Oct 22, 2026 earnings call — Updated outlook and cost recovery actions
Updated full-year guidance to net sales of $7.2 billion to $7.4 billion.
Revenue $2.0B (est $2.1B) · EPS $1.67 (est $1.74) · Next-quarter revenue outlook $7.2B–$7.4B
Key quotes
"Freight costs alone increased $17 million year-over-year in the quarter, while diesel prices, which had stabilized in early July, accelerated to record levels, topping $6.50 per gallon in the U.S."
"The plan delivered $16 million of savings in the third quarter, up from $10 million in the second quarter, $8 million in the first."
"Results from our Consumer Packaging segment were below our expectations. Volume/mix was down 3% year-over-year, primarily due to hot and dry weather conditions and unfavorable price/cost relationships during the quarter."
Analyst Q&A 10
Q4 range and goodwill impairment
Q (George Staphos · BofA): They asked why the fourth-quarter guidance range is wide and where the uncertainty is coming from. They also asked what drove the impairment on the food can business and what it means for future cash generation.
A: Management said the range is wide because of macro unknowns, including unexpected inflation in diesel and holiday season effects, though results are tracking to the midpoint as the quarter begins. On the impairment, they said the goodwill test is part of the normal annual process and that Q3 volume challenges and inflation led to the charge, but the long-term strategy and viability of the business remain intact.
"So George, the impairments, we annually test our goodwill in the third quarter, and this really is a normal cycle for us." — Paul Joachimczyk (CFO)
Q3 cost impact and 2027/2028 bridge
Q (Michael Roxland · Truist): How big were the incremental costs in the quarter and how much did productivity offset? Also, what are the main items to bridge to 2027 EBITDA and how will you reach the $1.5 billion EBITDA target for 2028?
A: They said the quarter had roughly a $40 million, $50 million total headwind split almost evenly between volume and inflation, and productivity offset part of that but some fell to the bottom line. For 2027 they cited two site closures worth $15 million to $20 million of benefit, expect relatively flat volumes, ongoing PPP productivity, industrial should move to positive price/cost into early 2027, and steel buy negotiations and contract resets will affect recovery; full 2027 context will be provided in February. On 2028 they will give context in February as well.
"And you could say roughly the total impact was around $40 million, $50 million almost split between volume and inflation." — Paul Joachimczyk (CFO)
Consumer volumes and 4Q costs
Q (Anthony Pettinari · Citi): They asked about Consumer volumes year-to-date and what to expect for the 4Q range, and whether costs in 4Q will be stable or change versus 3Q.
A: Management said they are forecasting Q4 to be relatively flat year-over-year in Consumer and Industrial to be up slightly. They said they assume inflation has leveled, but noted timing effects: some industrial price recognition was consumed in Q3 and the later recognition will not be fully recovered until January 1, and many Consumer contracts reset at the start of the year so inflation headwinds remain.
"Right now, what we're forecasting into Q4 is relatively flat year-over-year on Consumer." — Robert Coker (CEO)
Europe volumes and competitor in URB
Q (Mark Weintraub · Seaport Research Partners): He wanted more detail on why 3Q volumes behaved as they did, especially in Europe, and whether the competitor reentering the URB market will affect Sonoco's business or pricing.
A: They said drought and similar seasonal impacts hit volumes across the globe and that the food can volumes were the main drag, while aerosol, fish/seafood, pet food, and paper can snacking portfolios showed strength. On the competitor, management said they are not seeing that competitor in their space and are not currently concerned about pricing impact.
"The drought and impacts like that did impact our volumes across the globe." — Paul Joachimczyk (CFO)
Can pricing clauses and PPP cadence
Q (John Dunigan · Jefferies): He asked whether can pricing has PPI or pass-through clauses and whether contract structures differ by region. He also asked for an update on PPP (productivity) cadence and targets over the remaining multi-year plan.
