HERSHEY CO

Previous wording

Throughout the first six months of 2026, we experienced net sales growth, driven primarily by pricing actions, and continued consumer demand for our brands, despite the persistent dynamic macroeconomic environment and ongoing pressures on our business. Higher manufacturing, logistics, and supply chain costs continue to challenge the business and drive incremental costs (see Consolidated Results of Operations included in this MD&A). Additionally, we utilize many exchange traded commodities for our business that are subject to price volatility, specifically cocoa products, which has continued to improve during the first six months of 2026 (see Part I, Item 3 - Quantitative and Qualitative Disclosures about Market Risk included in this Quarterly Report on Form 10-Q).

Current wording

Throughout the first nine months of 2026, we experienced net sales growth, driven primarily by pricing actions, successful implementation of acquisitions, and continued consumer demand for our brands, despite declines in sales volume, the persistently dynamic macroeconomic environment and ongoing pressures on our business. Higher logistics and supply chain costs continue to challenge the business and drive incremental costs (see Consolidated Results of Operations included in this MD&A). Additionally, we utilize many exchange traded commodities for our business that are subject to price volatility, specifically cocoa products, which experienced a market price increase during the quarter after declining throughout the first six months of 2026 (see Part I, Item 3 - Quantitative and Qualitative Disclosures About Market Risk included in this Quarterly Report on Form 10-Q).

Previous wording

Furthermore, changes in global trade policies, including tariffs on U.S. imports, and certain geopolitical events, specifically the conflict in the Middle East, continue to increase global economic and political uncertainty. We are continuing to monitor the ongoing regulations related to tariffs, specifically, goods imported into the U.S. from Canada, Mexico and other countries, as well as export markets, and the impact of tariff refunds on our business. As such, the scope and length of tariffs, including their effects on the broader economy and our business, continues to evolve. Additionally, we are actively monitoring the ongoing conflict in the Middle East and the potential impact on our business. For the first six months of 2026, this conflict did not have a material impact on our commodity prices or supply availability. However, we are continuing to monitor for any significant escalation or expansion of economic or supply chain disruptions or broader inflationary costs, which may result in material adverse effects on our results of operations.

Current wording

Furthermore, changes in global trade policies, including tariffs on U.S. imports, and certain geopolitical events, specifically the conflict in the Middle East, continue to increase global economic and political uncertainty. We are continuing to monitor the ongoing regulations related to tariffs, specifically those applicable to goods imported into the U.S. from Canada, Mexico and other countries, as well as export markets, and the impact of tariff refunds on our business. As such, the scope and length of tariffs, including their effects on the broader economy and our business, continues to evolve. Additionally, we are actively monitoring the ongoing conflict in the Middle East and the potential impact on our business, specifically supply chain disruptions and elevated freight costs. For the first nine months of 2026, this conflict did not have a material impact on our commodity prices or supply availability. However, we are continuing to monitor for any significant escalation or expansion of economic or supply chain disruptions or broader inflationary costs, which may result in material adverse effects on our results of operations.

Previous wording

Based on the length and severity of the fluctuating macroeconomic environment, including price volatility for our commodities, fluctuations in consumer shopping and consumption behavior, and ongoing changes in geopolitical events, including the imposition of tariffs, retaliatory tariffs and tariff refunds, as well as the conflict in the Middle East, we may continue to experience increasing supply chain costs, higher inflation and other impacts to our business. We will continue to evaluate the nature and extent of these evolving impacts on our business, consolidated results of operations, segment results, liquidity and capital resources.

Current wording

Based on the length and severity of the fluctuating macroeconomic environment, including price volatility for our commodities, fluctuations in consumer shopping and consumption behavior, and ongoing changes in geopolitical events, including the imposition of tariffs, retaliatory tariffs and tariff refunds, as well as the conflict in the Middle East, we may continue to experience increasing supply chain costs, higher inflation which may put pressure on consumer spending, and other impacts to our business. We will continue to evaluate the nature and extent of these evolving impacts on our business, consolidated results of operations, segment results, liquidity and capital resources.

Previous wording

Net sales were $2,787.3 million in the second quarter of 2026 compared to $2,614.7 million in the same period of 2025, an increase of $172.6 million, or 6.6%. The net sales increase reflects a favorable price realization of approximately 12%, primarily related to pricing actions within the North America Confectionery and International segments. Additionally, the 2025 acquisition of LesserEvil contributed approximately a 3% benefit. The increase was partially offset by a volume decrease of approximately 8%, primarily driven by volume declines in North America Confectionery and International segments, which more than offset the volume growth in the North America Salty Snacks segment. There was minimal impact from foreign currency exchange rates.

