Oct 28, 2026 earnings call — Earnings inflection and EMEA separation update
Adjusted EBITDA increased to $843 million and margin rose to 13.6%; free cash flow was -$267 million for the quarter.
Revenue $6.2B (est $6.3B) · EPS $0.37 (est $0.29)
Key quotes
"In the third quarter, we improved execution, and delivered an important inflection in earnings in an environment of weak consumer confidence and rising inflation."
"We are advancing the EMEA separation and are on track to finalize execution."
"Price and mix were a $141 million favorable reflecting faster realization of previously published price increases announced through June."
Analyst Q&A 5
Customer demand trends and margin goals
Q (Philip Ng · Jefferies): He asked what customers in North America and Europe are saying about demand in October/November and whether demand is bouncing back. He also asked if the aspirational 20%+ EBITDA margin goal for North America is still realistic for 2027.
A: Management said North America is generally stable sequentially but West Coast fruit and vegetable issues will take time to work through. They said protein demand was soft and inflation is the main thing customers and the company are wrestling with. They are not giving 2027 guidance now but said the business is on a trajectory that could reach margins with a "2 in front of it" as operations improve and projects ramp.
"We are not doing anything in terms of guidance for 2027 at this stage." — Andrew K. Silvernail (CEO·CHAIR)
Q4 pricing and productivity actions
Q (Mark Weintraub · Seaport Research Partners): He asked if the September price increase is included in box prices for the fourth quarter. He also asked what actions beyond Riverdale and NORPAK can drive earnings higher next year in North America.
A: Management confirmed the September price increase is not baked into fourth-quarter box prices. They said future improvement will come from aggressive reinvestment and productivity gains rather than big new facility closures, and they expect meaningfully above-trend productivity improvements. They also noted continued work to sell real estate and eliminate tails from closed facilities to reduce costs.
"Mark, it is not kind of big nameplate things like facility closures that we have mentioned in the past, but what we are now moving to really aggressive reinvestment and productivity." — Andrew K. Silvernail (CEO·CHAIR)
Cost savings size and demand outlook
Q (George Staphos · BofA): He asked whether the company can size the 80/20 productivity (cost-out) benefit for North America this year and next, and how ongoing cost inflation affects that. He also asked what long-term volume growth the company expects given inflation pressure.
A: Management said it is not useful to parse each action too finely and recommended looking at the published bridges and total cost view split between input and structural cost. They said they will provide 2027 guidance at the fourth-quarter call in January. For demand, they see long-term volume growth around a half point to a point, but expect near-term markets to be pretty flat because inflation is pressuring lower-income consumers and energy costs remain elevated.
"And our view is it is somewhere in the neighborhood of a half point to a point of volume growth." — Andrew K. Silvernail (CEO·CHAIR)
Free cash flow drivers and EMEA carrying value
Q (Detlef Winklemann · JPMorgan): He asked the company to explain the moving parts behind the $100 million to $200 million free cash flow guidance and whether the difference is mainly working capital. He also asked where the carrying value for EMEA is now.
A: Management said the big drag on third-quarter free cash flow was working capital, driven by an inventory catch-up after a winter storm disrupted earlier builds. They expect the fourth quarter to show stronger operating results, a working capital swing back to positive, and the lowest CapEx quarter, which should improve free cash flow. On the EMEA carrying value question they declined to confirm on the call and said they will follow up with an accurate number because the analyst's number is very low.
"So the third quarter is really that the catch up quarter for us from an inventory perspective." — Lance T. Loeffler (CFO)
North America CapEx and West Coast impact
Q (Anthony Pettinari · Citi): He asked how to think about North American CapEx needs as IP becomes a standalone North American business and whether the Analyst Day 6.5% of sales benchmark applies. He also asked how much West Coast agriculture impacted volumes and how October volumes looked.
A: Management said the 6.5% CapEx number referenced earlier was specific to EMEA, not North America, and that North America will remain elevated for a couple more years with a similar range next year as this year. They said they have not broken out the West Coast agriculture impact as a single percentage and view it customer by customer. They added that October volumes in the U.S. looked generally similar and that consumers and customers remain cautious due to inflation.
"We have not broken out the impact of West Coast ag specifically." — Andrew K. Silvernail (CEO·CHAIR)