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Greif Q4 Earnings Miss Estimates on Higher Costs, Sales Beat
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Key Takeaways
Greif's Q4 adjusted EPS rose 50% to 87 cents but missed estimates, while sales climbed 4.5% to $1.14B.
Higher raw material and manufacturing costs pressured margins, offsetting gains from stronger selling prices.
GEF targets at least $645M in fiscal 2027 adjusted EBITDA and raises its cost optimization goal to $150M.
Greif, Inc. (GEF - Free Report) reported adjusted earnings of 87 cents per share for fourth-quarter fiscal 2026, missing the Zacks Consensus Estimate of $1.09 by 20.18%. However, the bottom line increased 50% from 58 cents in the year-ago quarter. Higher raw material and manufacturing costs, along with unfavorable incentive accrual timing comparisons, weighed on profitability.
Including one-time items, the company reported a loss of 11 cents per share compared with a loss of 42 cents in the prior-year quarter.
GEF’s sales increased 4.5% year over year to $1.14 billion. The top line surpassed the Zacks Consensus Estimate of $1.10 billion by 3.77%. Higher average selling prices across its businesses supported revenue growth, partially offset by lower volumes in several segments.
The cost of sales increased 5.2% year over year to $889 million. Gross profit rose 2.2% to $254.6 million from $249.2 million in the prior-year quarter. The gross margin, however, contracted to 22.3% from 22.8%, reflecting higher input and manufacturing costs.
Selling, general and administrative expenses declined to $153.6 million from $166.9 million in the year-ago quarter. Operating profit increased 4% to $36.4 million.
Adjusted EBITDA declined 3.1% year over year to $163 million. The adjusted EBITDA margin contracted to 14.3% from 15.4%. The quarter's adjusted EBITDA comparison was negatively impacted by $18.2 million due to the timing of incentive accrual changes in the prior-year quarter.
Greif's Segment Performance in Q4
Revenues in the Customized Polymer Solutions segment increased 12.1% year over year to $361.9 million, primarily driven by higher average selling prices, contributions from recent acquisitions and favorable foreign currency translation. Lower volumes partially offset these gains. The segment's adjusted EBITDA remained flat at $44.5 million, reflecting higher raw material, transportation and manufacturing costs.
The Durable Metal Solutions segment's revenues increased marginally to $392.5 million from $391.9 million in the prior-year quarter. Higher average selling prices and favorable currency translation were offset by lower volumes. Adjusted EBITDA declined to $56.2 million from $57 million, primarily due to higher SG&A expenses.
The Sustainable Fiber Solutions segment's revenues rose 1.4% year over year to $360.1 million. Higher published index prices and increased volumes supported sales, while the divestiture of the Soterra land management business partially offset growth. Adjusted EBITDA declined to $52 million from $61.5 million, reflecting higher raw material and manufacturing costs and corporate SG&A expenses.
The Innovative Closure Solutions segment's revenues increased 18.8% year over year to $29.1 million, primarily driven by higher average selling prices. Adjusted EBITDA rose to $10.3 million from $5.2 million in the prior-year quarter, supported by favorable pricing.
GEF's Fiscal 2026 Results
For fiscal 2026, Greif reported adjusted earnings of $4.04 per share, missing the Zacks Consensus Estimate of $4.32 by 6.48%. However, earnings increased 74.9% from $2.31 in fiscal 2025.
Net sales rose 1.4% year over year to $4.38 billion, surpassing the consensus estimate of $4.34 billion by 0.96%. The annual performance benefited from stronger pricing, structural cost optimization and improved profitability across several businesses despite continued weakness in global industrial markets.
Greif's Cash Position & Balance Sheet at Fiscal 2026-End
Greif reported cash and cash equivalents of $295.4 million as of the end of fiscal 2026 compared with $256.7 million at the end of fiscal 2025. Cash flow from operating activities totaled $296 million in the quarter compared with $97.6 million in the fiscal 2025.
Long-term debt amounted to $755.7 million compared with $914.8 million as of Sept. 30, 2025. Total debt declined to $1.10 billion, while net debt decreased to $800.9 million from $945.8 million. The company's leverage ratio improved to 1.2 times from 1.7 times.