Current wording

Net sales were $3,275.5 million in the third quarter of 2026 compared to $3,181.4 million in the same period of 2025, an increase of $94.1 million, or 3.0%. The net sales increase reflects a favorable price realization of approximately 11%, primarily related to pricing actions across all segments. Additionally, the 2025 acquisition of LesserEvil contributed approximately a 2% benefit. There was minimal impact from foreign currency exchange rates. The increase was partially offset by a volume decrease of approximately 10%, primarily driven by volume declines in the North America Confectionery and International segments, which more than offset the volume growth in the North America Salty Snacks segment.

Previous wording

For the second quarter of 2026, our total U.S. retail takeaway decreased 5.4% in the expanded multi-outlet combined plus convenience store channels (MULO+ w/ Convenience), which includes candy, mint, gum, salty snacks and grocery items. Our U.S. candy, mint and gum (“CMG”) consumer takeaway decreased 8.6% and experienced a CMG market share decline. Our Salty consumer takeaway, excluding LesserEvil, increased 6.5% in the second quarter of 2026 and experienced a Salty, excluding LesserEvil, market share increase.

Current wording

For the third quarter of 2026, our total U.S. retail takeaway increased 2.2% in the expanded multi-outlet combined plus convenience store channels (MULO+ w/ Convenience), which includes candy, mint, gum, salty snacks and grocery items. Our U.S. candy, mint and gum (“CMG”) consumer takeaway increased 0.8% and experienced a CMG market share decline. Our Salty consumer takeaway, excluding LesserEvil, increased 4.0% in the third quarter of 2026 and experienced a Salty, excluding LesserEvil, market share increase.

Previous wording

Cost of sales were $1,524.0 million in the second quarter 2026 compared to $1,818.4 million in the same period of 2025, a decrease of $294.4 million, or 16.2%. The decrease was driven by $523.7 million, primarily due to lower sales volume, transformation program net savings and $117.4 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases (See Part I, Item 3 - Quantitative and Qualitative Disclosures About Market Risk included in this Quarterly Report on Form 10-Q for more information). The decrease was partially offset by $229.3 million of higher costs, predominantly due to unfavorable supply chain costs and unfavorable mix.

Current wording

Cost of sales were $1,764.5 million in the third quarter 2026 compared to $2,144.1 million in the same period of 2025, a decrease of $379.6 million, or 17.7%. The decrease was driven by $367.0 million primarily related to lower commodity costs, net savings related to our AAA Initiative, tariff refunds and $49.1 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases (See Part I, Item 3 - Quantitative and Qualitative Disclosures About Market Risk included in this Quarterly Report on Form 10-Q for more information). The decrease was partially offset by $36.2 million related to higher freight and logistics expenses.

Previous wording

Gross margin was 45.3% in the second quarter of 2026 compared to 30.5% in the same period of 2025, an increase of 1,490 basis points. The increase was driven by favorable net price realization and net savings related to our AAA Initiative, partially offset by unfavorable supply chain costs and volume declines.

Current wording

Gross margin was 46.1% in the third quarter of 2026 compared to 32.6% in the same period of 2025, an increase of 1,350 basis points. The increase was driven by favorable net price realization, favorable derivative mark-to-market activity, tariff refunds, and net savings related to our AAA Initiative, partially offset by volume declines and higher freight and logistics expenses.

Previous wording

SM&A expenses were $620.6 million in the second quarter of 2026 compared to $603.2 million in the same period of 2025, an increase of $17.4 million, or 2.9%. SM&A expenses, excluding advertising and related consumer marketing, increased 6.0% in the second quarter of 2026, driven by higher capability and technology investments, partially offset by lower compensation and benefit costs, as well as net savings related to our AAA Initiative versus the prior year. Advertising and related consumer marketing expenses decreased 3.3%, driven by efficiencies and timing of non-working media investment in the North America Confectionery segment.

Current wording

SM&A expenses were $692.8 million in the third quarter of 2026 compared to $600.5 million in the same period of 2025, an increase of $92.3 million, or 15.4%. SM&A expenses, excluding advertising and related consumer marketing, increased 14.5% in the third quarter of 2026, driven by higher capability and technology investments, partially offset by lower compensation and benefit costs, as well as net savings related to our AAA Initiative versus the prior year. Advertising and related consumer marketing expenses increased 17.1%, driven by the expansion of national brand campaigns in the North America Confectionery and North America Salty Snacks segments.

