The Hershey Company Q1 FY2026 earnings call

• Retail execution: Focus on SKU gains, deploying stand - up bags, measuring on - shelf availability weekly, and optimizing perimeter with tent pole activation around seasons like 4th of July. - Seasonal strategies: Confident in second half seasons with good buys and partnerships, and looking to be more disruptive in seasons. - Innovation: High expectations for elevated Hershey product, innovation across portfolio including Suites, Salty snacks; R&D focused on premium, Suites, better for you; functional snacking is a key growth area with investment in R&D and JV.

C - Store channel saw mild impact from higher gas prices initially, with frequency up but purchase less; confection business in line with expectation; Suites business has Jelly Rancher performing well, with new items launched and robust pipeline; Reese's and Hershey's brands non - seasonals grew materially; Salty portfolio has some drag from private label but overall positive; Functional snacking is a growing area with high growth potential.

• Upward/downward revision or maintenance: Still within earlier 2 - 4% organic sales growth target for 27, with elasticities running favorable but being cautious due to macro factors like oil price and need for mid - year visibility; confident in managing controllables like innovation, media ROIs, tent poles, and productivity; cocoa market outlook with cautious long - term view and potential upside in 27 and beyond.

• Macro challenges: Higher gas prices impact on C - Store channel if sustained; oil - related costs indirectly affecting packaging and freight; accelerated health and wellness trends and GLP - 1 adoption could impact confection category but category is insulated; competition and cocoa market volatility.

Q: Please provide more color on sales in C - Store channel and support for it.

A: Mild impact from higher gas prices initially, frequency up but purchase less, channel robust currently, staying focused on retail partners.

Q: Color on costs for packaging and freight.

A: Not seeing big impact, good visibility through 2026 with hedging program.

Q: Merchandising front, pack types and promotions.

A: Deploying stand - up bags, measuring on - shelf availability, activating perimeter with tent poles for occasions like 4th of July.

Q: Expected headline organic sales growth slowdown in second quarter.

A: Slight down due to timing, Easter sell - through strong and international factor.

Q: Spring shelf resets relative to past years.

A: More impactful than recent years, win for portfolio.

Q: Expectations for Hershey premium product.

A: High expectations, product loved in testing.

Q: Suites' performance and expectations.

A: Jelly Rancher performing well, new items launched, robust pipeline.

Q: Macro headwinds on health and wellness and GLP - 1.

A: Confection category insulated, monitored but category is treat - based.

Q: Price elasticity and its impact.

A: Elasticities running favorable, informs view on performance and 2 - 4% target.

Q: Tent poles retail execution and messaging.

A: Worked with customers, brought retail theater, sales force focused on big moments.

Q: Reese's expansion in Europe.

A: Thriving in UK and Europe, plan to scale, working in Brazil and Mexico.

Q: Innovation as percent of sales and focus.

A: High single - digit contribution, focus on premium, Suites, better for you.

Q: Hershey and Reese's brand non - seasonals growth drivers.

A: Hershey campaign during Olympics, Reese's March Madness event.

Q: Cocoa market outlook.

A: Cautious long - term, potential upside in 27 and beyond.

Q: Risks from higher oil - related costs.

A: Small exposure, indirect impact through packaging.

Q: Non - core portfolio drag.

A: Private label drag but Salty portfolio growth from branded products.

Q: Functional snacking business.

A: High growth, investing in R&D, JV with VitaKey.

Q: Margin question on confection.

A: Gross margin and operating margin have deviation due to media investment.

Q: SM&A and marketing expectations.

A: SMA came in light in Q1 but full - year expectation unchanged, SMA ramping in year.

Q: Premium chocolate plan.

A: Focus on accessible premium with brands like Brookside, Cadbury, and new brands for Gen Z.