Business Context and Reporting Period
Company: GREIF, INC.
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three months ended December 31, 2025 (Fiscal Year 2026, Q1)
Business Overview: Greif, Inc. is a global provider of industrial packaging products and services. The company operates through four reportable segments: Customized Polymer Solutions, Durable Metal Solutions, Sustainable Fiber Solutions, and Innovative Closure Solutions. Effective October 1, 2025, the company aligned its fiscal year to end on September 30 and recast prior period segment information to reflect a strategic realignment.
Key Financial Metrics
| Metric (in millions) | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $994.8 | $1,016.7 |
| Gross Profit | $202.6 | $199.4 |
| Gross Margin | 20.4% | 19.6% |
| Operating Profit | $256.6 | $34.1 |
| Net Income (Attributable to Greif) | $174.6 | $22.0 |
| Diluted EPS (Class A) | $2.97 | $0.39 |
| Adjusted EBITDA | $122.5 | $98.8 |
| Cash and Cash Equivalents | $243.5 | $184.8 |
| Long-Term Debt (Net) | $655.1 | $914.8 |
| Short-Term Debt | $288.9 | $287.7 |
Material Changes vs. Prior Period
- Divestitures and Gains: The most significant driver of financial performance was the Soterra Divestiture, completed in October 2025, which generated a $215.7 million gain on the disposal of properties, plants, and equipment. This gain is included in continuing operations. Additionally, the Containerboard Business was divested in August 2025 and is reported as discontinued operations.
- Revenue: Net sales decreased by $21.9 million (2.2%) primarily due to lower volumes ($48.2 million impact), partially offset by positive foreign currency translation ($37.2 million).
- Profitability: Operating profit surged from $34.1 million to $256.6 million, driven almost entirely by the Soterra gain. Excluding this gain, underlying operating performance remained relatively stable with modest improvements in gross margins due to lower raw material costs.
- Restructuring: Restructuring and other charges increased to $14.2 million from $3.3 million, reflecting ongoing efforts to optimize operations and manage industrial contraction.
- Debt Reduction: Long-term debt decreased by approximately $260 million, as proceeds from the Soterra Divestiture were used to repay debt.
Guidance, Outlook, and Risks
- Outlook: Management notes continued softness in the industrial economy with no compelling demand inflection expected for the remainder of the year, though slight seasonal increases are anticipated for small plastics. Raw material prices (steel, resin) and transportation costs are expected to remain relatively stable, barring tariff impacts.
- Capital Allocation: The company repurchased $128.1 million of shares in Q1 2026. A new $300 million share repurchase authorization was approved in December 2025, to be utilized after the completion of the 2017 authorization.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) was enacted in July 2025, extending tax provisions such as 100% bonus depreciation. The company has incorporated the effects of this legislation into its fiscal 2026 tax provision.
- Risks: Key risks include global economic conditions, raw material price volatility, supply chain disruptions, currency exchange fluctuations, and potential environmental liabilities (e.g., Diamond Alkali Superfund Site).
Investor Verification Checklist
- Soterra Gain Sustainability: Verify the one-time nature of the $215.7 million gain and its impact on the reported operating profit and net income.
- Discontinued Operations: Review the financial results of the Containerboard Business presented as discontinued operations to understand the full scope of the portfolio shift.
- Debt Covenants: Confirm compliance with leverage and interest coverage ratios under the 2022 and 2023 Credit Agreements following the debt repayment.
- Restructuring Costs: Monitor the execution of the remaining $26.6 million in expected restructuring costs and their impact on future earnings.
- Share Repurchases: Track the progress of the 2017 and 2025 share repurchase authorizations and their effect on outstanding share counts.