As Halloween approaches, the festive season presents both opportunities and challenges for retailers. Consumers remain eager to celebrate, but persistent inflationary pressures and higher everyday expenses may be limiting their spending power. While several Halloween-related companies are demonstrating resilience through revenue growth and strong LSEG StarMine model scores, uncertainty surrounding consumer spending continues to cloud the earnings outlook.
Against this backdrop, retailers appear to be adopting more disciplined promotional strategies to protect margins while sustaining demand for costumes and decorations. Discount penetration for Halloween costumes and accessories has fallen sharply to 56% from 83% last year, while the average discount declined to 15%, its lowest level since 2022 and well below last year’s 36%. Together, these trends suggest retailers are relying less on aggressive markdowns, potentially reflecting tighter inventory management and a greater emphasis on preserving profitability.
Trick or Treat: Candy makers face a Halloween test
Consumers may be spooked by higher gasoline and candy prices this Halloween, but that isn’t stopping them from embracing the festivities. Candy makers are refreshing their seasonal offerings to capture consumer spending, with Mondelez International capitalizing on the buzz surrounding Halloween-themed Oreos and Hershey expanding its seasonal lineup. The question is whether these strategies will translate into stronger sales and profitability.
Both Hershey and Mondelez International reported stronger quarterly earnings during the period encompassing Halloween shipments. During its third-quarter earnings call, Hershey highlighted increased seasonal shipments, strong retail partnerships and the importance of last-minute purchases. Management noted that larger trick-or-treat packs are particularly advantageous for the company, as consumers increasingly gravitate toward these formats in the final days leading up to Halloween. While consumer participation intentions remain in line with last year, Hershey emphasized that the final stretch of the season will be critical in determining overall performance (Source: The Hershey Company Q3 2026 Earnings Call, October 29, 2026).
StarMine models reveal mixed signals for confectionery stocks
Heading into Halloween weekend (Exhibit 1), both Hershey and Lindt rank in the top quartile of the StarMine Earnings Quality (EQ) Model, with Hershey earning an impressive score of 92 out of 100, indicating relatively strong and sustainable earnings quality.
Exhibit 1: StarMine Model Scores for Confectionery Companies
Source: LSEG Workspace
Despite Lindt’s strong earnings quality, other StarMine models paint a less favorable picture. The StarMine Smart Holdings Model score reflects unfavorable institutional ownership signals, while the company’s recent year-over-year revenue contraction raises additional concerns. Moreover, Lindt ranks in the bottom decile of the Price Momentum (PriceMo) Model, reflecting unfavorable stock price momentum.
Analysts surveyed by LSEG also appear increasingly cautious about Lindt’s second-half earnings outlook. The StarMine Analyst Revisions Model (ARM), which helps predict the direction of future earnings estimate revisions and stock price movements, assigns Lindt a score of just 7 out of 100, suggesting a heightened likelihood of downward earnings revisions. Consensus earnings per share (EPS) for the second half of 2026 currently stands at CHF 2,363.37. Meanwhile, the StarMine SmartEstimate of CHF 2,307.08 is below consensus, resulting in a Predicted Surprise of -2.38%, suggesting an elevated risk of an earnings miss (Exhibit 2).
The StarMine SmartEstimate is a weighted average of analyst estimates that assigns greater weight to more recent forecasts and historically more accurate analysts. LSEG research has shown that when the SmartEstimate differs from the I/B/E/S consensus mean by more than 2%, the direction of the subsequent earnings surprise is correctly predicted approximately 70% of the time. This percentage difference is known as the Predicted Surprise (PS%) and serves as an early indicator of potential earnings surprises.
Exhibit 2: Lindt StarMine SmartEstimate and Predicted Surprise (%), 2026
Source: LSEG Workspace
In contrast, Hershey exhibits more favorable signals across several StarMine models. The chocolate maker scores 92 out of 100 on both the Earnings Quality and Smart Holdings Models, suggesting relatively sustainable earnings and favorable institutional ownership trends. Combined with its strong return on equity (ROE) and return on assets (ROA), these indicators point to a constructive fundamental backdrop for Hershey, although its Price Momentum score of 33 suggests recent stock performance has been less favorable.