Previous wording

We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Excluding the portion recorded within Cost of Sales and SM&A expenses (as noted above), we recorded business realignment costs of $0.1 million during the second quarter of 2026 versus $0.3 million in the second quarter of 2025. The costs related to the AAA Initiative, which commenced in 2024, focused on leveraging new technology to improve supply chain and manufacturing-related spend, and optimize selling, general and administrative expenses. Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in Note 9 to the Unaudited Consolidated Financial Statements.

Current wording

We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Excluding the portion recorded within Cost of Sales and SM&A expenses (as noted above), we recorded business realignment costs of $0.5 million during the third quarter of 2026 versus $2.2 million in the third quarter of 2025. The costs related to the AAA Initiative, which commenced in 2024, focused on leveraging new technology to improve supply chain and manufacturing-related spend, and optimize selling, general and administrative expenses. Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in Note 9 to the Unaudited Consolidated Financial Statements.

Previous wording

Operating profit was $642.6 million in the second quarter of 2026 compared to $192.8 million in the same period of 2025, an increase of $449.8 million, or 233.3%. The increase was primarily due to higher gross profit, as well as lower business realignment expenses, partially offset by increased SM&A expenses, as noted above. Operating profit margin increased to 23.1% in 2026 from 7.4% in 2025, driven by the same factors noted above that resulted in higher gross margin for the period.

Current wording

Operating profit was $817.7 million in the third quarter of 2026 compared to $434.6 million in the same period of 2025, an increase of $383.1 million, or 88.1%. The increase was primarily due to higher gross profit, as well as lower business realignment expenses, partially offset by increased SM&A expenses, as noted above. Operating profit margin increased to 25.0% in 2026 from 13.7% in 2025, driven by the same factors noted above that resulted in higher gross margin for the period.

Previous wording

Net interest expense was $50.0 million in the second quarter of 2026 compared to $46.0 million in the same period of 2025, an increase of $4.0 million, or 8.5%. The increase was primarily due to an increase in short-term debt, slightly offset by lower long-term debt balances.

Current wording

Net interest expense was $48.7 million in the third quarter of 2026 compared to $51.5 million in the same period of 2025, a decrease of $2.8 million, or 5.4%. The decrease was primarily due to lower long-term debt balances, partially offset by lower interest income.

Previous wording

Other (income) expense, net was expense of $4.4 million in the second quarter of 2026 versus income of $2.3 million in the second quarter of 2025, a change of $6.7 million. The increase in net expense was predominantly driven by an increase of $3.4 million of non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans in the second quarter of 2026 versus the same period of 2025 and a decrease in other corporate income of $3.3 million.

Current wording

Other (income) expense, net was expense of $1.0 million in the third quarter of 2026 versus expense of $11.2 million in the third quarter of 2025, a change of $10.2 million. The decrease in net expense was predominantly driven by a decrease of $10.6 million in non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans in the third quarter of 2026 versus the same period of 2025.

Previous wording

The effective income tax rate was 22.2% for the second quarter of 2026 compared with 57.9% for the second quarter of 2025. The 2025 effective tax rate was higher due to the impact of tax reserves and foreign rate differentials related to mark-to-market activity. Relative to the 21% statutory rate, the 2026 effective tax rate was primarily impacted by state taxes and foreign rate differential. Relative to the 21% statutory rate, the 2025 effective tax rate was primarily impacted by state taxes, foreign rate differentials and tax reserves.

Current wording

The effective income tax rate was 24.4% for the third quarter of 2026 compared with 25.7% for the third quarter of 2025. The 2026 effective tax rate was lower due to the impact of tax reserves and foreign rate differentials related to mark-to-market activity. Relative to the 21% statutory rate, the 2026 effective tax rate was primarily impacted by state taxes and foreign rate differential. Relative to the 21% statutory rate, the 2025 effective tax rate was primarily impacted by state taxes, foreign rate differentials and tax reserves.

Previous wording

Net income was $457.7 million in the second quarter of 2026 compared to $62.7 million in the same period of 2025, an increase of $395.0 million, or 629.7%. EPS-diluted was $2.26 in the second quarter of 2026 compared to $0.31 in the second quarter of 2025, an increase of $1.95, or 629.0%. The increase in both net income and EPS-diluted was driven by higher gross profit and lower business realignment costs, partially offset by higher SM&A expenses, higher other (income) expense, higher interest expense, and higher income taxes. Higher income taxes were driven by higher income before income taxes, partially offset by a lower effective tax rate.