A: They said pricing is primarily set by annual negotiations for the steel component with two main customer price points (around Q1 and Q2) and accelerators exist for ancillary surcharges, and that paper can contracts are very similar. For PPP, they said they are targeting right now around $50 million in 2026, have identified $15 million to $20 million from two site closures into 2027, expect 2027 to be incrementally higher (they cited roughly $10 million to $15 million to $20 million higher), and are targeting about $180 million in the middle of the $150 million to $200 million range.
"But it is primarily to 2 points in time where you go and negotiate prices with customers." — Paul Joachimczyk (CFO)
OCC outlook and reels/data center demand
Q (Hillary Cacanando · Deutsche Bank): She asked how OCC costs look for 4Q and into 2027 and whether elevated OCC can be recovered under pricing; she also asked about 2027 growth for the reels business and any change in data center demand.
A: They said they are assuming OCC will be flat going into the fourth quarter and it is too soon to say whether they will take further price actions, but they will evaluate options as they enter the new year. For reels, they said they expect similar growth rates next year as in recent years, that added capacity and productivity support that growth, and that data center demand has been slower than some expected and has not been a major driver to date.
"As we're looking into next year, we're probably similar type growth rates that we've seen over the last couple of years." — Robert Coker (CEO)
2026 price/cost and 2027 dynamics
Q (Ghansham Panjabi · Baird): He asked what price/cost performance looked like for full-year 2026 and whether the company expects to recover the shortfall in 2027. He also asked if affordability will hurt Consumer volumes in 2027.
A: They said 2026 saw lagging price/cost in both Consumer and Industrial and some of that cost will be foregone, but they expect to recover through successive quarters with Industrial moving to positive price/cost into late Q4 and into Q1 2027 and that Ernest's pricing negotiations should recover inflation and be relatively neutral in 2027. On volumes, they said they are not expecting a structural deterioration from affordability, noted trade-downs to private label, and pointed to international snack growth, new product launches, and strength in categories like tuna and powdered infant formula as positives.
"As we talk to the industrial side, we're going to be call it, positive price/cost as we go into the end of, like call it, the end of fourth quarter and then starting into the Q1 of '27." — Paul Joachimczyk (CFO)
2027 conservatism and aerosols outlook
Q (Matthew Roberts · Raymond James): He asked why Consumer should not be up in 2027 given easy comps, pack season, and new products, and whether strength in URB and reels should carry into 2027. He also asked if aerosol strength in 3Q was a one-time restock.
A: Management said they are early in forecasting and are being conservative after being too optimistic into 2026, and they will provide more detail as year-end approaches. On aerosols they said they are bullish, have a good customer mix, saw strong Q3 results, do not expect a permanent 5%–7% run rate but do expect no material step back and continued positive performance.
"So we expect it to not step backwards in any material type of way, but should continue to flow through it." — Robert Coker (CEO)
Refi impact on interest expense
Q (Anojja Shah · UBS): He asked how the $800 million term loan refinancing will affect interest expense next year.
A: They said the impact to interest expense is roughly immaterial — about $2 million to $3 million in total — and that the refinance gives more optionality by pushing out maturities so nothing comes current in 2027 and maturities are extended into 2028 and beyond.
"The impact to our interest expense is going to be roughly immaterial, call it, $2 million to $3 million in total." — Paul Joachimczyk (CFO)
OCC seasonality and Consumer secular outlook
Q (George Staphos · BofA): Short-term: will OCC generation in Q4 into early Q1 keep prices elevated or level? Long-term: has the secular volume outlook for the Consumer business changed?
A: They said OCC is behaving normally and they are not planning for increases; there could be more generation over the holidays or a decline, and they get the first full pricing true-up on January 1. They also said that exposure to weather/agriculture has risen from about 5% to 7% in 2019 to about 15% to 17% today, but they remain bullish because of strength in pet, powdered infant formula, tuna, paper cans and snack launches and international growth.
"And then today, we're probably around 15% to 17% in total company." — Robert Coker (CEO)