# Hershey Co: Form 10-Q for the period ended Sep 27, 2026

- Company: [Hershey Co](/companies/hsy.md) (CIK 47111)
- Form: 10-Q
- Filed: 2026-10-29
- Accepted by EDGAR: Oct 29, 2026, 13:45 ET
- Period: 2026-09-27
- Accession: 0001628280-26-068136
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/47111/000162828026068136/hsy-20260927.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/47111/000162828026068136/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-09-27.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-06-29 to 2026-09-27 | $3.28bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2026-01-01 to 2026-09-27 | $9.17bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-06-29 to 2026-09-27 | $1.76bn | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2026-01-01 to 2026-09-27 | $5.17bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2026-06-29 to 2026-09-27 | $1.51bn | us-gaap:GrossProfit |
| Gross profit | 9 months, 2026-01-01 to 2026-09-27 | $4.00bn | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2026-06-29 to 2026-09-27 | $692.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2026-01-01 to 2026-09-27 | $1.89bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-06-29 to 2026-09-27 | $817.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2026-01-01 to 2026-09-27 | $2.10bn | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2026-06-29 to 2026-09-27 | $53.2m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2026-01-01 to 2026-09-27 | $163.7m | us-gaap:InterestExpense |
| Income tax | 3 months, 2026-06-29 to 2026-09-27 | $187.2m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2026-01-01 to 2026-09-27 | $475.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-06-29 to 2026-09-27 | $580.8m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2026-01-01 to 2026-09-27 | $1.47bn | us-gaap:NetIncomeLoss |
| Operating cash flow | 9 months, 2026-01-01 to 2026-09-27 | $1.64bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2026-01-01 to 2026-09-27 | $305.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2026-01-01 to 2026-09-27 | $859.2m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2026-01-01 to 2026-09-27 | $439.4m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Current assets | at 2026-09-27 | $3.86bn | us-gaap:AssetsCurrent |
| Total assets | at 2026-09-27 | $13.89bn | us-gaap:Assets |
| Current liabilities | at 2026-09-27 | $3.12bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-09-27 | $9.02bn | us-gaap:Liabilities |
| Long-term debt | at 2026-09-27 | $4.49bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2026-09-27 | $197.8m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2026-09-27 | $436.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2026-09-27 | $4.88bn | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 51,321 characters.

This Management’s Discussion and Analysis (“MD&A”) is intended to provide an understanding of Hershey’s financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. This MD&A should be read in conjunction with our Unaudited Consolidated Financial Statements and accompanying notes included in this Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2026 (“this Quarterly Report on Form 10-Q”). This discussion contains a number of forward-looking statements, all of which are based on current expectations. Actual results may differ materially. Refer to the Safe Harbor Statement below as well as the Risk Factors and other information contained in our 2025 Annual Report on Form 10-K for information concerning the key risks to achieving future performance goals.

The MD&A is organized in the following sections:

- Overview
- Trends Affecting Our Business
- Consolidated Results of Operations
- Segment Results
- Liquidity and Capital Resources
- Safe Harbor Statement

### OVERVIEW

Hershey is a global confectionery leader known for making more moments of goodness through chocolate, sweets, mints and other great tasting snacks. We are the largest producer of quality chocolate in North America, a leading snack maker in the United States (“U.S.”) and a global leader in chocolate and non-chocolate confectionery. We market, sell and distribute our products under more than 85 brand names in approximately 65 countries worldwide.

Our principal product offerings include chocolate and non-chocolate confectionery products; gum and mint refreshment products and protein bars; pantry items, such as baking ingredients, toppings and beverages; and snack items such as spreads, bars, and snack bites and mixes, popcorn and pretzels.

### Business Acquisition

On November 18, 2025, we completed the acquisition of LesserEvil, LLC (“LesserEvil”), previously a privately held company that produces and sells organic popcorn and puffed snack products to retailers and distributors in the United States and Canada. The acquisition complements Hershey’s existing portfolio and increases manufacturing capacity.