Current wording

Net income was $580.8 million in the third quarter of 2026 compared to $276.3 million in the same period of 2025, an increase of $304.5 million, or 110.2%. EPS-diluted was $2.88 in the third quarter of 2026 compared to $1.36 in the third quarter of 2025, an increase of $1.52, or 111.8%. The increase in both net income and EPS-diluted was driven by higher gross profit, lower other (income) expense, lower business realignment costs, and lower interest expense, partially offset by higher SM&A expenses and higher income taxes. Higher income taxes were driven by higher income before income taxes, partially offset by a lower effective tax rate.

Previous wording

Net sales were $5,891.5 million in the first six months of 2026 compared to $5,420.1 million during the same period of 2025, an increase of $471.4 million, or 8.7%. The net sales increase was driven by favorable price realization of approximately 11% within our North America Confectionery and International segments. Additionally, the 2025 acquisition of LesserEvil contributed approximately a 2% benefit. Further, there was a favorable foreign currency exchange impact of less than 1%. The net sales increase was partially offset by a volume decrease of approximately 5%, driven by volume declines in North America Confectionery and International segments, which more than offset the volume growth in the North America Salty Snacks segment.

Current wording

Net sales were $9,167.0 million in the first nine months of 2026 compared to $8,601.6 million during the same period of 2025, an increase of $565.4 million, or 6.6%. The net sales increase was driven by favorable price realization of approximately 11% within our North America Confectionery and International segments. Additionally, the 2025 acquisition of LesserEvil contributed approximately a 2% benefit. Further, there was minimal impact from foreign currency exchange rates. The net sales increase was partially offset by a volume decrease of approximately 7%, driven by volume declines in the North America Confectionery and International segments, which more than offset the volume growth in the North America Salty Snacks segment.

Previous wording

For the first six months of 2026, our total U.S. retail takeaway increased 4.4% in the expanded multi-outlet combined plus convenience store channels (IRI MULO + C-Stores), which includes candy, mint, gum, salty snacks and grocery items. Our U.S. CMG consumer takeaway increased 2.7%, despite a CMG market share decline. Our Salty consumer takeaway increased 8.5% and experienced a Salty market share increase.

Current wording

For the first nine months of 2026, our total U.S. retail takeaway increased 3.8% in the expanded multi-outlet combined plus convenience store channels (MULO+ w/ Convenience), which includes candy, mint, gum, salty snacks and grocery items. Our U.S. CMG consumer takeaway increased 2.2%, despite a CMG market share decline. Our Salty consumer takeaway, excluding LesserEvil, increased 6.7% and experienced a Salty, excluding LesserEvil, market share increase.

Previous wording

Cost of sales were $3,405.4 million in the first six months of 2026 compared to $3,679.6 million in the same period of 2025, a decrease of $274.2 million, or 7.5%. The decrease was driven by $762.9 million of lower costs, primarily related to $142.4 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases (See Part I, Item 3 - Quantitative and Qualitative Disclosures About Market Risk included in this Quarterly Report on Form 10-Q for more information), lower commodity costs and lower sales volume. The decrease was partially offset by $488.8 million, primarily related to increased supply chain costs and unfavorable mix.

Current wording

Cost of sales were $5,170.0 million in the first nine months of 2026 compared to $5,823.7 million in the same period of 2025, a decrease of $653.7 million, or 11.2%. The decrease was driven by $1,039.5 million primarily related to lower commodity costs, net savings related to our AAA Initiative, tariff refunds and $191.5 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases (See Part I, Item 3 - Quantitative and Qualitative Disclosures About Market Risk included in this Quarterly Report on Form 10-Q for more information). The decrease was partially offset by $385.8 million, primarily related to increased supply chain costs and unfavorable mix.

Previous wording

Gross margin was 42.2% in the first six months of 2026 compared to 32.1% in the same period of 2025, an increase of 1,010 basis points. The increase was driven by favorable net price realization and net savings related to our AAA Initiative, partially offset by unfavorable supply chain costs and volume declines.

Current wording

Gross margin was 43.6% in the first nine months of 2026 compared to 32.3% in the same period of 2025, an increase of 1,130 basis points. The increase was driven by favorable net price realization, net savings related to our AAA Initiative and tariff refunds, partially offset by unfavorable supply chain costs and volume declines.

