Cascades Shares Fall after Outlook Cut on Rising Costs, Weaker Packaging Demand

Shares of Cascades declined after the company lowered its first-quarter outlook, citing higher operating costs and softer demand in its packaging business.

The stock fell 3.3% to 10.71 Canadian dollars following the announcement.

Cascades said external factors including U.S. weather disruptions, as well as volatility in transportation and fuel surcharges, increased operating expenses during the quarter. At the same time, geopolitical tensions weighed on consumer confidence and spending, resulting in reduced packaging volumes.

The company, which produces corrugated and specialty packaging, recycled paper, and tissue products, also pointed to internal execution inefficiencies in the latter half of the quarter as an additional drag on performance.

Cascades now expects first-quarter adjusted EBITDA in the range of C$115 million to C$120 million, down from its previous guidance of C$130 million to C$142 million and below market expectations of C$135.2 million. The revised outlook is primarily attributed to weaker results in the packaging segment, while tissue performance came in slightly below earlier projections.

In response to cost pressures, the company has begun implementing price increases across its containerboard, uncoated recycled board, and select tissue product lines. It is also assessing further pricing actions to mitigate ongoing cost inflation.

Despite the near-term challenges, Cascades said it remains committed to its goal of delivering C$100 million in profitability improvements by the end of 2026.

The company is scheduled to release its full first-quarter results before market open on May 7.