### TRENDS AFFECTING OUR BUSINESS

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).

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.

As of September 27, 2026, we believe we have sufficient liquidity to satisfy our key strategic initiatives and other material cash requirements in both the short-term and in the long-term; however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can operate effectively during the current economic environment. We continue to monitor our discretionary spending across the organization (see Liquidity and Capital Resources included in this MD&A).

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.

### CONSOLIDATED RESULTS OF OPERATIONS

*In millions of dollars except per share amounts*

|  | Three Months Ended September 27, 2026 | September 28, 2025 | Percent Change | Nine Months Ended September 27, 2026 | September 28, 2025 | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $3,275.5 | $3,181.4 | 3.0% | $9,167.0 | $8,601.6 | 6.6% |
| Cost of sales | 1,764.5 | 2,144.1 | (17.7)% | 5,170.0 | 5,823.7 | (11.2)% |
| Gross profit | 1,511.0 | 1,037.3 | 45.7% | 3,997.0 | 2,777.9 | 43.9% |
| Gross margin | 46.1% | 32.6% |  | 43.6% | 32.3% |  |
| Selling, marketing & administrative (“SM&A”) expenses | 692.8 | 600.5 | 15.4% | 1,889.4 | 1,762.4 | 7.2% |
| SM&A expense as a percent of net sales | 21.2% | 18.9% |  | 20.6% | 20.5% |  |
| Business realignment activities | 0.5 | 2.2 | (77.2)% | 6.6 | 18.8 | (64.9)% |
| Operating profit | 817.7 | 434.6 | 88.1% | 2,101.0 | 996.6 | 110.8% |
| Operating profit margin | 25.0% | 13.7% |  | 22.9% | 11.6% |  |
| Interest expense, net | 48.7 | 51.5 | (5.4)% | 148.5 | 142.1 | 4.5% |
| Other (income) expense, net | 1.0 | 11.2 | (91.3)% | 3.6 | 9.8 | (63.8)% |
| Provision for income taxes | 187.2 | 95.6 | 95.8% | 475.3 | 281.4 | 68.9% |
| Effective income tax rate | 24.4% | 25.7% |  | 24.4% | 33.3% |  |
| Net income | $580.8 | $276.3 | 110.2% | $1,473.6 | $563.2 | 161.6% |
| Net income per share—diluted | $2.88 | $1.36 | 111.8% | $7.27 | $2.77 | 162.5% |
| NOTE: Percentage changes may not compute directly as shown due to rounding of amounts presented above. |  |  |  |  |  |  |
| NM = not meaningful |  |  |  |  |  |  |

### Results of Operations - Third Quarter 2026 vs. Third Quarter 2025

### Net Sales

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.

#### Key U.S. Marketplace Metrics

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.

The consumer takeaway and market share information reflect measured channels of distribution accounting for approximately 90% of our U.S. confectionery and salty snack retail businesses. These channels of distribution primarily include food, drug, mass merchandisers and convenience store channels, partial dollar, club and military channels. These metrics are based on measured market scanned purchases as reported by Circana, the Company’s market insights and analytics provider, and provide a means to assess our retail takeaway and market position relative to the overall category.

### Cost of Sales and Gross Margin

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.

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.

### SM&A Expenses

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.

### Business Realignment Activities

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.

### Operating Profit and Operating Profit Margin

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.

### Interest Expense, Net

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.

### Other (Income) Expense, Net

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.

### Income Taxes and Effective Tax Rate

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.

### Net Income and Earnings Per Share-diluted

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.

### Results of Operations - First Nine Months 2026 vs. First Nine Months 2025

### Net Sales

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.

#### Key U.S. Marketplace Metrics

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.

### Cost of Sales and Gross Margin

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.

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.

### SM&A Expenses

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.

### Business Realignment Activities

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.

