v3.26.3
SEGMENT INFORMATION
 9 Months Ended
Sep. 27, 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 September 27, 2026 and September 28, 2025 were as follows:
For the three months ended September 27, 2026
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$2,656,461 $392,683 $226,366 $3,275,510 
Cost of sales1,395,636 278,103 203,812 
SM&A expense311,138 67,192 52,562 
Total segment income (loss)$949,687 $47,388 $(30,008)$967,067 
Unallocated corporate expense (1)249,498 
Unallocated mark-to-market gains on commodity derivatives(113,352)
Costs associated with business realignment activities (see Note 9)
13,268 
Operating profit$817,653 
Interest expense, net (see Note 4)
48,675 
Other (income) expense, net (see Note 17)
975 
Income before income taxes$768,003 
For the three months ended September 28, 2025
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$2,615,600 $321,020 $244,798 $3,181,418 
Cost of sales1,752,225 206,267 209,843 
SM&A expense291,900 57,006 48,562 
Total segment income (loss)$571,475 $57,747 $(13,607)$615,615 
Unallocated corporate expense (1)194,705 
Unallocated mark-to-market gains on commodity derivatives(24,250)
Costs associated with business realignment activities (see Note 9)
10,577 
Operating profit$434,583 
Interest expense, net (see Note 4)
51,474 
Other (income) expense, net (see Note 17)
11,199 
Income before income taxes$371,910 
(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 nine months ended September 27, 2026 and September 28, 2025 were as follows:
For the nine months ended September 27, 2026
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$7,319,949 $1,130,598 $716,436 $9,166,983 
Cost of sales3,982,913 785,975 586,822 
SM&A expense889,185 200,355 149,508 
Total segment income (loss)$2,447,851 $144,268 $(19,894)$2,572,225 
Unallocated corporate expense (1)622,326 
Unallocated mark-to-market gains on commodity derivatives(186,075)
Costs associated with business realignment activities (see Note 9)
34,987 
Operating profit$2,100,987 
Interest expense, net (see Note 4)
148,456 
Other (income) expense, net (see Note 17)
3,553 
Income before income taxes$1,948,978 
For the nine months ended September 28, 2025
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$7,001,208 $914,337 $686,010 $8,601,555 
Cost of sales4,342,071 581,440 512,239 
SM&A expense887,357 166,817 138,857 
Total segment income$1,771,780 $166,080 $34,914 $1,972,774 
Unallocated corporate expense (1)536,659 
Unallocated mark-to-market losses on commodity derivatives387,932 
Costs associated with business realignment activities (see Note 9)
51,568 
Operating profit$996,615 
Interest expense, net (see Note 4)
142,131 
Other (income) expense, net (see Note 17)
9,808 
Income before income taxes$844,676 
(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 EndedNine Months Ended
September 27, 2026September 28, 2025September 27, 2026September 28, 2025
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income$(81,867)$(32,745)$(138,825)$52,657 
Net (losses) gains on commodity derivative positions reclassified from unallocated to segment income (31,485)8,495 (47,250)335,275 
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses$(113,352)$(24,250)$(186,075)$387,932 
As of September 27, 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 $596,307. 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 $410,510 to segment operating results in the next twelve months.
Depreciation and amortization expense included within segment income presented above is as follows:
Three Months EndedNine Months Ended
September 27, 2026September 28, 2025September 27, 2026September 28, 2025
North America Confectionery$80,050 $78,752 $237,925 $221,311 
North America Salty Snacks26,165 19,414 78,424 63,587 
International7,777 7,276 22,844 20,174 
Corporate22,282 22,342 66,178 66,108 
Total$136,274 $127,784 $405,371 $371,180 

Additional information regarding our net sales disaggregated by geographical region is as follows:
Three Months EndedNine Months Ended
September 27, 2026September 28, 2025September 27, 2026September 28, 2025
Net sales:
United States$2,905,223 $2,799,716 $8,055,170 $7,552,700 
All other countries370,287 381,702 1,111,813 1,048,855 
Total$3,275,510 $3,181,418 $9,166,983 $8,601,555