Revenue Growth Acceleration
Net revenue increased 10.6% year-over-year to $3.10B in Q1 2026 from $2.81B in Q1 2025, reflecting strong top-line momentum across Hershey's portfolio.
Source: 10-Q Income Statement, Q1 2026
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Hershey delivered a strong Q1 2026 with revenue up 10.6% to $3.10B and net income nearly doubling (+94.1%) to $435.1M, driven by significant gross margin expansion of 5.7 percentage points to 39.4%.
Revenue
$3.1B
+10.65% YoY
Gross Margin
39.4%
+5.7 pts YoY
Operating Income
$640.69M
+73.53% YoY
Source: SEC XBRL
Hershey (HSY) reported Q1 FY2026 revenue of $3.1B, up 10.6% year over year. Operating margin was 20.6%, up 7.4 points from 13.2% a year earlier. Operating cash flow was $468.81M, up 18.2% year over year. HSY's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 1.90 | 1.44 | Beat +32.0% |
| Mar 2026This filing | 2.35 | 2.07 | Beat +13.8% |
| Dec 2025 | 1.71 | 1.42 | Beat +20.6% |
| Sep 2025 | 1.30 | 1.08 | Beat +20.4% |
Reported EPS of $2.35 versus the $2.07 analyst consensus — a +13.8% beat for Mar 2026.
Compiled by AI from this SEC filing
Net revenue increased 10.6% year-over-year to $3.10B in Q1 2026 from $2.81B in Q1 2025, reflecting strong top-line momentum across Hershey's portfolio.
Source: 10-Q Income Statement, Q1 2026
Gross margin expanded 570 basis points to 39.4% from 33.7% in the prior year period, as cost of revenue grew only 1.1% despite a 10.6% revenue increase, suggesting improved pricing power or easing input cost pressures.
Source: 10-Q Income Statement, Q1 2026
Operating income jumped 73.5% to $640.7M, with operating margin expanding 750 basis points to 20.6% from 13.2%, demonstrating significant operating leverage as SG&A grew only modestly at 3.1% to $576.0M.
Source: 10-Q Income Statement, Q1 2026
Net income rose 94.1% year-over-year to $435.1M, translating to a net margin of 14.0%, a substantial improvement reflecting the combined benefit of higher revenues and controlled cost growth.
Source: 10-Q Income Statement, Q1 2026
Operating cash flow grew 18.2% to $468.8M, while long-term debt declined 10.2% to $5.19B from $5.78B, indicating improved financial flexibility and balance sheet deleveraging.
Source: 10-Q Cash Flow Statement & Balance Sheet, Q1 2026
Compiled by AI from this SEC filing · 1 high, 3 medium, 1 low
Hershey carries $5.19B in long-term debt, which, while reduced 10.2% year-over-year, remains substantial relative to total assets of $13.84B. Sustained high interest rates could increase refinancing costs and pressure future earnings. Debt service obligations may limit strategic flexibility.
Source: 10-Q Balance Sheet, Q1 2026
Current assets fell 21.6% year-over-year to $3.77B, while current liabilities remained relatively flat at $3.04B, compressing the current ratio to 1.24x from a higher prior-year level. This tightening liquidity position warrants monitoring, particularly if operating conditions deteriorate.
Source: 10-Q Balance Sheet, Q1 2026
Hershey's core products rely heavily on cocoa, sugar, and dairy commodities, which are subject to significant price volatility. While cost of revenue grew only 1.1% this quarter, any reversal in commodity price trends could compress the recently expanded gross margins. The company's ability to pass through cost increases via pricing is not guaranteed.
Source: 10-Q Income Statement, Q1 2026
Financing cash flow swung dramatically from a positive $537.1M inflow in Q1 2025 to a $402.8M outflow in Q1 2026, a change of $939.9M. This reflects a shift in capital allocation strategy, including $69.3M in share buybacks initiated this quarter, and may indicate reduced external funding activity.
Source: 10-Q Cash Flow Statement, Q1 2026
The 570 basis point gross margin improvement is exceptional and may not be fully repeatable if it was driven by temporary factors such as favorable commodity hedges or pricing actions. Investors should assess whether this level of profitability is sustainable in subsequent quarters.
Source: 10-Q Income Statement, Q1 2026
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 3.10 $B | 2.81 $B | +10.65% |
Cost of Revenue $B | 1.88 $B | 1.86 $B | +1.09% |
Gross Profit $B | 1.22 $B | 0.94 $B | +29.49% |
Operating Income $M | 640.69 $M | 369.22 $M | +73.53% |
Net Income $M | 435.11 $M | 224.20 $M | +94.07% |
SG&A Expense $M | 576.04 $M | 558.67 $M | +3.11% |
Answers draw on this SEC filing and the data on this page
In Q2 FY2026, Hershey delivered strong top-line growth of 6.6% YoY to $2.79B and a 629.7% surge in net income to $457.67M, driven by 12% price realization and favorable commodity derivative mark-to-market adjustments.
Hershey (HSY) reported FY2025 revenue growth of 4.4% to $11.69B, but profitability collapsed as surging cocoa and input costs drove gross margin down nearly 14 percentage points to 33.5%, causing net income to plunge 60.2% to $883M.
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