Graphic Packaging Company (GPK) Q1 2026 earnings summary

Executive summary

• Net sales rose 2% year-over-year to $2.16 billion in Q1 2026, with volumes up 1% and performance supported by favorable currency, despite lower pricing and external disruptions.

• Adjusted EBITDA was $232 million (10.8% margin), down 36% year-over-year, and adjusted EPS was $0.09, a significant decline from $0.51 in Q1 2025.

• Net loss was $43 million, compared to net income of $127 million in Q1 2025; diluted EPS was $(0.14) versus $0.42 last year.

• Completed a 90-day business review, confirming a strong foundation and advancing strategic priorities, cost reduction, and portfolio simplification.

• Innovation sales contributed $42 million in Q1, with 13 new patents filed.

Financial highlights

• Adjusted EBITDA declined $133 million year-over-year, impacted by $46 million headwind from price, volume, and mix, and $37 million in commodity and operating cost inflation.

• Adjusted cash flow improved to -$183 million from -$442 million last year, reflecting seasonal cash use.

• Severe weather, maintenance, and restructuring led to $25 million, $20 million, and $71 million in additional costs and charges, respectively.

• Interest expense, net, was $64 million, up from $51 million year-over-year.

• Inventory reduced by $48 million during the quarter.

Outlook and guidance

• 2026 guidance reaffirmed: 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 free cash flow of $700–$800 million.

• Q2 adjusted EBITDA expected between $230–$250 million; full-year tax rate expected at 25%.

• Capital expenditures for 2026 expected at ~$450 million; $500 million of debt paydown planned.

• Inventory targeted to fall to 17–18% of sales in 2026, with a long-term goal of 15–16%.

• Year-end net leverage targeted below 4.2x; interest expense $250–$270 million.