Adjusted free cash flow declined to $279.3 million from $380.3 million in the year-ago quarter.
GEF Provides Fiscal 2027 Outlook
GEF expects fiscal 2027 adjusted EBITDA of at least $645 million and adjusted free cash flow of at least $290 million. The outlook reflects continued weakness in industrial markets, with management indicating no compelling signs of a demand recovery.
The company increased its cumulative annual run-rate cost optimization target to $150 million by the end of fiscal 2027. Greif also announced the closure of its Sweetwater paperboard mill in Georgia as part of its strategic exit from the Coated Recycled Board business, aimed at improving the efficiency and profitability of its remaining Fiber operations.
Greif’s Stock Price Performance
The company’s shares have gained 43.3% in a year compared with the industry’s 18.1% growth.
Packaging Corporation of America (PKG - Free Report) reported third-quarter 2026 adjusted earnings of $3.04 per share, up 11.4% year over year and beating the Zacks Consensus Estimate of $2.95 by 3.05%. The bottom line also exceeded the company's guidance of $2.91, driven by favorable price and mix in the Packaging segment and contributions from the acquired operations.
Packaging Corp’s net sales increased 12.5% year over year to $2.60 billion and beat the consensus estimate of $2.56 billion.
Sonoco Products Company (SON - Free Report) posted adjusted earnings of $1.67 per share in the third quarter of 2026, missing the Zacks Consensus Estimate of $1.76. The figure dipped 13% from $1.92 in the year-ago quarter. Sonoco’s net sales of $2.04 billion declined 4.2% year over year and missed the consensus mark of $2.09 billion.
Silgan Holdings (SLGN - Free Report) reported quarterly earnings of $1.31 per share, beating the Zacks Consensus Estimate of $1.26 per share. Earnings increased 7% year over year.
Silgan posted revenues of $2.04 billion for the quarter ended September 2026, missing the Zacks Consensus Estimate of $2.07 billion. This compares with year-ago revenues of $2.01 billion.
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Greif Q4 Earnings Miss Estimates on Higher Costs, Sales Beat
Key Takeaways
Greif, Inc. (GEF - Free Report) reported adjusted earnings of 87 cents per share for fourth-quarter fiscal 2026, missing the Zacks Consensus Estimate of $1.09 by 20.18%. However, the bottom line increased 50% from 58 cents in the year-ago quarter. Higher raw material and manufacturing costs, along with unfavorable incentive accrual timing comparisons, weighed on profitability.
Including one-time items, the company reported a loss of 11 cents per share compared with a loss of 42 cents in the prior-year quarter.
Greif, Inc. Price, Consensus and EPS Surprise
Greif, Inc. price-consensus-eps-surprise-chart | Greif, Inc. Quote
GEF's Sales & Profitability Improve
GEF’s sales increased 4.5% year over year to $1.14 billion. The top line surpassed the Zacks Consensus Estimate of $1.10 billion by 3.77%. Higher average selling prices across its businesses supported revenue growth, partially offset by lower volumes in several segments.
The cost of sales increased 5.2% year over year to $889 million. Gross profit rose 2.2% to $254.6 million from $249.2 million in the prior-year quarter. The gross margin, however, contracted to 22.3% from 22.8%, reflecting higher input and manufacturing costs.
Selling, general and administrative expenses declined to $153.6 million from $166.9 million in the year-ago quarter. Operating profit increased 4% to $36.4 million.
Adjusted EBITDA declined 3.1% year over year to $163 million. The adjusted EBITDA margin contracted to 14.3% from 15.4%. The quarter's adjusted EBITDA comparison was negatively impacted by $18.2 million due to the timing of incentive accrual changes in the prior-year quarter.
Greif's Segment Performance in Q4
Revenues in the Customized Polymer Solutions segment increased 12.1% year over year to $361.9 million, primarily driven by higher average selling prices, contributions from recent acquisitions and favorable foreign currency translation. Lower volumes partially offset these gains. The segment's adjusted EBITDA remained flat at $44.5 million, reflecting higher raw material, transportation and manufacturing costs.