### Operating Profit and Operating Profit Margin

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.

### Interest Expense, Net

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.

### Other (Income) Expense, Net

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.

### Income Taxes and Effective Tax Rate

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.

### Net Income and Earnings Per Share-diluted

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.

### SEGMENT RESULTS

The summary that follows provides a discussion of the results of operations of our three segments: North America Confectionery, North America Salty Snacks and International. For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources. 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 income are largely managed centrally at the corporate level and are excluded from the measure of segment income reviewed by our Chief Operating Decision Maker, Kirk Tanner, President and Chief Executive Officer. Segment income and segment income margin, which are presented in the segment discussion that follows, are non-GAAP measures and do not purport to be alternatives to operating income as a measure of operating performance. We believe that these measures are useful to investors and other users of our financial information in evaluating ongoing operating profitability as well as in evaluating operating performance in relation to our competitors, as they exclude the activities that are not directly attributable to our ongoing segment operations. Refer to Note 13 Segment Information in our unaudited consolidated financial statements for reconciliations of net sales for our reportable segments to consolidated total net sales and of segment operating income to consolidated income before taxes.

Our segment results, including a reconciliation to our consolidated results, were as follows:

*In millions of dollars*

| Net Sales: | Three Months Ended September 27, 2026 | September 28, 2025 | Nine Months Ended September 27, 2026 | September 28, 2025 |
| --- | ---: | ---: | ---: | ---: |
| North America Confectionery | $2,656.5 | $2,615.6 | $7,319.9 | $7,001.2 |
| North America Salty Snacks | 392.7 | 321.0 | 1,130.6 | 914.3 |
| International | 226.4 | 244.8 | 716.4 | 686.0 |
| Total | $3,275.5 | $3,181.4 | $9,167.0 | $8,601.6 |
| Segment Income (Loss): |  |  |  |  |
| North America Confectionery | $949.7 | $571.5 | $2,447.9 | $1,771.8 |
| North America Salty Snacks | 47.4 | 57.7 | 144.3 | 166.1 |
| International | (30.0) | (13.6) | (19.9) | 34.9 |
| Total segment income | 967.1 | 615.6 | 2,572.2 | 1,972.8 |
| Unallocated corporate expense (1) | 249.5 | 194.7 | 622.3 | 536.7 |
| Unallocated mark-to-market (gains) losses on commodity derivatives (2) | (113.4) | (24.3) | (186.1) | 387.9 |
| Costs associated with business realignment activities | 13.3 | 10.6 | 35.0 | 51.6 |
| Operating profit | 817.7 | 434.6 | 2,101.0 | 996.6 |
| Interest expense, net | 48.7 | 51.5 | 148.5 | 142.1 |
| Other (income) expense, net | 1.0 | 11.2 | 3.6 | 9.8 |
| Income before income taxes | $768.0 | $371.9 | $1,949.0 | $844.7 |

(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.

(2) Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains). See Note 13 to the Unaudited Consolidated Financial Statements.

### North America Confectionery

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:

*In millions of dollars*

|  | Three Months Ended September 27, 2026 | September 28, 2025 | Percent Change | Nine Months Ended September 27, 2026 | September 28, 2025 | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $2,656.5 | $2,615.6 | 1.6% | $7,319.9 | $7,001.2 | 4.6% |
| Segment income | 949.7 | 571.5 | 66.2% | 2,447.9 | 1,771.8 | 38.2% |
| Segment margin | 35.8% | 21.8% |  | 33.4% | 25.3% |  |
| NOTE: Percentage changes may not compute directly as shown due to rounding of amounts presented above. |  |  |  |  |  |  |

### Results of Operations - Third Quarter 2026 vs. Third Quarter 2025

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.

