Greif (GEF) Q1 2026 earnings summary

Executive summary

• Entered 2026 with strong momentum, executing strategic transformation and cost optimization, despite muted industrial demand and economic softness.

• Net income for Q1 2026 surged to $182.9 million, primarily due to a $216.2 million gain from the Soterra/timberlands divestiture.

• Adjusted EBITDA grew 24% year-over-year to $122.5 million, with margin up 260 basis points to 12.3%.

• Major divestitures completed, including Containerboard Business for $1.8 billion and Soterra, with proceeds used for debt repayment.

• Share repurchases of $130 million completed in Q1; new $300 million authorization approved.

Financial highlights

• Adjusted EBITDA rose to $122.5 million from $98.8 million year-over-year; margin improved from 9.7% to 12.3%.

• Adjusted Class A EPS increased 140% to $0.48, driven by higher EBITDA and lower interest expense.

• Net sales for Q1 2026 were $994.8 million, down $21.9 million year-over-year, mainly due to lower volumes and divestitures.

• Adjusted free cash flow was a use of $41.0 million, impacted by the absence of divestment contributions.

• Leverage ratio improved to 1.2x from 3.6x year-over-year, enabling capital flexibility.

Outlook and guidance

• Fiscal 2026 low-end guidance reaffirmed: Adjusted EBITDA of $630 million and Adjusted Free Cash Flow of $315 million.

• Full-year volume expected to be flat; Q1 softness anticipated to improve with seasonality and commercial initiatives.

• No near-term demand inflection identified; guidance reflects ongoing muted industrial demand.

• Tax rate for 2026 expected between 26.0% and 30.0% (excluding adjustments: 28.0%–32.0%).

• Operating cash flows and credit facilities expected to be sufficient for at least 12 months.