The Durable Metal Solutions segment's revenues increased marginally to $392.5 million from $391.9 million in the prior-year quarter. Higher average selling prices and favorable currency translation were offset by lower volumes. Adjusted EBITDA declined to $56.2 million from $57 million, primarily due to higher SG&A expenses.
The Sustainable Fiber Solutions segment's revenues rose 1.4% year over year to $360.1 million. Higher published index prices and increased volumes supported sales, while the divestiture of the Soterra land management business partially offset growth. Adjusted EBITDA declined to $52 million from $61.5 million, reflecting higher raw material and manufacturing costs and corporate SG&A expenses.
The Innovative Closure Solutions segment's revenues increased 18.8% year over year to $29.1 million, primarily driven by higher average selling prices. Adjusted EBITDA rose to $10.3 million from $5.2 million in the prior-year quarter, supported by favorable pricing.
GEF's Fiscal 2026 Results
For fiscal 2026, Greif reported adjusted earnings of $4.04 per share, missing the Zacks Consensus Estimate of $4.32 by 6.48%. However, earnings increased 74.9% from $2.31 in fiscal 2025.
Net sales rose 1.4% year over year to $4.38 billion, surpassing the consensus estimate of $4.34 billion by 0.96%. The annual performance benefited from stronger pricing, structural cost optimization and improved profitability across several businesses despite continued weakness in global industrial markets.
Greif's Cash Position & Balance Sheet at Fiscal 2026-End
Greif reported cash and cash equivalents of $295.4 million as of the end of fiscal 2026 compared with $256.7 million at the end of fiscal 2025. Cash flow from operating activities totaled $296 million in the quarter compared with $97.6 million in the fiscal 2025.
Long-term debt amounted to $755.7 million compared with $914.8 million as of Sept. 30, 2025. Total debt declined to $1.10 billion, while net debt decreased to $800.9 million from $945.8 million. The company's leverage ratio improved to 1.2 times from 1.7 times.
Adjusted free cash flow declined to $279.3 million from $380.3 million in the year-ago quarter.
GEF Provides Fiscal 2027 Outlook
GEF expects fiscal 2027 adjusted EBITDA of at least $645 million and adjusted free cash flow of at least $290 million. The outlook reflects continued weakness in industrial markets, with management indicating no compelling signs of a demand recovery.
The company increased its cumulative annual run-rate cost optimization target to $150 million by the end of fiscal 2027. Greif also announced the closure of its Sweetwater paperboard mill in Georgia as part of its strategic exit from the Coated Recycled Board business, aimed at improving the efficiency and profitability of its remaining Fiber operations.
Greif’s Stock Price Performance
The company’s shares have gained 43.3% in a year compared with the industry’s 18.1% growth.
Image Source: Zacks Investment Research
GEF’s Zacks Rank
Greif currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Packaging Stocks
Packaging Corporation of America (PKG - Free Report) reported third-quarter 2026 adjusted earnings of $3.04 per share, up 11.4% year over year and beating the Zacks Consensus Estimate of $2.95 by 3.05%. The bottom line also exceeded the company's guidance of $2.91, driven by favorable price and mix in the Packaging segment and contributions from the acquired operations.
Packaging Corp’s net sales increased 12.5% year over year to $2.60 billion and beat the consensus estimate of $2.56 billion.
Sonoco Products Company (SON - Free Report) posted adjusted earnings of $1.67 per share in the third quarter of 2026, missing the Zacks Consensus Estimate of $1.76. The figure dipped 13% from $1.92 in the year-ago quarter. Sonoco’s net sales of $2.04 billion declined 4.2% year over year and missed the consensus mark of $2.09 billion.
Silgan Holdings (SLGN - Free Report) reported quarterly earnings of $1.31 per share, beating the Zacks Consensus Estimate of $1.26 per share. Earnings increased 7% year over year.
Silgan posted revenues of $2.04 billion for the quarter ended September 2026, missing the Zacks Consensus Estimate of $2.07 billion. This compares with year-ago revenues of $2.01 billion.