Our North America Confectionery segment income was $949.7 million in the third quarter of 2026 compared to $571.5 million in the same period of 2025, an increase of $378.2 million, or 66.2%. The increase was driven primarily by net price realization, lower net commodity costs, tariff refunds, and supply chain productivity and net savings related to our AAA Initiative, partially offset by lower volumes and higher advertising and related consumer marketing investments.

### Results of Operations - First Nine Months 2026 vs. First Nine Months 2025

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.

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.

### North America Salty Snacks

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:

*In millions of dollars*

|  | Three Months Ended September 27, 2026 | September 28, 2025 | Percent Change | Nine Months Ended September 27, 2026 | September 28, 2025 | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $392.7 | $321.0 | 22.3% | $1,130.6 | $914.3 | 23.7% |
| Segment income | 47.4 | 57.7 | (17.9)% | 144.3 | 166.1 | (13.1)% |
| Segment margin | 12.1% | 18.0% |  | 12.8% | 18.2% |  |
| NOTE: Percentage changes may not compute directly as shown due to rounding of amounts presented above. |  |  |  |  |  |  |

### Results of Operations - Third Quarter 2026 vs. Third Quarter 2025

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 Pretzel*s. Price realization increased approximately 1% primarily driven by *Dot’s Homestyle Pretzels* and *SkinnyPop.*

Our North America Salty Snacks segment income was $47.4 million in the third quarter of 2026 compared to $57.7 million in the same period of 2025, a decrease of $10.4 million, or 17.9%. The decrease was driven by higher supply chain costs, increased net commodity costs and higher consumer marketing costs.

### Results of Operations - First Nine Months 2026 vs. First Nine Months 2025

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 *SkinnyPop* and *Pirates Booty.*

Our North America Salty Snacks segment income was $144.3 million in the first nine months of 2026 compared to $166.1 million in the 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.

### International

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:

*In millions of dollars*

|  | Three Months Ended September 27, 2026 | September 28, 2025 | Percent Change | Nine Months Ended September 27, 2026 | September 28, 2025 | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | $226.4 | $244.8 | (7.5)% | $716.4 | $686.0 | 4.4% |
| Segment (loss) income | (30.0) | (13.6) | 120.5% | (19.9) | 34.9 | (157.0)% |
| Segment margin | (13.3)% | (5.6)% |  | (2.8)% | 5.1% |  |
| NOTE: Percentage changes may not compute directly as shown due to rounding of amounts presented above. |  |  |  |  |  |  |

### Results of Operations - Third Quarter 2026 vs. Third Quarter 2025

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%.

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.

### Results of Operations - First Nine Months 2026 vs. First Nine Months 2025

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.

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.

### Unallocated Corporate Expense

Unallocated corporate expense 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.

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.

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 driven by continued investments in technology and higher acquisition and integration costs, partially offset by lower compensation and benefits costs.

### LIQUIDITY AND CAPITAL RESOURCES

Historically, our primary source of liquidity has been cash generated from operations. Domestic seasonal working capital needs, which typically peak during the summer months, are generally met by utilizing cash on hand, bank borrowings or the issuance of commercial paper. Commercial paper may also be issued, from time to time, to finance ongoing business transactions, such as the repayment of long-term debt, business acquisitions and for other general corporate purposes.

At September 27, 2026, our cash and cash equivalents totaled $676.7 million, a decrease of $249.2 million compared to the 2025 year-end balance. Additional detail regarding the net uses of cash are outlined in the following discussion. Additionally, at September 27, 2026, we had outstanding short- and long-term debt totaling $5.1 billion, of which $197.8 million was classified as the current portion of long-term debt. Of the $197.8 million, $193.6 million represents the aggregate principal amount of our 7.200% Debentures due upon maturity on August 15, 2027. We believe we can satisfy these debt obligations with cash generated from our operations, issuing new debt, and/or by borrowing on our unsecured credit facility.

