38% in Q3 2025 and 60% in Q4 2025 on a year-over-year basis before rebounding in 2026. Investors should determine whether the latest improvement is durable rather than solely a recovery from depressed comparisons.