Previous wording

SM&A expenses were $1,196.6 million in the first six months of 2026 compared to $1,161.9 million in the same period of 2025, an increase of $34.7 million, or 3.0%. SM&A expenses, excluding advertising and related consumer marketing, increased 1.1% in the first six months of 2026 as compared to the first six months of 2025. Advertising and related consumer marketing expenses increased 4.0%, driven by increased spending in the North America Salty Snacks and International segments, partially offset by decreased spending in the North America Confectionery segment.

Current wording

SM&A expenses were $1,889.4 million in the first nine months of 2026 compared to $1,762.4 million in the same period of 2025, an increase of $127.0 million, or 7.2%. SM&A expenses, excluding advertising and related consumer marketing, increased 7.6% in the first nine months of 2026 as compared to the first nine months of 2025, driven by higher capability and technology investments. Advertising and related consumer marketing expenses increased 6.4%, driven by increased spending across all segments.

Previous wording

We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Excluding the portion recorded within Cost of Sales and SM&A expenses (as noted above), we recorded business realignment costs of $6.1 million during the first six months of 2026 versus $16.6 million in the first six months of 2025. The costs related to the AAA Initiative, which commenced in 2024, focused on leveraging new technology to improve supply chain and manufacturing-related spend, and optimize selling, general and administrative expenses. Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in Note 9 to the Unaudited Consolidated Financial Statements.

Current wording

We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Excluding the portion recorded within Cost of Sales and SM&A expenses (as noted above), we recorded business realignment costs of $6.6 million during the first nine months of 2026 versus $18.8 million in the first nine months of 2025. The costs related to the AAA Initiative, which commenced in 2024, focused on leveraging new technology to improve supply chain and manufacturing-related spend, and optimize selling, general and administrative expenses. Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in Note 9 to the Unaudited Consolidated Financial Statements.

Previous wording

Operating profit was $1,283.4 million in the first six months of 2026 compared to $562.0 million in the same period of 2025, an increase of $721.4 million, or 128.3%. The increase was driven by higher gross profit and lower business realignment activities, partially offset by higher SM&A expense, as noted above. Operating profit margin increased to 21.8% in the first six months of 2026 from 10.4% in the same period in 2025, driven by the same factors that resulted in higher gross margin for the period.

Current wording

Operating profit was $2,101.0 million in the first nine months of 2026 compared to $996.6 million in the same period of 2025, an increase of $1,104.4 million, or 110.8%. The increase was driven by higher gross profit and lower business realignment activities, partially offset by higher SM&A expense, as noted above. Operating profit margin increased to 22.9% in the first nine months of 2026 from 11.6% in the same period in 2025, driven by the same factors that resulted in higher gross margin for the period.

Previous wording

Net interest expense was $99.8 million in the first six months of 2026 compared to $90.7 million in the same period of 2025, an increase of $9.1 million, or 10.1%. The increase was primarily due to an increase in short-term debt, slightly offset by lower long-term debt balances.

Current wording

Net interest expense was $148.5 million in the first nine months of 2026 compared to $142.1 million in the same period of 2025, an increase of $6.4 million, or 4.5%. The increase was primarily due to lower interest income, partially offset by lower long-term debt balances.

Previous wording

Other (income) expense, net was expense of $2.6 million in the firstsix months of 2026 versus income of $1.4 million in the firstsix months of 2025, a change of $4.0 million. The increase in net expense was predominantly driven by a decrease in other corporate income of $3.0 million and an increase of $1.0 million of non-service cost components of net periodic benefit costs relating to pension and other post-retirement benefit plans.

Current wording

Other (income) expense, net was expense of $3.6 million in the first nine months of 2026 versus expense of $9.8 million in the first nine months of 2025, a change of $6.2 million. The decrease in net expense was predominantly driven by a decrease of $9.5 million in non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans, partially offset by lower other corporate income of $3.3 million.

Previous wording

Our effective income tax rate was 24.4% for the first six months of 2026 compared with 39.3% for the first six months of 2025. The 2025 effective tax rate was higher due to the impact of tax reserves and foreign rate differentials related to mark-to-market activity. Relative to the 21% statutory rate, the 2026 effective tax rate was primarily impacted by state taxes and foreign rate differential. Relative to the 21% statutory rate, the 2025 effective tax rate was primarily impacted by state taxes, foreign rate differentials and tax reserves.