A substantial majority of our cash and cash equivalents at September 27, 2026 was held by subsidiaries domiciled outside of the United States. A majority of our cash and cash equivalents balance is distributable to the United States without material tax implications, such as withholding tax. We intend to continue to reinvest the remainder of this balance outside of the United States for which there would be a material tax implication to distributing for the foreseeable future and, therefore, have not recognized additional tax expense on these earnings. We believe that our existing sources of liquidity are adequate to meet anticipated funding needs at comparable risk-based interest rates for the foreseeable future. Acquisition spending and/or share repurchases could potentially increase our debt. Operating cash flow and access to capital markets are expected to satisfy our various short- and long-term cash flow requirements, including acquisitions and capital expenditures.

### Cash Flow Summary

The following table is derived from our Consolidated Statements of Cash Flows:

*In millions of dollars*

| Net cash provided by (used in): | Nine Months Ended September 27, 2026 | September 28, 2025 |
| --- | ---: | ---: |
| Operating activities | 1,638.8 | 1,350.8 |
| Investing activities | (294.1) | (382.2) |
| Financing activities | (1,600.8) | (536.4) |
| Effect of exchange rate changes on cash and cash equivalents | 6.9 | 0.1 |
| Net change in cash and cash equivalents | $(249.2) | $432.3 |

### Operating activities

We generated cash of $1,638.8 million from operating activities in the first nine months of 2026, an increase of $288.0 million compared to $1,350.8 million in the same period of 2025. This increase in net cash provided by operating activities was mainly driven by the following factors:

- Net income adjusted for non-cash charges to operations (including depreciation, amortization, stock-based compensation, deferred income taxes, unrealized gains and losses on derivative contracts, contingent consideration adjustments and other charges) resulted in $486.2 million of higher cash flow in 2026 relative to 2025.
- Other assets and liabilities consumed cash of $31.1 million in 2026, compared to $287.1 million in 2025. This $255.9 million fluctuation was primarily driven by the timing of certain prepaid expenses and other current assets.
- The variance in operating cash flows related to income taxes reflects timing differences between actual tax expense and quarterly estimated tax payments. We paid cash of $403.9 million for income taxes during 2026, compared to $110.6 million in the same period of 2025.
- The increase in cash provided by operating activities was partially offset by the following net cash outflows:
- In the aggregate, select net working capital items, specifically, trade accounts receivable, inventory, accounts payable and accrued liabilities, consumed cash of $428.7 million in 2026, compared to consuming cash of $148.4 million in 2025. This $280.3 million fluctuation was mainly driven by an increase in trade accounts receivable, as a result of timing of sales and collections, partially offset by a decrease in accounts payable and accrued liabilities, due to the timing of vendor and supplier payments, and lower inventory levels.

### Investing activities

We used cash of $294.1 million for investing activities in the first nine months of 2026, a decrease of $88.1 million compared to $382.2 million in the same period of 2025. This decrease in net cash used in investing activities was mainly driven by the following factors:

- *Capital spending*. Capital expenditures, including capitalized software, capacity expansion, innovation and cost savings, were $305.0 million in the first nine months of 2026 compared to $316.5 million in the same period of 2025. The decrease in our 2026 capital expenditures is largely driven by the wind down of our key strategic initiatives, as we expect 2026 capital expenditures, including capitalized software, to be in the range of approximately $425 million to $475 million, reflecting a trend towards historical levels. We intend to use our existing cash and internally generated funds to meet our 2026 capital requirements.
- *Investments in partnerships qualifying for tax credits*. We make investments in partnership entities that in turn make equity investments in projects eligible to receive federal historic and renewable energy tax credits. We received payments of approximately $14.4 million in the first nine months of 2026, which is consistent with the same period of 2025 of approximately $14.3 million.
- *Intangible assets*. We had no purchases of intangible assets in 2026. In 2025, we purchased the Fulfil brand in North America for $73.6 million.
- *Other investing activities*. In the first nine months of 2026 and 2025, our other investing activities were minimal.

