Loading...
01/10 22:42
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates a mixed performance: strong margins in the Food segment and a stable Protective business, but challenges with volume impacts and wide EBITDA guidance. The Q&A highlights cost-saving initiatives and strategic partnerships, but also reveals uncertainties in volume and market conditions. The reaffirmed guidance and efforts to optimize operations provide some confidence, but the lack of clarity on narrowing price gaps and potential volume softness balance the overall sentiment to neutral.
Net Sales $1.34 billion in the quarter, down 1% on a constant currency basis. The decline was attributed to softer volumes in both Food and Protective segments.
Adjusted EBITDA $293 million, up 3% on a constant currency basis. This increase was driven by cost takeout, productivity efficiencies, and a one-time benefit of $7 million from a lease buyout related to G&A network optimization, partly offset by unfavorable net price realization.
Adjusted Earnings Per Share (EPS) $0.89, up 7% as reported and 10% on a constant currency basis. The increase was due to improved operational efficiencies and a lower adjusted tax rate of 24.4% compared to 25.5% last year.
Food Segment Net Sales $896 million, flat as favorable pricing and formula pass-throughs were offset by softer volumes. The U.S. beef cycle, down 7%, was a significant factor in the decline.
Food Segment Adjusted EBITDA $210 million, up 3%. Adjusted EBITDA margin was 23.4%, up 50 basis points. The increase was driven by productivity and cost takeout savings combined with favorable net price realization, partially offset by lower volumes.
Protective Segment Net Sales $439 million, down 3% as reported and 4% in constant currency. Declines in the fulfillment portfolio were partially offset by slight growth within the industrial portfolio.
Protective Segment Adjusted EBITDA $78 million, down 5% as reported. Adjusted EBITDA margin was 17.8%, up 20 basis points from the first quarter. Cost takeout and productivity savings partially offset negative net price realization.
Free Cash Flow $81 million for the first 6 months, compared to $207 million in the same period of 2024. The reduction was due to increased incentive compensation payments and timing of tax payments, partially offset by lower interest payments and capital expenditures.
Net Leverage Ratio 3.6x at the end of the quarter. The company aims to reduce this to approximately 3.0x by the end of 2026.
Hybrid Autobag solution: A new product that can run either fiber or poly materials is being brought to market.
Jiffy and Boss Paper Mailer: Previously announced product gaining traction in the market.
EMEA region: Continued to take market share in the Food business throughout the first half of 2025.
Asia footprint: Expanding go-to-market strategies in the Protective segment.
Lakeland, Florida manufacturing facility: Opened to better serve customers in the Southeast of the U.S.
Network optimization: Assessing manufacturing footprint to enhance service, quality, and cost positions.
R&D strategy transformation: Increased use of external partners and suppliers to reduce time to market and address customer challenges faster.
Debt reduction: Net debt reduced below $4 billion for the first time since Q4 2022, with a focus on further debt paydown.
Global Trade Policies: Shifting global trade policies are impacting certain specialty resins procured for partners in countries affected by increased tariffs. While the net impact of tariffs was minimal in Q2, the situation remains dynamic, and there is uncertainty about the longer-term impact.
Economic Outlook: Lower economic growth outlooks, shifting industrial production, and changes in consumer spending patterns are creating demand uncertainties in the company's end markets, particularly in the U.S.
Protective Segment Turnaround: While progress is being made in the Protective segment turnaround, the process is nonlinear, and market uncertainties could impact the pace of recovery. Additionally, the company is addressing fiber portfolio gaps and optimizing its manufacturing network, which may pose operational challenges.
Food Segment Challenges: The North American market is under pressure due to shifting consumer spending patterns, inflation, and a decline in U.S. beef slaughter rates. These factors are leading to lower volumes and a mix shift in demand, particularly in industrial food processing and foodservice.
Supply Chain Volatility: The U.S. beef market is experiencing accelerated declines in slaughter rates, creating volatility and impacting the company's food segment. The rebuilding of cattle herds is a lengthy process, adding to the uncertainty.
Pricing and Cost Pressures: Deflationary raw materials and slightly lower pricing across both segments are expected in the second half of the year, which could impact margins.
Capital Allocation and Debt Reduction: The company is focused on debt reduction and has limited its M&A activities, which may constrain its ability to quickly adapt to market changes or invest in growth opportunities.
Economic Outlook: The company is closely monitoring global end markets to understand demand impacts due to lower economic growth outlooks, shifting industrial production, and changes in consumer spending patterns for the second half of the year and beyond.
Protective Segment: The company is expanding go-to-market strategies across EMEA and Asia. It is also addressing fiber portfolio gaps and bringing new innovations to market, such as the hybrid Autobag solution. Network optimization efforts are ongoing, with details to be shared in future quarters. The company remains cautious about the second half due to market uncertainties and global trade policies.
Food Segment: The company expects full-year volume growth outside the U.S., particularly in the EMEA region. However, North American markets face pressures due to shifting consumer spending patterns and declining U.S. beef slaughter rates. The company is bringing new solutions to market, including new packaging formats and enhanced equipment offerings, but these strategies will take time to capture market opportunities. The U.S. beef market is expected to remain volatile, with a lengthy recovery period of approximately three years.
Capital Allocation: The company is focused on debt paydown and expects to reduce net debt to adjusted EBITDA to approximately 3.0x by the end of 2026. Free cash flow guidance for the year is maintained at $400 million, with capital expenditures expected to be lower than originally anticipated.
Financial Guidance: The company is maintaining its sales guidance range of $5.1 billion to $5.5 billion and adjusted EBITDA guidance range of $1.075 billion to $1.175 billion for 2025. Adjusted earnings per share for the year are expected to be slightly above the midpoint of the previous guidance range of $2.90 to $3.30 per share. Third-quarter expectations include net sales of approximately $1.3 billion, adjusted EBITDA of $270 million, and adjusted earnings per share of around $0.68.
The selected topic was not discussed during the call.
The earnings call presents a mixed outlook. While strong EMEA performance and sustainable SG&A cost reductions are positive, concerns about U.S. beef production declines, demand corrections, and price degradation in North America suggest caution. The management's avoidance of clear answers on key issues adds uncertainty. The company's cautious approach to Q4 and 2026, coupled with unchanged guidance despite positive elements, indicates a balanced sentiment. These factors, combined with no significant new partnerships or shareholder return announcements, suggest a neutral stock price movement in the near term.
The earnings call summary indicates a mixed performance: strong margins in the Food segment and a stable Protective business, but challenges with volume impacts and wide EBITDA guidance. The Q&A highlights cost-saving initiatives and strategic partnerships, but also reveals uncertainties in volume and market conditions. The reaffirmed guidance and efforts to optimize operations provide some confidence, but the lack of clarity on narrowing price gaps and potential volume softness balance the overall sentiment to neutral.
The earnings call presents a mixed sentiment. Financial performance shows slight improvements in adjusted EPS and margins, but net sales are down. The protective segment faces challenges, though management expects improvement. Guidance is cautious, with modest growth projections. The share repurchase plan is positive, but lacks detail. The Q&A highlights competitive pressures and trade risks, with management providing vague responses on the protective segment's turnaround. Overall, the sentiment is neutral, as positive elements are offset by uncertainties and lack of strong growth signals.
The earnings call presents mixed results. Food sales and EBITDA show positive growth, but Protective sales and EBITDA are down significantly. EPS decline suggests financial strain, but cash flow and liquidity remain strong. The Q&A reveals concerns about Protective segment volumes and vague management responses, which may worry investors. Despite some positive aspects, the lack of clear guidance and mixed performance across segments suggest a neutral stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
