Hershey's Cocoa Cost Relief May Finally Show Up in the Numbers—If Volumes Cooperate

The Hershey Company reports first-quarter 2026 earnings before the market opens on April 30, with Wall Street expecting the confectionery giant to deliver $2.05 per share on revenue of $3.03 billion. After four consecutive quarters of double-digit earnings surprises, investors will be watching whether Hershey can sustain its momentum amid easing cocoa cost pressures and evolving consumer demand patterns. The report comes as analyst sentiment has deteriorated and the stock trades below most key moving averages, setting up a critical test for management's ability to balance pricing power with volume growth.

Part 1: Earnings Preview

The Hershey Company is a leading North American manufacturer of chocolate, confectionery, and pantry goods, with iconic brands including Hershey's, Reese's, Kisses, and a growing portfolio of salty snacks like SkinnyPop and Dot's Pretzels. The company operates across retail, e-commerce, and foodservice channels, serving both U.S. and international consumers in the highly competitive snack and sweets market.

Hershey is scheduled to report Q1 2026 results before the market opens on April 30, with analysts expecting earnings of $2.05 per share on revenue of $3.03 billion. The company most recently reported Q4 2025 earnings of $1.71 per share, marking its fourth consecutive quarter of substantial beats. The consensus estimate represents a 1.91% decline from the $2.09 per share reported in Q1 2025, reflecting tougher year-over-year comparisons despite an expected 8% revenue increase.

Three key themes define this earnings story. Cocoa cost normalization stands at the forefront—after cocoa prices crashed 74% from their 2025 peaks, investors are watching whether Hershey's profit margins can finally catch up to the commodity relief, as the P&L typically lags spot price movements by several quarters. Volume versus pricing dynamics will be critical, as management must demonstrate whether recent sales growth stems from sustainable volume gains or continued price increases that risk alienating consumers. Finally, salty snacks expansion remains a strategic priority, with brands like SkinnyPop and Dot's Pretzels increasingly relevant for diversification and margin expansion beyond the core chocolate business.

Morgan Stanley recently cut its price target on Hershey, citing higher oil and commodity pressures that could offset some of the cocoa relief. However, the consensus among 24 analysts remains cautiously optimistic, with a mean price target of $223.62 implying 18% upside from current levels. Analysts are particularly focused on management commentary around input cost inflation, supply chain resilience, brand investment levels, and the trajectory of market share in core chocolate and sweets categories.

Part 2: Historical Earnings Performance

Hershey has established a remarkable pattern of exceeding Wall Street expectations, beating consensus estimates in each of the past four quarters by substantial margins. The company delivered surprises of 7.73%, 19.80%, 19.27%, and 22.14% across Q1 through Q4 2025, respectively, with the magnitude of beats accelerating as the year progressed. Most recently, Hershey reported $1.71 per share for Q4 2025 against a $1.40 estimate, representing a $0.31 beat—the largest absolute surprise in the four-quarter sequence.

This consistent outperformance reflects management's ability to navigate volatile input costs while maintaining pricing discipline and operational efficiency. The earnings trajectory shows sequential improvement from $2.09 in Q1 2025 to $1.21 in Q2 (a seasonally weaker quarter), then $1.30 in Q3, and finally $1.71 in Q4. The pattern suggests Hershey has successfully managed through what were likely conservative analyst estimates, particularly in the back half of 2025 when cocoa cost pressures were most acute. With estimates calling for a slight year-over-year decline to $2.05 for Q1 2026, the question is whether this string of beats can continue or if analysts have finally recalibrated their models to reflect the company's improved execution.

Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.

Part 2.1: Price Behavior Around Earnings

Hershey typically reports earnings before the market opens, meaning Day 0 represents the first full trading session where investors react to results, while Day +1 captures follow-through momentum.

