Graphic Packaging Reports Lower Q2 2026 Earnings as Inflation Pressures Margins, Updates Full-Year Outlook

Graphic Packaging Holding Company reported lower second-quarter 2026 earnings as persistent inflation weighed on profitability despite stable sales, productivity gains and operational improvements. The company also updated its full-year guidance, maintaining its revenue outlook while lowering earnings expectations to reflect higher inflation and interest costs.

Net sales for the quarter ended June 30, 2026, were $2.188 billion, compared with $2.204 billion a year earlier. Net income declined to $24 million, or $0.08 per diluted share, from $104 million, or $0.34 per diluted share, in the second quarter of 2025. Excluding non-recurring and special items and amortization of purchased intangibles, adjusted net income was $41 million, or $0.14 per diluted share, compared with $128 million, or $0.42 per diluted share, a year earlier.

Adjusted EBITDA totaled $247 million, down from $336 million in the prior-year quarter, while EBITDA fell to $240 million from $323 million. The decline was primarily attributed to approximately $60 million in commodity input and operating cost inflation, $27 million in lower pricing, $8 million from lower volume and mix, and a $3 million unfavorable foreign exchange impact. These factors were partially offset by $9 million in net performance improvements. Adjusted EBITDA margin decreased to 11.3% from 15.3% a year earlier. Innovation sales growth contributed $40 million during the quarter.

President and Chief Executive Officer Robbert Rietbroek said the company delivered adjusted EBITDA at the top end of its guidance despite higher-than-expected inflation. He said productivity initiatives, disciplined cost management and improving operational efficiencies helped mitigate inflationary pressures and supported a 50-basis-point sequential improvement in adjusted EBITDA margin compared with the first quarter. The company has also implemented additional productivity, cost reduction and pricing measures to support profitability in the second half of the year.

Graphic Packaging expects 2026 net sales at the high end of its $8.4 billion to $8.6 billion range, while forecasting adjusted EBITDA at the low end of its $1.05 billion to $1.25 billion range. The company now expects adjusted EPS of $0.65 to $0.90, revised to reflect higher interest expense, and adjusted cash flow of $600 million to $700 million, with capital spending expected to remain below $450 million. The company also expects structural cost actions to generate approximately $85 million in savings during 2026, partially offsetting an estimated $150 million in full-year inflation.

As part of its footprint optimization strategy, Graphic Packaging completed the divestiture of its Croatia facility, announced plans to close its Lebanon, Tennessee, facility to consolidate production, and notified employees of a review that could lead to the closure of its Winsford, UK, site. Capital expenditures totaled $83 million during the quarter, compared with $228 million a year earlier, while the company returned approximately $65 million to shareholders through regular dividends during the first six months of 2026. Total debt stood at $5.688 billion at quarter-end, with net debt of $5.483 billion and a net leverage ratio of 4.7x.