Amcor September 2026 Quarter Earnings: Higher Costs Prompt an Outlook Cut

Amcor (NYSE: AMCR; ASX: AMC) reported net sales of $6.129 billion for the quarter ended September 30, 2026, up 7% from $5.745 billion, while diluted GAAP EPS fell 9% to $0.52 from $0.57. Adjusted EBIT was essentially flat at $689 million, but free cash outflow widened to $820 million, and late-quarter energy and distribution cost inflation led management to lower its transition-period adjusted EPS guidance.

Core Earnings Data

Sales increased 6% on a constant-currency basis, but raw-material cost pass-through accounted for approximately $435 million, or eight percentage points, of the growth. Divestitures reduced sales by about $112 million, or two percentage points, leaving organic growth of 1%; volumes rose 1%, or approximately 1.5% excluding non-core and divested businesses, while price and mix had no material effect.

Profit growth did not keep pace with revenue. Approximately $50 million of Berry acquisition synergies and higher volumes helped adjusted EBIT, but these benefits were offset by an expected rebuilding of incentive compensation and the timing of passing through higher energy and distribution costs. Adjusted EBITDA declined 3% on the reported comparison, although Amcor described it as flat after excluding a $21 million divestment impact.

Prior-period share and per-share figures were retroactively adjusted for Amcor’s 1-for-5 reverse stock split completed on January 14, 2026. Free cash flow and other adjusted figures are non-GAAP measures.

Business and Segment Performance

Flexible Packaging generated most of the reported sales growth, although raw-material pass-through drove the increase. Rigid Packaging delivered stronger underlying volume growth but faced divestiture effects and a decline in adjusted EBIT.

Flexible Packaging’s $316 million raw-material pass-through benefit represented the segment’s entire 10% sales increase. Volumes were flat overall and rose approximately 1% excluding unconverted film sales in North America. Adjusted EBIT increased 1% as Berry synergies were partly offset by the lag in recovering higher energy and distribution costs. Excluding the 130-basis-point margin dilution from raw-material pass-through, its adjusted EBIT margin was 13.6%, up 20 basis points on a comparable basis.

Rigid Packaging sales included a $107 million, or 4%, divestiture headwind and a $119 million, or 4%, benefit from raw-material pass-through. Volumes increased approximately 4% after excluding non-core and divested operations. Adjusted EBIT fell 3%, including a $17 million divestiture impact; excluding that effect, synergies and higher volumes produced growth that was partly offset by energy and distribution costs. Its comparable margin excluding pass-through dilution was 11.4%, down 20 basis points.

Cost Pass-Through Timing Pressured Margins and Cash Flow

The reported adjusted EBIT margin declined to 11.2%, but Amcor attributed 90 basis points of that compression to additional sales dollars created by raw-material cost pass-through. Excluding this denominator effect, the margin was 12.1%, up 10 basis points on a comparable basis. The more direct operating pressure came from energy and distribution costs that accelerated late in the quarter before Amcor could fully pass them through.

Cash flow deteriorated more sharply. GAAP operating cash outflow increased to $527 million from $133 million, while the working-capital outflow widened to $1.127 billion from $569 million. Amcor linked the pressure to resin-price volatility associated with the Middle East conflict. Free cash flow was negative $820 million after $31 million of Berry-related restructuring and integration costs, while capital spending and purchases of other intangible assets increased to $301 million from $238 million.

Cash declined to $832 million from $1.115 billion at June 30, 2026, and net debt increased to $14.011 billion from $12.897 billion. Net interest expense was $153 million; on an adjusted basis, management said it increased by $13 million primarily because of higher interest rates. The board separately declared a quarterly dividend of $0.66 per share, up from the reverse-split-adjusted $0.65 paid in the comparable quarter.

Updated Transition-Period Guidance

Amcor’s transition period runs from July 1 through December 31, 2026, as the company moves from a June 30 to a December 31 fiscal year-end. The company reduced both ends of its adjusted EPS range by $0.10 because of the timing of recovering higher energy and distribution costs, while its leverage expectation moved to the upper end of the prior range.

The outlook excludes potential portfolio optimization actions that had not been announced. Amcor also identified ongoing geopolitical developments as a source of additional uncertainty.

Management Commentary

CEO Peter Konieczny emphasized broad-based organic volume growth of 1%, including 3% growth in Amcor’s focus categories. Pet food, foodservice, and beauty and wellness led end-market growth, while lower North American unconverted film volumes provided a partial offset. Management said Berry synergy realization remained in line with expectations and that Amcor was on track for its three-year target of $650 million.

Management has begun actions to address higher energy and distribution expenses and does not expect those costs to affect 2027 results. That assessment depends on the company passing through the inflationary pressure and executing its cost actions on schedule.

Risks Investors Should Monitor

• Cost-recovery timing: Further delays in passing through energy and distribution inflation could continue to pressure adjusted EBIT, margins, and transition-period EPS.
• Working-capital volatility: Resin-price movements associated with geopolitical conflict contributed to a large cash outflow. Continued volatility could delay cash-flow normalization and keep leverage elevated.
• Debt and interest costs: Net debt reached $14.011 billion, while higher rates increased adjusted net interest expense. Sustained cash outflows or higher borrowing costs could constrain deleveraging.
• Berry integration and synergy execution: Approximately $50 million of quarterly synergies supported profit, but achieving the three-year $650 million target remains important as integration and restructuring costs continue.
• Divestitures and portfolio actions: Divestitures reduced quarterly sales and adjusted EBIT, while the guidance does not incorporate potential portfolio optimization actions that have not yet been announced.

Summary

Amcor’s reported sales growth was driven mainly by raw-material cost pass-through rather than underlying pricing, while modest volume growth and Berry synergies kept adjusted EBIT broadly stable. The principal pressures were the delayed recovery of energy and distribution costs and a working-capital-driven cash outflow, both of which contributed to higher net debt and a lower transition-period EPS outlook. Cost recovery, cash-flow normalization, synergy delivery, and leverage are the main items to monitor in the next reporting period.