HERSHEY CO earnings calls

2027 sales outlook and market share

Q (Andrew Lazar · Barclays): What gives you visibility to 2027 sales growth and will that come from carryover price or volume? Also, why is Hershey still losing market share and how should share progress into 2027?

A: Management said they are confident in actions they can control: effective media, stronger innovation pipeline (50% increase), programming, and RGM with low single-digit carryover pricing. They noted consumer spending and macro factors could push results to the lower part of the 2%-4% range. Dave added share accelerated in July/August but tough comparisons hurt in September.

"Our media that we've seen in the first half of the year is working, we've got a good return on investment." — Kirk Tanner (CEO)

pricing stance and 2027 innovation

Q (David Palmer · Evercore): Is there a price-value issue versus competitors and what do consumer and retailer insights show about pricing strategy? Also, how does the 2027 innovation pipeline look and will pace/effectiveness change next year?

A: Kirk said pricing remains rational and they prefer targeted value through pack-and-price and promotions rather than rolling back prices. On innovation he said the pipeline is up 50% for 2027, focused on sweets, premium, permissible salty and some functional innovation, and it will contribute more to growth next year.

"So overall, it is up 50%, and I think that is important." — Kirk Tanner (CEO)

shape of 2027 sales and EPS risks

Q (Peter Galbo · BofA): Is 2027 organic sales more back-half weighted given seasonal timing headwinds, and what are the puts and takes that could push downside risk for 2027 EPS?

A: Dave said Q4 is impacted by tough lapping and C-store softness but some big ideas come early in the calendar and they have a value playbook for C-store and consumer value. On EPS he said the original EPS framework is not completely off the table but would need an improved environment; risks include worse consumer demand or cost deterioration.

"We don't see the initial EPS framework as completely off the table." — Dave Hulays (CFO)

marketing/pricing changes and Halloween

Q (Thomas Palmer · JP Morgan): Does the outlook incorporate changes to marketing or pricing versus prior outlook? And for Halloween, is flat performance due to macro or execution items?

A: Dave said there is no change to the 2027 EPS framework other than reflecting higher freight, logistics and non-cocoa input costs, and they will continue to invest in marketing, innovation and productivity tech. Kirk said about 35% of seasonal sales happened this week given the Saturday Halloween and the season is compressed; Hershey's share is up in most channels and final days are critical.

"There is no change to the 2027 EPS framework other than reflecting the higher freight, logistics, and non-cocoa input costs." — Dave Hulays (CFO)

gross margin, hedges, volume impact

Q (Robert Moskow · TD Cowen): Is the Q4 gross margin exit rate informative for 2027 and how does volume de-leverage affect the business? Is capacity flexible enough to manage lower volumes?

A: Dave said the main difference between Q4 and next year is timing of cocoa hedges and that will change next year. They acknowledge some volume de-leverage impact but see volume trends improving and expect productivity initiatives and capacity flexibility to help; Kirk noted meaningful unit trend improvement on core brands and that improvement should continue into next year.

"The big difference between the fourth quarter and what we are going to see next year is the timing of cocoa hedges." — Dave Hulays (CFO)

cocoa outlook and salty supply recovery

Q (Chris Carey · Wells Fargo): What are you seeing in global cocoa supply and how will you approach hedging? And why is snack (salty) supply recovery taking longer and is it starting to impact consumption or out-of-stocks?

A: Dave said the market is coming off a historical surplus of 500,000 to 600,000 metric tons, inventories are healthier and production is increasing in new origins, and they remain disciplined using flexible hedging instruments. Kirk said salty service levels are improving, they've invested in automation and have manufacturing lines coming online in the first half of next year to meet demand and return to growth in 2027.

"We're coming off of a historical surplus of 500,000 to 600,000 metric tons." — Dave Hulays (CFO)

productivity levers and Q4 brand spend

Q (Leah Jordan · Goldman Sachs): What productivity opportunities remain and what cocoa mitigation tools beyond hedging do you have? Also, will Q4 brand investments target the same brands/channels or change given consumer softness?