Current wording

Our effective income tax rate was 24.4% for the first nine months of 2026 compared with 33.3% for the first nine months of 2025. The 2026 effective tax rate was lower due to the impact of tax reserves and foreign rate differentials related to mark-to-market activity. Relative to the 21% statutory rate, the 2026 effective tax rate was primarily impacted by state taxes and foreign rate differential. Relative to the 21% statutory rate, the 2025 effective tax rate was primarily impacted by state taxes, foreign rate differentials and tax reserves.

Previous wording

Net income was $892.8 million in the first six months of 2026 compared to $286.9 million in the same period of 2025, an increase of $605.9 million, or 211.2%. EPS-diluted was $4.39 in the first six months of 2026 compared to $1.41 in the same period of 2025, an increase of $2.98, or 211.3%. The increase in both net income and EPS-diluted was driven by higher gross profit, lower business realignment costs, partially offset by higher SM&A expenses, higher interest expense, higher other (income) expense, and higher income taxes. Higher income taxes were driven by higher income before income taxes, partially offset by a lower effective tax rate.

Current wording

Net income was $1,473.6 million in the first nine months of 2026 compared to $563.2 million in the same period of 2025, an increase of $910.4 million, or 161.6%. EPS-diluted was $7.27 in the first nine months of 2026 compared to $2.77 in the same period of 2025, an increase of $4.50, or 162.5%. The increase in both net income and EPS-diluted was driven by higher gross profit, lower business realignment costs, and lower other (income) expense, partially offset by higher SM&A expenses, higher income taxes, and higher interest expense. Higher income taxes were driven by higher income before income taxes, partially offset by a lower effective tax rate.

Previous wording

The North America Confectionery segment is responsible for our chocolate and non-chocolate confectionery market position in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. While a less significant component, this segment also includes our retail operations, including Hershey’s Chocolate World stores in Hershey, Pennsylvania; New York, New York; Las Vegas, Nevada; Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain trademarks and products to third parties around the world. North America Confectionery results, which accounted for 78.0% and 79.8% of our net sales for the three months ended June 28, 2026 and June 29, 2025, respectively, were as follows:

Current wording

The North America Confectionery segment is responsible for our chocolate and non-chocolate confectionery market position in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. While a less significant component, this segment also includes our retail operations, including Hershey’s Chocolate World stores in Hershey, Pennsylvania; New York, New York; Las Vegas, Nevada; Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain trademarks and products to third parties around the world. North America Confectionery results, which accounted for 81.1% and 82.2% of our net sales for the three months ended September 27, 2026 and September 28, 2025, respectively, were as follows:

Previous wording

Net sales of our North America Confectionery segment were $2,173.6 million in the second quarter of 2026 compared to $2,085.5 million in the same period of 2025, an increase of $88.1 million, or 4.2%. The increase was driven by favorable price realization of approximately 14%, primarily due to the pricing action announced in 2025. Volume declined approximately 10%, driven primarily by price elasticity. Additionally, there was no impact from foreign currency exchange rates.

Current wording

Net sales of our North America Confectionery segment were $2,656.5 million in the third quarter of 2026 compared to $2,615.6 million in the same period of 2025, an increase of $40.9 million, or 1.6%. The increase was driven by favorable price realization of approximately 13%, primarily due to the pricing action announced in 2025. Volume declined approximately 11%, driven primarily by price elasticity. Additionally, there was no impact from foreign currency exchange rates.

Previous wording

Net sales of our North America Confectionery segment were $4,663.5 million in the first six months of 2026 compared to $4,385.6 million in the same period of 2025, an increase of $277.9 million, or 6.3%. The increase was driven by favorable price realization of approximately 13%, primarily due to the pricing action announced in 2025. Volume declined approximately 7%, driven primarily by price elasticity. Additionally, there was no impact from foreign currency exchange rates.

Current wording

Net sales of our North America Confectionery segment were $7,319.9 million in the first nine months of 2026 compared to $7,001.2 million in the same period of 2025, an increase of $318.7 million, or 4.6%. The increase was driven by favorable price realization of approximately 13%, primarily due to the pricing action announced in 2025. Volume declined approximately 8%, driven primarily by price elasticity. Additionally, there was minimal impact from foreign currency exchange rates.

Previous wording

Our North America Confectionery segment income was $1,498.2 million in the first six months of 2026 compared to $1,200.3 million in the same period of 2025, an increase of $297.9 million or 24.8%. The increase was driven primarily by net price realization, supply chain productivity, net savings related to our AAA Initiative, and lower commodity costs, partially offset by higher logistic expenses.

