AptarGroup (ATR) Q1 2025 earnings summary

Executive summary

• Q1 2025 reported sales declined 3% year-over-year to $887 million, with core sales flat and no impact from acquisitions; net income was $78.8 million, down from $83.1 million in Q1 2024.

• Adjusted EBITDA margin expanded to 20.7%, up 120 basis points year-over-year, driven by cost management and segment mix.

• Pharma segment showed continued strength in proprietary drug delivery systems and active materials, offsetting declines in Beauty and Closures.

• Beauty segment sales declined due to lower prestige fragrance volumes, but masstige and China showed improvement; Closures segment was impacted by lower tooling sales and discontinued Argentina operations.

• Returned $110 million to shareholders via $80 million in share repurchases and $30 million in dividends.

Financial highlights

• Adjusted EPS was $1.20, up 5% excluding currency and tax rate changes; reported EPS was $1.17.

• Adjusted EBITDA was $183 million, up 3% year-over-year; free cash flow increased to $25.9 million from $16.7 million in Q1 2024.

• Effective tax rate rose to 26% from 20% due to a temporary French surtax and lower share-based compensation benefits.

• Gross margin improved as cost of sales decreased to 62.1% of net sales from 63.7% year-over-year.

• Net income margin was 8.9% in Q1 2025, down from 9.1% in Q1 2024.

Outlook and guidance

• Q2 2025 adjusted EPS guidance is $1.56–$1.64, with an effective tax rate of 19–21% due to a one-time tax benefit.

• Management expects positive contributions from all segments and continued resilience in core end markets.

• 2025 capital expenditures projected at $280–$300 million, mainly for pharma; D&A expected at $260–$270 million.

• Net impact of tariffs expected to be limited; supply chain flexibility cited as a strength.

• Long-term pharma growth target of 7–11% CAGR reaffirmed.