A: Dave said they have a strong productivity pipeline with technology initiatives like factory digitization, decision intelligence and logistics optimization as part of a multifaceted roadmap toward mid-40% margin recovery long term; for cocoa they use flexible hedging, sourcing flexibility and a new chocolate paste facility. On brand spend, he said full-year brand investment is around 10%, they will carry Q3 investments forward and new campaigns for Cadbury, Fulfil and Payday are ramping.

"Our strategies remain the same, and we continue using flexible hedging structures to capture favorable market moves." — Dave Hulays (CFO)

unit trends and advertising spend

Q (Alexia Howard · Bernstein): Can you add color on unit volume improvement as pricing slows? And where is advertising as a percent of sales and will you invest more next year?

A: Kirk said unit trends are improving as pricing moderates, especially on big brands like Hershey's, KIT KAT, Cadbury and Kisses, and that improvement should continue through 2027. Dave said net price moderation began modestly late in the quarter and will continue; he also said they will continue to invest behind brands and innovation, with full-year brand investment around 10% and improving marketing ROI driving efficiency.

channel weakness and guidance assumptions

Q (Peter Grom · UBS): Has category weakness in September worsened in October and what channel details are you embedding in guidance? Also, should we remove the $0.25 tariff refund from the 2026 base when thinking about 2027 EPS growth?

A: They said C-stores are the biggest outlier with continued weakness (category down in C-stores) while the rest of the category was up about 3.7% in Q3; they view the issue as a channel and trip problem rather than a broad category problem and are focused on value levers and targeted promotions. Dave confirmed that taking the $0.25 tariff refund out of the 2026 base for 2027 growth is the right way to think about it.

"When we do step back, we see it as more of a channel and trip problem, not as much a category issue." — Dave Hulays (CFO)

risk to growth and margin timing

Q (Michael Lavery · Piper Sandler): Does the phrase about pressure restraining growth mean the low end of the original range or downside below it? And what is the timing to achieve mid-40% margin recovery?

A: Kirk said top-line guidance range remains, but if consumer pressure persists they'll land in the lower part of the range and could be shy of the original framework if today's conditions remain. Dave said they expect meaningful margin improvement starting in 2027 and that the long-term mid-40% margin ambition is targeted 2028 forward, with timing dependent on logistics, freight and input cost trends.

"Just starting 2027, we do expect meaningful margin improvement in 2027." — Dave Hulays (CFO)

away-from-home distribution and agentic commerce

Q (Nik Modi · RBC): Any update on distribution opportunities outside traditional channels and could that help through the downturn? Also, have you reviewed how your brands show up in agentic commerce platforms?

A: Kirk said away-from-home remains an opportunity, they are doubling down across salty and confection, creating new partnerships and expect it to be a tailwind into 2027. On agentic commerce he said they have spent a lot of time with partners (Target, Amazon, Walmart) to understand and leverage how their brands show up and that they are on the front foot in this space.

"This is an important space for us and something that I think we're on the front foot with." — Kirk Tanner (CEO)

movie merchandising and shipment timing

Q (Scott Marks · Jefferies): How much uplift should we expect from The Hershey movie merchandising and is that incremental? Also, remind us of shipment timing benefits/headwinds and any Q4 timing issues to keep in mind.

A: Kirk said retailers have backed the movie and that merchandising, displays and inventory tied to the movie will provide an uplift and a tailwind to the portfolio, especially Hershey's, going into 2027. Anoori said the earlier Q2 ship of summer programs was largely offset by strong seasonal sell-in in Q3 and that Q4 timing dynamics are largely a wash given the extra shipping day and lapping lower retailer inventories.

"For confectionery, that earlier ship of summer programs in Q2 was largely offset by that strong seasonal sell-in that we saw in Q3." — Anoori Naughton