Current wording

Our North America Confectionery segment income was $2,447.9 million in the first nine months of 2026 compared to $1,771.8 million in the same period of 2025, an increase of $676.1 million, or 38.2%. The increase was driven primarily by net price realization, lower commodity costs, tariff refunds, and net savings related to our AAA Initiative, partially offset by lower volumes and higher advertising and related consumer marketing investments.

Previous wording

The North America Salty Snacks segment is responsible for our grocery and snacks market positions, including our salty snacking products. North America Salty Snacks results, which accounted for 13.9% and 12.1% of our net sales for the three months ended June 28, 2026 and June 29, 2025, respectively, were as follows:

Current wording

The North America Salty Snacks segment is responsible for our grocery and snacks market positions, including our salty snacking products. North America Salty Snacks results, which accounted for 12.0% and 10.1% of our net sales for the three months ended September 27, 2026 and September 28, 2025, respectively, were as follows:

Previous wording

Net sales of our North America Salty Snacks segment were $387.8 million in the second quarter of 2026 compared to $315.5 million in the same period of 2025, an increase of $72.3 million, or 22.9%. The increase was predominantly due to the acquisition of LesserEvil in November 2025, which provided a benefit of approximately 22%. Further, volume increased approximately 4%, primarily driven by Dot’s Homestyle Pretzels. Price realization declined approximately 3% primarily driven by higher trade promotional activities for Dot’s Homestyle Pretzels and SkinnyPop.

Current wording

Net sales of our North America Salty Snacks segment were $392.7 million in the third quarter of 2026 compared to $321.0 million in the same period of 2025, an increase of $71.7 million, or 22.3%. The increase was predominantly due to the acquisition of LesserEvil in November 2025, which provided a benefit of approximately 20%. Further, volume increased approximately 1%, primarily driven by Dot’s Homestyle Pretzels. Price realization increased approximately 1% primarily driven by Dot’s Homestyle Pretzels and SkinnyPop.

Previous wording

Net sales of our North America Salty Snacks segment were $737.9 million in the first six months of 2026 compared to $593.3 million in the same period of 2025, an increase of $144.6 million, or 24.4%. The increase was predominantly due to the acquisition of LesserEvil in November 2025, which provided a benefit of approximately 21%. Further, volume increased approximately 4%, primarily related to Dot’s Homestyle Pretzels. The net sales increase was partially offset by price realization declines of approximately 1%, primarily driven by higher trade promotional activities for SkinnyPop.

Current wording

Net sales of our North America Salty Snacks segment were $1,130.6 million in the first nine months of 2026 compared to $914.3 million in the same period of 2025, an increase of $216.3 million, or 23.7%. The increase was predominantly due to the acquisition of LesserEvil in November 2025, which provided a benefit of approximately 21%. Further, volume increased approximately 3%, primarily related to Dot’s Homestyle Pretzels. The net sales increase was partially offset by price realization declines of approximately 1%, primarily driven by SkinnyPopand Pirates Booty.

Previous wording

Our North America Salty Snacks segment income was $96.9 million in the first six months of 2026 compared to $108.3 million inthe same period of 2025, a decrease of $11.5 million, or 10.6%. The decrease was primarily due to higher supply chain costs, including costs related to a voluntary temporary product withdrawal, and increased SM&A expenses.

Current wording

Our North America Salty Snacks segment income was $144.3 million in the first nine months of 2026 compared to $166.1 million inthe same period of 2025, a decrease of $21.8 million, or 13.1%. The decrease was primarily due to higher supply chain costs, including costs related to a voluntary temporary product withdrawal, and increased SM&A expenses, partially offset by increased volume.

Previous wording

The International segment includes all other countries where we currently manufacture, import, market, sell or distribute chocolate and non-chocolate confectionery and other products. We currently have operations and manufacture product in Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Latin America, as well as Europe, Asia-Pacific (“APAC”), the Middle East and Africa (“MEA”) and other regions. International results, which accounted for 8.1% and 8.2% of our net sales for the three months ended June 28, 2026 and June 29, 2025, respectively, were as follows:

Current wording

The International segment includes all other countries where we currently manufacture, import, market, sell or distribute chocolate and non-chocolate confectionery and other products. We currently have operations and manufacture product in Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Latin America, as well as Europe, Asia-Pacific (“APAC”), the Middle East and Africa (“MEA”) and other regions. International results, which accounted for 6.9% and 7.7% of our net sales for the three months ended September 27, 2026 and September 28, 2025, respectively, were as follows:

Previous wording

Net sales of our International segment were $225.9 million in the second quarter of 2026 compared to $213.7 million in the same period of 2025, an increase of $12.2 million, or 5.7%. The increase was due to favorable price realization of approximately 10%, resulting from strategic pricing actions across key markets. The increase was also driven by a favorable impact from foreign currency exchange rates of approximately 4%. The increase was partially offset by volume declines primarily drive by price elasticity across markets of approximately 8%.

