Which Gives You More Of A Profit Rebound, Mondelez Or Hershey?
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Investors buy Mondelez International (MDLZ) and Hershey (HSY) for the same reason: packaged food profits that are climbing back. Each company’s operating margin over the past twelve months beat the prior year, though both still trail their levels from two years earlier. You get the same recovery through two very different businesses: Mondelez generates more than three times Hershey’s revenue. What did each company tell investors about its rebound on October 29?
Hershey Raised Its 2026 Earnings Outlook, Mondelez Held
Hershey now expects adjusted earnings per share to grow 36% to 38.5% in fiscal 2026. That lifts the midpoint to 37.25%, from 33.75% in its July release. Yet Hershey also cut its organic net sales growth guide to about 3.0%, from 3.25%, even as its net sales growth guide rose to about 5.0%, from 4.75%. So the higher profit outlook came with a lower organic sales outlook.
Mondelez kept its fiscal 2026 targets for organic revenue, adjusted earnings and free cash flow unchanged from July, including organic revenue growth of at least 2.0%. Management said biscuits and chocolate are holding up well across emerging markets, and that Mondelez has added about 130,000 outlets in India so far in 2026. Management also said it will reinvest any upside back into the business. The two updates differ in kind: Hershey gave investors a larger profit forecast, while Mondelez provided a steady one and appears to be spending any extra on growth.
How Debt And Costs Compare At Both Companies
Mondelez owed $22.3 billion at the end of September 2026, compared with $3.66 billion of free cash flow over the past twelve months. At that pace, paying the debt off from cash flow alone would take about six years. Hershey owed $5.43 billion at the end of its September quarter, compared with $2.12 billion of free cash flow over its past twelve months. Clearing Hershey’s debt with that cash would take less than three years.
Mondelez’s cocoa costs have eased. Its reported gross margin was 39.4% in fiscal Q3 2026, up from 26.8% in fiscal Q3 2025, though that figure includes items left out of adjusted results. On the October 29 call, management said strong volume growth, its productivity program and low cocoa costs drove gross profit in the quarter. It also said it is seeing inflation in dairy, oil and packaging. Hershey, for its part, expects $100 million of savings in fiscal 2026 from its Advancing Agility & Automation Initiative. Hershey’s reported gross margin rose to 46.1% in fiscal Q3 2026, from 32.6% a year earlier.
Where Hershey Leads Mondelez, And Where It Trails
You pay less for Hershey’s earnings, as the stock trades at 19.8 times the past twelve months, compared with 20.9 times for Mondelez. Hershey also keeps more of each sale, posting an operating margin of 20.8% against 14.2% at Mondelez. Hershey owes less as well, carrying debt equal to 15.3% of its market value, compared with 26.2% at Mondelez.
Hershey is also ahead on recent growth. Its revenue rose 6.7% over its latest twelve months, compared with 6.0% at Mondelez.
Mondelez wins on longer-run growth and steadiness. Its revenue growth averaged 4.1% across the last three twelve-month periods, against 3.2% for Hershey. Hershey’s sales shrank 1.7% in the twelve months ended September 2024, while Mondelez’s grew in each of the three periods. Mondelez is also the cheaper stock per dollar of sales, at 2.1 times against 2.9 times for Hershey.
On these measures, Hershey offers more of the profit rebound at a lower price on earnings, while Mondelez has the steadier sales record. Mondelez targets adjusted earnings per share growth of 0% to 5% at constant currency in fiscal 2026. Hershey expects 36% to 38.5%, a range it does not state at constant currency. Hershey’s organic sales growth, the one sales target it cut, is the measure to watch in its report expected in February 2027.
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