### Financing activities

We used cash of $1,600.8 million for financing activities in the first nine months of 2026, an increase of $1,064.4 million compared to $536.4 million in the same period of 2025. This increase in net cash used in financing activities was mainly driven by the following factors:

- *Short-term borrowings, net.* In addition to utilizing cash on hand, we use short-term borrowings (commercial paper and bank borrowings) to fund seasonal working capital requirements and ongoing business needs. During the first nine months of 2026, we generated cash of $220.4 million predominately through the issuance of short-term commercial paper, partially offset by a decrease in short-term foreign bank borrowings. During the first nine months of 2025, we used cash of $1.1 billion predominately to reduce outstanding short-term commercial paper borrowings.
- *Long-term debt borrowings and repayments*. During the first nine months of 2026, we repaid $500 million of 2.300% Notes due in August 2026. We had no long-term borrowings during the first nine months of 2026. During the first nine months of 2025, we issued $500 million of 4.550% Notes due in February 2028, $500 million of 4.750% Notes due in February 2030, $500 million of 4.950% Notes due in February 2032 and $500 million of 5.100% Notes due in February 2035 (together, the “2025 Notes”). Proceeds from the issuance of the 2025 Notes, net of discounts and issuance costs, totaled $2.0 billion. Additionally, we repaid $300 million of 0.900% Notes due upon maturity and $300 million of 3.200% Notes due upon maturity in June and August 2025, respectively.
- *Dividend payments*. Total dividend payments to holders of our Common Stock and Class B Common Stock were $859.2 million during the first nine months of 2026, an increase of $45.3 million compared to $814.0 million in the same period of 2025. Details regarding our 2026 cash dividends paid to stockholders are as follows:

*In millions of dollars except per share amounts*

|  | Quarter Ended March 29, 2026 | June 28, 2026 | September 27, 2026 |
| --- | ---: | ---: | ---: |
| Dividends paid per share – Common stock | $1.452 | $1.452 | $1.452 |
| Dividends paid per share – Class B common stock | $1.320 | $1.320 | $1.320 |
| Total cash dividends paid | $288.0 | $286.4 | $284.8 |
| Declaration date | February 4, 2026 | April 29, 2026 | July 29, 2026 |
| Record date | February 17, 2026 | May 15, 2026 | August 14, 2026 |
| Payment date | March 16, 2026 | June 15, 2026 | September 15, 2026 |

- *Share repurchases*. We repurchase shares of Common Stock to offset the dilutive impact of treasury shares issued under our equity compensation plans. The value of these share repurchases in a given period varies based on the volume of stock options exercised and our market price. In addition, we periodically repurchase shares of Common Stock pursuant to Board-authorized programs intended to drive additional stockholder value. Details regarding our share repurchases are as follows:

*In millions*

|  | Nine Months Ended September 27, 2026 | September 28, 2025 |
| --- | ---: | ---: |
| Shares repurchased in the open market under pre-approved share repurchase programs (1) | $200.0 | $— |
| Shares repurchased in the open market to replace Treasury Stock issued for stock options and incentive compensation | 239.4 | — |
| Cash used for total share repurchases (excluding excise tax) | $439.4 | $— |
| Total shares repurchased under pre-approved share repurchase programs | 1.0 | — |

(1) In December 2023, our Board of Directors approved a $500 million share repurchase authorization. As a result of the share repurchase authorization, approximately $270 million remains available for repurchases under our December 2023 share repurchase authorization. In June 2026, our Board of Directors approved an additional $500 million share repurchase authorization. This program is to commence after the existing 2023 authorization is completed and is to be utilized at management’s discretion. We are authorized to purchase our outstanding shares in open market and privately negotiated transactions. The program has no expiration date and acquired shares of Common Stock will be held as treasury shares. Purchases under approved share repurchase authorizations are in addition to our practice of buying back shares sufficient to offset those issued under incentive compensation plans.

