GPK · Graphic Packaging Holding Company

Graphic Packaging's first quarter 2026 results reflect a challenging operating environment, with net sales growing 2% to $2,156 million, driven by 1% volume growth and favorable foreign exchange, partially offset by a 2% price decline. However, profitability deteriorated sharply: GAAP net loss was $43 million versus net income of $127 million in the prior year, impacted by $71 million in non-recurring and special items including asset impairment charges. Adjusted EBITDA fell 36% to $232 million, with margin contracting to 10.8% from 17.2%, pressured by unfavorable net performance ($56 million), lower price/volume/mix ($46 million), and input cost inflation ($37 million). Management highlighted strong relative performance versus expectations, citing disciplined execution despite weather disruptions. The company completed a 90-day comprehensive business review, announcing actions to drive cost discipline and operational efficiency, including a workforce reduction of over 500 roles, a pending divestiture of non-core assets in Croatia, and cancellation of low-return projects resulting in over $200 million in capital avoidance. Capital spending guidance for 2026 was reaffirmed at approximately $450 million, down sharply from $922 million in 2025. The company reiterated full-year 2026 guidance: net sales of $8.4-$8.6 billion, adjusted EBITDA of $1.05-$1.25 billion, adjusted EPS of $0.75-$1.15, and adjusted cash flow of $700-$800 million. Net leverage rose to 4.4x from 3.8x at year-end 2025, reflecting higher debt and lower EBITDA. The company returned $32 million to shareholders via dividends in the quarter.