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Interest Rate Risk
−Removed: The total amount of short-term debt, net of cash, amounted to a net cash position of $948 million and a net debt position of $576 million, at September 28, 2025 and December 31, 2024, respectively.
−Removed: A hypothetical 100 basis point increase in interest rates applied to this variable-rate short-term debt as of September 28, 2025 would have changed interest income by approximately $7.7 million for the first nine months of 2025 versus a change to interest expense of $7.0 million for 2024.
+Added: The total amount of short-term debt, net of cash, amounted to net cash of $708 million and $707 million, at March 29, 2026 and December 31, 2025, respectively.
+Added: A hypothetical 100 basis point increase in interest rates applied to this variable-rate short-term debt as of March 29, 2026 would have changed interest expense by approximately $1.8 million for the first three months of 2026 and $3.4 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.
−Removed: A 100 basis point increase in market interest rates would decrease the fair value of our fixed-rate long-term debt at September 28, 2025 and December 31, 2024 by approximately $273 million and $169 million, respectively.
+Added: A 100 basis point increase in market interest rates would decrease the fair value of our fixed-rate long-term debt at March 29, 2026 and December 31, 2025 by approximately $233 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.
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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.
−Removed: 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 $16.5 million as of September 28, 2025 and $32.3 million as of December 31, 2024, generally offset by a reduction in foreign exchange associated with our transactional activities.
+Added: 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 $31.6 million as of March 29, 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
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Significant changes impacting our commodity price risk management since our 2025 Annual Report on Form 10-K are described below.
−Removed: The Hershey Company | Q3 2025 Form 10-Q | Page 46
Cocoa Products
−Removed: During the first nine months of 2025, the average cocoa futures contract price was $3.97 per pound, with a trading range of $3.30 to $4.89 per pound, based on the Intercontinental Exchange futures contract.
−Removed: This average cocoa futures contract price represents an increase of approximately 15% compared to the 2024 annual average of $3.45 per pound.
−Removed: The cocoa supply-demand outlook continues to show improved signs for the 2024/25 season following three consecutive seasons of supply deficit.
−Removed: Supply has benefited from a combination of more favorable weather conditions in Côte d’Ivoire and Ghana and the ongoing expansion of supply in the rest of the world, specifically Ecuador, which is supplying approximately 35% more cocoa than in the previous season.
−Removed: Demand for cocoa beans has been negatively impacted by high prices over the last two years and this season’s grind is expected to be 2% lower than the previous season.
−Removed: Despite recent pullback of future contracts across the board, the outlook for cocoa prices remains uncertain due to significant liquidity and volatility events in the market, which may have an impact on our financial condition and results of operations.
+Added: During the first three months of 2026, the average cocoa futures contract price was $1.86 per pound, with a trading range of $1.29 to $2.86 per pound, based on the Intercontinental Exchange futures contract.
+Added: This average cocoa futures contract price represents a decline of approximately 49% compared to the 2025 annual average of $3.64 per pound.
+Added: The Hershey Company | Q1 2026 Form 10-Q | Page 40
+Added: The cocoa supply-demand outlook has improved substantially in the first three months of 2026.
+Added: After three years of deficit, the 2024-2025 season finished with a supply surplus.
+Added: In addition, the outlook for the 2025-2026 season is very positive, with a large surplus predicted by most analysts.
+Added: Output in all major regions is forecast to grow, including Côte d’Ivoire and Ghana, while demand has now contracted for 11 consecutive quarters according to published quarterly reports.
+Added: Activity on the two major futures exchanges has also improved during the quarter, with trading volumes approaching more normal levels following considerable declines during the previous two years.
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.
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Commodity Sensitivity Analysis
−Removed: Our open commodity derivative contracts had a notional value of $591.8 million as of September 28, 2025 and $667.4 million as of December 31, 2024.
−Removed: At the end of the third quarter of 2025, the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have increased our net unrealized losses by $25.8 million, generally offset by a reduction in the cost of the underlying commodity purchases.
+Added: Our open commodity derivative contracts had a notional value of $925.2 million as of March 29, 2026 and $667.4 million as of December 31, 2025.
+Added: At the end of the first 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 $32.5 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.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.