10.6%$3.10B$2.81B
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: Source: 10-Q Income Statement, Q1 2026
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%
++5.73% YoY
Operating Income
$640.69M
++73.53% YoY
Filed · Source: SEC EDGAR 10-Q 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: 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: 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: Source: 10-Q Income Statement, Q1 2026
2 more insights available
Upgrade to unlockHershey 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: Source: 10-Q Balance Sheet, Q1 2026
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.35 versus the $2.07 analyst consensus — a +13.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.1B | $2.81B | +10.65% |
Cost of Revenue | $1.88B | $1.86B | +1.09% |
Gross Profit | $1.22B | $944.27M | +29.49% |
Operating Income | $640.69M | $369.22M | +73.53% |
Net Income | $435.11M | $224.2M | +94.07% |
SG&A Expense | $576.04M | $558.67M | +3.11% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $13.84B | $13.97B | -0.91% |
Current Assets | $3.77B | $4.8B | -21.56% |
Total Liabilities | $9.11B | $9.28B | -1.89% |
Current Liabilities | $3.04B | $3.02B | +0.78% |
Long-Term Debt | $5.19B | $5.78B | -10.25% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $468.81M | $396.68M | +18.18% |
Investing Cash Flow | $-117.12M | $-146.99M | +20.32% |
Financing Cash Flow | $-402.84M | $537.08M | -175.01% |
Share Buybacks | $69.27M | $0 | — |
D&A | $133M | $119.56M | +11.24% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 39.4% | 33.7% | +5.73% |
Operating Margin | 20.6% | 13.2% | +7.48% |
Net Margin | 14.0% | — | — |
ROA | 3.1% | — | — |
Current Ratio | $1.24 | — | — |
Other companies in Packaged Foods & Meats
Hershey had an exceptionally strong Q1 2026, with revenue rising 10.6% to $3.10B and net income nearly doubling to $435.1M from $224.2M a year ago. Gross margin expanded sharply by 570 basis points to 39.4%, and operating income surged 73.5% to $640.7M, making it one of the company's strongest quarterly performances in recent memory.
The primary driver was significant gross margin expansion — cost of revenue grew only 1.1% while revenue grew 10.6%, suggesting improved pricing power and/or easing commodity input costs. SG&A expenses were also well-controlled, growing just 3.1% to $576.0M, which amplified the operating leverage and drove operating margin to 20.6%.
Key risks include Hershey's exposure to volatile commodity prices (cocoa, sugar, dairy) that could reverse the recent gross margin gains, as well as a $5.19B long-term debt balance that requires ongoing management. Additionally, current assets declined 21.6% year-over-year, tightening the current ratio to 1.24x, which bears watching if business conditions soften.
Yes — Hershey generated $468.8M in operating cash flow in Q1 2026, up 18.2% from $396.7M in Q1 2025, confirming that strong reported earnings are backed by real cash. Estimated free cash flow was approximately $351.7M after $117.1M in investing activities, providing ample capacity for debt reduction, dividends, and the $69.3M in share buybacks initiated this quarter.
Hershey's financial health appears solid with improving profitability metrics — net margin of 14.0%, operating margin of 20.6%, and ROA of 3.1%. Long-term debt declined 10.2% to $5.19B, and operating cash flow grew 18.2%, though the current ratio of 1.24x and the 21.6% decline in current assets are areas to monitor for near-term liquidity.