Current wording

Net sales of our International segment were $226.4 million in the third quarter of 2026 compared to $244.8 million in the same period of 2025, a decrease of $18.4 million, or 7.5%. The decrease was due to volume declines of approximately 14%, primarily driven by price elasticity across markets. The decrease was partially offset by favorable price realization of approximately 4%, resulting from strategic pricing actions across key markets. The decrease was further offset by a favorable impact from foreign currency exchange rates of approximately 2%.

Previous wording

Our International segment generated a loss of $5.1 million in the second quarter of 2026 compared to income of $19.8 million in the second quarter of 2025, a decrease of $24.9 million, or 126.0%, driven by higher commodity and manufacturing costs and advertising investment, partially offset by favorable price realization, supply chain productivity, and net savings related to our AAA Initiative.

Current wording

Our International segment generated a loss of $30.0 million in the third quarter of 2026 compared to a loss of $13.6 million in the third quarter of 2025, a decrease of $16.4 million, or 120.5%, driven by higher commodity and manufacturing costs and lower volumes, partially offset by favorable price realization, net savings related to our AAA Initiative, and favorable mix.

Previous wording

Net sales of our International segment were $490.1 million in the first six months of 2026 compared to $441.2 million in the same period of 2025, an increase of $48.9 million, or 11.1%. The increase was driven by a favorable price realization of approximately 11%, primarily due to strategic pricing actions across key markets. The increase was further due to a favorable impact from foreign currency exchange rates of approximately 5%. The increase was partially offset by volume declines of approximately 5% across certain key markets.

Current wording

Net sales of our International segment were $716.4 million in the first nine months of 2026 compared to $686.0 million in the same period of 2025, an increase of $30.4 million, or 4.4%. The increase was driven by a favorable price realization of approximately 8%, primarily due to strategic pricing actions across key markets. The increase was also due to a favorable impact from foreign currency exchange rates of approximately 4%. The increase was partially offset by volume declines of approximately 8% across certain key markets.

Previous wording

Our International segment generated income of $10.1 million in the first six months of 2026 compared to $48.5 million in the first six months of 2025, a decrease of $38.4 million, or 79.2%, driven by higher supply chain costs, higher commodity and manufacturing costs and unfavorable mix, which more than offset favorable price realization and net savings related to our AAA Initiative.

Current wording

Our International segment generated a loss of $19.9 million in the first nine months of 2026 compared to income of $34.9 million in the first nine months of 2025, a decrease of $54.8 million, or 157.0%, driven by higher supply chain costs and higher commodity and manufacturing costs, partially offset by favorable price realization, favorable mix, and net savings related to our AAA Initiative.

Previous wording

In the second quarter of 2026, unallocated corporate expense totaled $215.1 million, as compared to $181.5 million in the second quarter of 2025, an increase of $33.6 million, or 18.5%. The increase was primarily driven by continued investments in technology and higher acquisition and integration costs, partially offset by lower compensation and benefits costs.

Current wording

In the third quarter of 2026, unallocated corporate expense totaled $249.5 million, as compared to $194.7 million in the third quarter of 2025, an increase of $54.8 million, or 28.1%. The increase was primarily driven by continued investments in technology and higher acquisition and integration costs, partially offset by lower compensation and benefits costs.

Previous wording

In the first six months of 2026, unallocated corporate expense totaled $372.8 million, as compared to $342.0 million in the first six months of 2025, an increase of $30.9 million, or 9.0%. The increase was primarily drivenby continued investments in technology and higher acquisition and integration costs, partially offset by lower compensation and benefits costs.

Current wording

In the first nine months of 2026, unallocated corporate expense totaled $622.3 million, as compared to $536.7 million in the first nine months of 2025, an increase of $85.7 million, or 16.0%. The increase was primarily drivenby continued investments in technology and higher acquisition and integration costs, partially offset by lower compensation and benefits costs.