- *Proceeds from exercised stock options and employee tax withholding.* During the first nine months of 2026, we received $16.9 million from employee exercises of stock options and paid $18.2 million of employee taxes withheld from share-based awards. During the first nine months of 2025, we received $17.3 million from employee exercises of stock options and paid $17.2 million of employee taxes withheld from share-based awards. Variances are driven primarily by the number of shares exercised and the share price at the date of grant.
- *Contingent consideration paid.* During the first nine months of 2026, we paid $16.6 million of contingent consideration related to previous business combination activity. During the first nine months of 2025, there was no contingent consideration paid.

### Recent Accounting Pronouncements

Information on recently adopted and issued accounting standards is included in Note 1 to the Unaudited Consolidated Financial Statements.

### Critical Accounting Estimates

For information regarding the Company’s critical accounting estimates, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report on Form 10-K. There have been no material changes to the Company’s critical accounting estimates since December 31, 2025.

### Safe Harbor Statement

We are subject to changing economic, competitive, regulatory and technological risks and uncertainties that could have a material impact on our business, financial condition or results of operations. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we note the following factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions that we have discussed directly or implied in this Quarterly Report on Form 10-Q. Many of these forward-looking statements can be identified by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would,” among others.

The factors that could cause our actual results to differ materially from the results projected in our forward-looking statements include, but are not limited to the following:

- Our Company’s reputation or brand image might be impacted as a result of issues, concerns or regulatory changes relating to the quality and safety of our products, ingredients or packaging, human and workplace rights, and other environmental, social or governance matters, which in turn could result in litigation or otherwise negatively impact our operating results;
- Disruption to our manufacturing operations or supply chain could impair our ability to produce or deliver finished products, resulting in a negative impact on our operating results;
- We might not be able to hire, engage and retain the talented global human capital we need to drive our growth strategies;
- Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, stockholders and other stakeholders on climate change issues, could negatively affect our business and operations;
- Increases in raw material and energy costs along with the availability of adequate supplies of raw materials could continue to affect future financial results;
- Price increases may not be sufficient to offset cost increases and maintain profitability or may result in sales volume declines associated with pricing elasticity;
- Market demand for new and existing products could decline;
- Increased marketplace competition could hurt our business;
- Our financial results may be adversely impacted by the failure to successfully execute or integrate acquisitions, divestitures and joint ventures;
- Our international operations may not achieve projected growth objectives, which could adversely impact our overall business and results of operations;
- We may not fully realize the expected cost savings and/or operating efficiencies associated with our strategic initiatives or restructuring programs, which may have an adverse impact on our business;
- Changes in governmental laws, regulations and policies, including taxes and tariffs, could increase our costs and liabilities or impact demand for our products;
- Political, economic and/or financial market conditions, including impacts on our business arising from the ongoing conflict in the Middle East, could negatively impact our financial results;
- Disruptions, failures or security breaches of our information technology infrastructure could have a negative impact on our operations and financial results;
- Complications with the design or implementation of our enterprise resource planning system could adversely impact our business and operations; and
- Such other matters as discussed in our 2025 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q for the quarters ended March 29, 2026 and June 28, 2026, and this Quarterly Report on Form 10-Q, including Part II, Item 1A, “Risk Factors.”

We undertake no obligation to publicly update or revise any forward-looking statements to reflect actual results, changes in expectations or events or circumstances after the date this Quarterly Report on Form 10-Q is filed.

## Market risk

As filed, 5,152 characters.

### Interest Rate Risk

The total amount of short-term debt, net of cash, resulted in a net cash position of $241 million and $707 million, at September 27, 2026 and December 31, 2025, respectively. A hypothetical 100 basis point increase in interest rates applied to this variable-rate short-term debt as of September 27, 2026 would have changed interest expense by approximately $3.3 million for the first nine months of 2026 and $7.7 million for 2025.