Historical price behavior reveals that Hershey tends to generate meaningful volatility around earnings, with an average absolute Day 0 move of 2.70% and Day 0 range of 4.64%. The most recent Q4 2025 report on February 5, 2026, produced the strongest reaction in the dataset, with a 9.03% Day 0 surge following the 22.14% earnings beat. Prior quarters showed more modest Day 0 moves ranging from 0.04% to 4.40%, though intraday ranges consistently exceeded 3.80%.

Day +1 follow-through has been more subdued, averaging 1.51% with a 2.89% range, suggesting most of the price discovery occurs in the immediate session following results. Notably, the direction of Day 0 and Day +1 moves has not always aligned—the May 2025 report saw a flat Day 0 followed by a 2.26% decline on Day +1, while the November 2024 report reversed a 2.25% Day 0 drop with a 1.63% Day +1 gain. Investors should anticipate a 2–3% initial move with potential for follow-through depending on the quality of the beat and management's forward guidance.

Part 2.2: Options Market Expected Move

The options market is pricing a 3.43% expected move through the May 1 weekly expiration, implying a range of $182.67 to $195.65. This sits above the 2.70% average absolute Day 0 move but below the 4.64% average Day 0 range observed historically, suggesting options traders are positioning for moderate volatility that falls between typical initial moves and intraday swings. The 69.47% average implied volatility reflects elevated uncertainty heading into the print.

Part 3: What Analysts Are Saying

Analyst sentiment on Hershey has deteriorated heading into the Q1 report, with the average recommendation standing at 3.29 on the five-point scale—firmly in Hold territory. The consensus has weakened from 3.39 one month ago, reflecting growing caution among Wall Street firms. Of the 24 analysts covering the stock, 4 rate it a Strong Buy, 1 a Moderate Buy, 18 a Hold, and 1 a Strong Sell. Notably, the number of Hold ratings increased from 16 to 18 over the past month, while Strong Buy ratings declined from 5 to 4.

The mean price target of $223.62 implies 18.2% upside from the current price of $189.16, with estimates ranging from a low of $166.00 to a high of $260.00. This wide dispersion reflects divergent views on how quickly Hershey can translate lower cocoa costs into margin expansion and whether the company can sustain volume growth without sacrificing pricing power. The deteriorating sentiment trend suggests analysts are taking a more cautious stance, possibly due to concerns about commodity cost timing, competitive pressures, or macroeconomic headwinds affecting consumer spending on discretionary snack categories.

Part 4: Technical Picture

Hershey's technical setup heading into earnings has weakened considerably, with the Barchart Technical Opinion registering a 24% Sell signal—unchanged from last week but a sharp reversal from the 56% Buy signal that prevailed just one month ago. This deterioration reflects mounting technical pressure as the stock has failed to hold key support levels.

Timeframe Analysis:

• Short-term (50% Sell): Moderate sell signal indicates near-term momentum has turned negative, suggesting recent price action favors bears
• Medium-term (50% Buy): Moderate buy signal suggests the intermediate trend remains constructive despite short-term weakness, indicating potential support on longer timeframes
• Long-term (50% Sell): Moderate sell signal reflects underlying weakness in the broader trend structure, pointing to deteriorating long-term momentum

Trend Characteristics: The trend is showing minimum strength with a weakening direction, indicating fragile technical conditions and limited conviction in either direction as earnings approach.

The stock is trading at $189.16, positioned below all major moving averages except the 200-day at $192.98. Hershey sits below its 5-day ($189.43), 10-day ($189.99), 20-day ($196.66), 50-day ($211.21), and 100-day ($202.91) moving averages, with the 50-day representing the most significant overhead resistance at 10.4% above current levels.

The technical picture presents a cautionary setup for earnings, with the stock trapped below a cluster of resistance levels and lacking clear directional conviction. The 200-day moving average at $192.98 represents the nearest meaningful resistance, while the 50-day at $211.21 marks a more substantial ceiling that would require a significant earnings beat to reclaim. The weakening Barchart Opinion and positioning below most moving averages suggest limited technical support heading into the print, meaning a strong fundamental catalyst will be needed to reverse the recent downtrend. Conversely, any disappointment could accelerate selling pressure given the already fragile technical foundation.