Business Context and Reporting Period
Company: GREIF, INC.
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended March 31, 2026 (Fiscal Year 2026).
Business Overview: Greif operates in four reportable segments: Customized Polymer Solutions, Durable Metal Solutions, Sustainable Fiber Solutions, and Innovative Closure Solutions. The company recently completed the divestiture of its Containerboard Business (discontinued operations) and Soterra land management assets.
Key Financial Metrics
| Metric (in millions) | Q2 2026 | Q2 2025 | 6 Months 2026 | 6 Months 2025 |
|---|---|---|---|---|
| Net Sales | $1,072.8 | $1,078.4 | $2,067.6 | $2,095.1 |
| Gross Profit | $247.0 | $248.5 | $449.6 | $447.9 |
| Operating Profit | $35.4 | $60.7 | $292.0 | $94.8 |
| Net Income (Continuing Ops) | $16.3 | $25.1 | $199.2 | $36.4 |
| Net Income (Total) | $16.3 | $46.4 | $197.2 | $73.1 |
| Adjusted EBITDA | $156.8 | $145.9 | $279.3 | $244.7 |
| Cash from Operations (6mo) | $92.2 (2026) vs $139.0 (2025) | |||
| Total Debt (Long-term + Current) | $713.7 (Mar 31, 2026) vs $919.4 (Sep 30, 2025) | |||
| Cash & Equivalents | $286.1 (Mar 31, 2026) |
Material Changes vs. Prior Period
- Revenue: Net sales decreased slightly in Q2 2026 ($5.6M) due to lower volumes and the Soterra divestiture, offset by positive foreign currency impacts. Year-to-date sales decreased $27.5M.
- Profitability: Operating profit for Q2 2026 declined $25.3M compared to Q2 2025, driven by higher SG&A expenses (including a special charitable contribution) and lower gross profit in the Polymer segment. However, year-to-date operating profit surged $197.2M, primarily due to a $216.2M gain from the Soterra divestiture.
- Restructuring: Restructuring charges increased to $15.7M in Q2 2026 from $9.1M in Q2 2025, totaling $29.9M for the six-month period.
- Asset Impairments: Non-cash asset impairment charges decreased significantly to $4.5M in Q2 2026 from $17.2M in Q2 2025.
- Divestitures: The Soterra Divestiture (closed Oct 2025) generated a significant gain recognized in the first half of 2026. The Containerboard Business is reported as discontinued operations.
Guidance, Outlook, and Risks
- Outlook: Management anticipates a subdued industrial demand environment with no near-term inflection. Geopolitical conflicts (e.g., Middle East) are contributing to demand volatility. Lower volumes are expected in metals, fiber, and closures, while polymer volumes are expected to remain flat.
- Cost Pressures: Inflationary pressures on raw materials, energy, and transportation are expected to continue due to supply chain disruptions.
- Capital Allocation: The company repurchased $147.2M of shares in the first six months of 2026. A new $300M share repurchase authorization (2025 Authorization) is in place but will not begin until the 2017 Authorization is completed.
- Liquidity: The company refinanced its debt in February 2026 (2026 Credit Agreements), providing an $800M revolving facility and term loans. Proceeds from the Soterra divestiture were used to repay debt.
- Tax: Income tax expense increased year-to-date due to a one-time discrete tax expense of $49.3M related to the Soterra Divestiture, partially offset by lower pre-tax earnings and tax audit releases.
Investor Verification Checklist
- Divestiture Impact: Verify the sustainability of earnings excluding the $216.2M one-time gain from the Soterra Divestiture, which heavily skewed year-to-date operating profit.
- SG&A Volatility: Confirm the nature and recurrence of the "special charitable contribution" that inflated SG&A expenses by approximately $31.8M in Q2 2026.
- Debt Refinancing: Review the terms of the new 2026 Credit Agreements, specifically the interest rate margins and leverage covenants (max 4.00x leverage ratio).
- Segment Performance: Analyze the divergence between the Sustainable Fiber Solutions segment (which reported a loss in Q2 but a massive YTD profit due to the divestiture gain) and the Customized Polymer segment (which saw operating profit decline significantly).
- Share Repurchases: Monitor the completion of the 2017 Authorization and the commencement of the new $300M 2025 Authorization.