We consider our current risk related to market fluctuations in interest rates on our remaining debt portfolio, excluding fixed-rate debt converted to variable rates with fixed-to-floating instruments, to be minimal since this debt is largely long-term and fixed-rate in nature. Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. A 100 basis point increase in market interest rates would decrease the fair value of our fixed-rate long-term debt at September 27, 2026 and December 31, 2025 by approximately $210 million and $236 million, respectively. However, since we currently have no plans to repurchase our outstanding fixed-rate instruments before their maturities, the impact of market interest rate fluctuations on our long-term debt does not affect our results of operations or financial position.

### Foreign Currency Exchange Rate Risk

We are exposed to currency fluctuations related to manufacturing or selling products in currencies other than the U.S. dollar. We may enter into foreign currency forward exchange contracts to reduce fluctuations in our long or short currency positions relating primarily to purchase commitments or forecasted purchases for equipment, raw materials and finished goods denominated in foreign currencies.

The fair value of foreign currency forward exchange contracts represents the difference between the contracted and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. The potential decline in fair value of foreign currency forward exchange contracts resulting from a hypothetical near-term adverse change in market rates of 10% was $31.5 million as of September 27, 2026 and $38.7 million as of December 31, 2025, generally offset by a reduction in foreign exchange associated with our transactional activities.

### Commodities—Price Risk Management and Derivative Contracts

We use futures and options contracts and other commodity derivative instruments in combination with forward purchasing of cocoa products, sugar, corn products, certain dairy products, wheat products, natural gas and diesel fuel primarily to mitigate price volatility and provide visibility to future costs within our supply chain. Significant changes impacting our commodity price risk management since our 2025 Annual Report on Form 10-K are described below.

#### Cocoa Products

During the first nine months of 2026, the average cocoa futures contract price was $2.08 per pound, with a trading range of $1.48 to $2.72 per pound, based on the Intercontinental Exchange futures contract. This average cocoa futures contract price represents a decline of approximately 43% compared to the 2025 annual average of $3.65 per pound.

The cocoa supply-demand outlook as of September 2026 shows that the 2025 – 2026 season is likely to end with a historically large surplus. For the 2026 – 2027 season, the outlook remains broadly balanced, with some analysts projecting a deficit and others projecting a small surplus. While demand has declined over the past three years, some analysts predict a slight recovery in the upcoming season. Activity on the two major futures exchanges has also improved during the quarter, with trading volumes approaching more normal levels following considerable declines in 2024 and 2025.

Our costs for cocoa products will not necessarily reflect market price fluctuations because of our forward purchasing and hedging practices (including amount and duration thereof), premiums and discounts reflective of varying delivery times, and supply and demand for our specific varieties and grades of cocoa liquor, cocoa butter and cocoa powder. We generally hedge commodity price risks for 3- to 24-month periods. As a result, the average market prices are not necessarily indicative of our average costs.

#### Commodity Sensitivity Analysis

Our open commodity derivative contracts had a notional value of $646.0 million as of September 27, 2026 and $973.1 million as of December 31, 2025. At the end of the third quarter of 2026, the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have decreased our net unrealized losses by $51.0 million, generally offset by a reduction in the cost of the underlying commodity purchases.

For additional information about our market risks, see Item 7A under Part II of our 2025 Annual Report on Form 10-K.

## Controls and procedures

As filed, 1,383 characters.

### Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 27, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 27, 2026.

### Changes in Internal Controls Over Financial Reporting

There have been no changes to the Company’s internal control over financial reporting during the quarter ended September 27, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 358 characters.

When evaluating an investment in our Common Stock, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A, “Risk Factors,” of our 2025 Annual Report on Form 10-K and the information contained in this Quarterly Report on Form 10-Q and our other reports and registration statements filed with the SEC.

Filed Oct 29, 2026.
Source: SEC EDGAR, the filing index for accession 0001628280-26-068136. Last ingested by Listed: Oct 29, 2026, 13:52 ET. No prices; not investment advice.