The Hershey Company

Management did not restate full Q2 revenue, EPS, or gross margin figures in this Q&A-only transcript. They did say Q2 U.S. confection retail consumption was about 3%, but real demand was understated by about 2 points due to nonmeasured channel growth and Easter shipment timing, plus another point from retail inventory replenishment after low inventory in April. For the full year, they described the raised guidance as modest: gross margin is now expected to be just below 400 basis points of lift versus the prior reference to 400 basis points, with a significant improvement still expected in the back half. They also said North America confection organic sales should grow in both Q3 and Q4, Q3 should remain the strongest year-over-year earnings growth quarter because of last year’s high cocoa costs and tariffs, and the 2027 North America confection framework still starts from 2% growth in the segment, with Salt and international expected to add to total growth.

Kirk Tanner emphasized that the business is doing better than the quarter’s scanner data implied, with elasticities running on track or slightly better and second-half demand supported by innovation, merchandising, and a robust Halloween plan. He repeatedly framed the company as balancing growth and margin recovery through a mix of pricing discipline, innovation, productivity, and supply chain optimization rather than relying only on cocoa deflation. His tone was constructive and confident, but measured, stressing visibility into the second half while acknowledging tougher comps and a dynamic consumer and commodity backdrop.

Steven Voskuil focused on the bridge from Q2 into the back half: the modest guidance increase reflected replenishment that was expected later in the year but mostly happened in Q2, plus continued prudence around macro factors. He said gross margin still has a significant lift coming in the second half, though the full-year guide is now just below the prior 400-basis-point reference because of salty-snacking logistics and optimization costs; he also noted spot freight and higher logistics costs tied to supply chain constraints. On capital allocation, he said no additional share buybacks are planned in the back half, though Hershey remains opportunistic and keeps authorization available.

Analysts focused on why upside in organic sales and EPS did not translate into a bigger full-year guidance increase, and management answered that much of the benefit was timing-related and some reinvestment is still planned for the second half. Questions also centered on dots supply constraints, with management saying the problem was mainly capacity and automation issues that are largely behind them and that added capacity is coming in 2027. Other recurring topics were cocoa costs, 2027 and 2028 visibility, gross margin phasing, buybacks, and the impact of Snap and Halloween execution; management generally answered that the framework still holds, visibility is better on cocoa deflation next year, and the company has multiple levers to manage volatility.