v3.26.1
SEGMENT INFORMATION
 6 Months Ended
Jun. 28, 2026
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The Company reports its operations through three segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International. This organizational structure aligns with how our Chief Operating Decision Maker (“CODM”), Kirk Tanner, President and Chief Executive Officer, manages our business, including resource allocation and performance assessment, and further aligns with our product categories and the key markets we serve.
•North America Confectionery – This segment is responsible for our traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes 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. 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 of the Company’s trademarks and products to third parties around the world.
•North America Salty Snacks – This segment is responsible for our salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks.
•International – International is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. 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 Asia, Latin America, Middle East, Europe, Africa and other regions.
For segment reporting purposes, the CODM uses “segment income” to evaluate segment performance and allocate resources, including considering budget-to-actual variances and prior year-to-actual variances on a monthly basis. Segment income excludes unallocated general corporate administrative expenses, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs and other unusual gains or losses that are not part of our measurement of segment performance. These items of our operating profit are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM as well as the measure of segment performance used for incentive compensation purposes.
As discussed in Note 5, derivatives used to manage commodity price risk are not designated for hedge accounting treatment. These derivatives are recognized at fair market value with the resulting realized and unrealized (gains) losses recognized in unallocated derivative (gains) losses outside of the reporting segment results until the related inventory is sold, at which time the related gains and losses are reallocated to segment income. This enables us to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income.
Certain manufacturing, warehousing, distribution and other activities supporting our global operations are integrated to maximize efficiency and productivity. As a result, assets and capital expenditures are not managed on a segment basis and are not included in the information reported to the CODM for the purpose of evaluating performance or allocating resources. We disclose depreciation and amortization that is generated by segment-specific assets, since these amounts are included within the measure of segment income reported to the CODM.
Our segment net sales and earnings for the three months ended June 28, 2026 and June 29, 2025 were as follows:
For the three months ended June 28, 2026
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$2,173,570 $387,845 $225,891 $2,787,306 
Cost of sales1,184,812 259,356 182,736 
SM&A expense282,973 65,911 48,300 
Total segment income (loss)$705,785 $62,578 $(5,145)$763,218 
Unallocated corporate expense (1)215,122 
Unallocated mark-to-market gains on commodity derivatives(102,907)
Costs associated with business realignment activities (see Note 9)
8,362 
Operating profit$642,641 
Interest expense, net (see Note 4)
49,963 
Other (income) expense, net (see Note 17)
4,398 
Income before income taxes$588,280 
For the three months ended June 29, 2025
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$2,085,468 $315,519 $213,731 $2,614,718 
Cost of sales1,274,772 194,534 148,412 
SM&A expense306,767 54,505 45,524 
Total segment income$503,929 $66,480 $19,795 $590,204 
Unallocated corporate expense (1)181,527 
Unallocated mark-to-market losses on commodity derivatives200,727 
Costs associated with business realignment activities (see Note 9)
15,139 
Operating profit$192,811 
Interest expense, net (see Note 4)
46,035 
Other (income) expense, net (see Note 17)
(2,336)
Income before income taxes$149,112 
(1)Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, (d) acquisition and integration-related costs, and (e) other gains or losses that are not integral to segment performance.
Our segment net sales and earnings for the six months ended June 28, 2026 and June 29, 2025 were as follows:
For the six months ended June 28, 2026
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$4,663,488 $737,915 $490,070 $5,891,473 
Cost of sales2,587,277 507,872 383,010 
SM&A expense578,048 133,163 96,946 
Total segment income$1,498,163 $96,880 $10,114 $1,605,157 
Unallocated corporate expense (1)372,828 
Unallocated mark-to-market gains on commodity derivatives(72,723)
Costs associated with business realignment activities (see Note 9)
21,718 
Operating profit$1,283,334 
Interest expense, net (see Note 4)
99,781 
Other (income) expense, net (see Note 17)
2,578 
Income before income taxes$1,180,975 
For the six months ended June 29, 2025
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$4,385,608 $593,317 $441,212 $5,420,137 
Cost of sales2,589,848 375,172 302,396 
SM&A expense595,457 109,812 90,295 
Total segment income$1,200,303 $108,333 $48,521 $1,357,157 
Unallocated corporate expense (1)341,952 
Unallocated mark-to-market losses on commodity derivatives412,181 
Costs associated with business realignment activities (see Note 9)
40,992 
Operating profit$562,032 
Interest expense, net (see Note 4)
90,657 
Other (income) expense, net (see Note 17)
(1,391)
Income before income taxes$472,766 
(1)Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, (d) acquisition and integration-related costs, and (e) other gains or losses that are not integral to segment performance.

Activity within the unallocated mark-to-market adjustment for commodity derivatives is as follows:
Three Months EndedSix Months Ended
June 28, 2026June 29, 2025June 28, 2026June 29, 2025
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income$(85,867)$31,545 $(56,958)$85,402 
Net (losses) gains on commodity derivative positions reclassified from unallocated to segment income (17,040)169,182 (15,765)326,779 
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses$(102,907)$200,727 $(72,723)$412,181 
As of June 28, 2026, the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $482,954. Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pre-tax gains on commodity derivatives of $283,942 to segment operating results in the next twelve months.
Depreciation and amortization expense included within segment income presented above is as follows:
Three Months EndedSix Months Ended
June 28, 2026June 29, 2025June 28, 2026June 29, 2025
North America Confectionery$80,358 $72,787 $157,875 $142,560 
North America Salty Snacks26,203 22,327 52,259 44,173 
International7,670 6,713 15,067 12,898 
Corporate21,864 22,006 43,896 43,766 
Total$136,095 $123,833 $269,097 $243,397 

Additional information regarding our net sales disaggregated by geographical region is as follows:
Three Months EndedSix Months Ended
June 28, 2026June 29, 2025June 28, 2026June 29, 2025
Net sales:
United States$2,438,474 $2,285,230 $5,149,947 $4,752,984 
All other countries348,832 329,488 741,526 667,153 
Total$2,787,306 $2,614,718 $5,891,473 $5,420,137