Meanwhile, Mondelez International, whose portfolio includes Sour Patch Kids and Cadbury, recently exceeded third-quarter earnings expectations. However, management remains cautious about the consumer spending environment. During the company’s latest earnings call, CEO Dirk Van de Put highlighted elevated energy and fuel prices as pressures on North American consumers, noting that spending growth continues to be driven disproportionately by higher-income households. Nevertheless, he attributed the company’s North American momentum partly to disciplined promotions, product innovation and expansion into underpenetrated retail channels. (Source: Mondelez International Q3 2026 Earnings Call, Oct. 29, 2026)
Mondelez also demonstrates strength across several StarMine models. The company scores 86 out of 100 on the Price Momentum (PriceMo) Model, reflecting favorable stock price trends (Exhibit 1). Its Smart Holdings score of 81 suggests positive institutional ownership signals, while its Combined Credit Risk (CCR) score places it in the top quartile, corresponding to an implied investment-grade credit rating of A.
Taken together, these StarMine indicators reveal a divergence among confectionery companies heading into Halloween weekend. While Hershey and Mondelez exhibit relatively favorable fundamental and investor sentiment signals, Lindt faces greater pressure from weakening momentum and the potential for downward earnings revisions. With consumers remaining price-sensitive and increasingly selective in their purchases, the ultimate test will be whether seasonal Halloween demand translates into sustained earnings growth beyond the holiday.
Halloween discounts
In collaboration with Centric Market Intelligence, LSEG found that discount penetration, the percentage of Halloween costumes and accessories offered on sale, declined sharply to 56%, down from 83% in 2025 (Exhibit 3).
Exhibit 3: Discount Penetration for Halloween Costumes & Accessories – Month of October
Source: Centric Market Intelligence Co.
Meanwhile, the average discount fell to 15%, marking its lowest level since 2022 and a significant decline from last year’s 36%. Together, these trends suggest retailers are scaling back promotional activity, offering fewer Halloween items on sale and shallower markdowns. This shift could signal greater confidence in consumer demand and a more disciplined approach to pricing and inventory management ahead of Halloween.
Exhibit 4: Average Discount for Halloween Costumes & Accessories – Month of October
Source: Centric Market Intelligence Co.
Despite fewer and shallower discounts, Halloween costume sell-out rates have strengthened considerably. As of October 2026, 11.0% of Halloween apparel items tracked online are completely sold out, marking the highest rate since at least 2019. This compares with just 2.0% in 2025, 6.0% in 2020 and 3.0% in 2019 (Exhibit 5). The increase suggests resilient consumer demand, although tighter inventory levels may also be contributing to higher sold-out rates.
Exhibit 5: October Halloween Costumes Sold-Out Rates 2019 – 2026
Source: Centric Market Intelligence Co.
On the home décor front, discount penetration, the percentage of Halloween decorations offered on sale, declined to 50%, down from 57% last year, but remains above its pre-pandemic level of 44% in 2019 (Exhibit 6).
Exhibit 6: Discount Penetration for Halloween Home Decorations – Month of October
Source: Centric Market Intelligence Co.
Meanwhile, the average discount edged down to 14% from 16% in 2025, broadly in line with historical levels. Together, these trends suggest retailers are scaling back promotional activity while maintaining pricing discipline, potentially to protect margins amid inflationary pressures. For last-minute shoppers, fewer Halloween decorations are on sale compared with last year, although the depth of discounts remains relatively consistent with previous years.
Exhibit 7: Average Discount for Halloween Home Decorations – Month of October
Source: Centric Market Intelligence Co.
With half of Halloween home décor merchandise on sale, promotional activity remains an important part of retailers’ seasonal strategies. As of October 2026, 18% of Halloween decorations tracked online are completely sold out, down from 21% last year but still above most historical levels (Exhibit 8). While this suggests relatively resilient demand, elevated sold-out rates may also reflect more conservative inventory planning amid ongoing trade uncertainty.
Exhibit 8: October Halloween Home Décor Sold-Out Rates 2019 – 2026
Source: Centric Market Intelligence Co.
Overall, Halloween 2026 trends suggest retailers are taking a more disciplined approach to pricing and promotions, with relatively stable prices, fewer discounts and elevated sold-out rates. The costume category stands out, with sold-out rates reaching their highest level since 2019 despite significantly fewer and shallower discounts, suggesting resilient consumer demand. According to Centric Market Intelligence, costume prices rose a modest 1.3% year-over-year, with licensed character apparel seeing an even smaller increase of 0.6%.
Meanwhile, home décor prices edged down 0.8%, while promotional activity moderated and sold-out rates remained elevated relative to recent years, although below 2019 levels. However, big-ticket decorations appear to be a weak spot, with lower sold-out rates despite broader discounting. Together, these trends point to an increasingly selective consumer who continues to embrace Halloween festivities but remains cautious about larger discretionary purchases, prompting retailers to balance competitive pricing with margin protection and inventory discipline.
