Greif Q4 Adjusted EPS Rises 50%, FY2027 EBITDA Low End Set at $645 Million

Greif (NYSE: GEF) reported a 50% increase in adjusted Class A earnings per share for its fiscal fourth quarter, even as adjusted EBITDA declined on a difficult prior-year comparison. The packaging company also set the low end of its fiscal 2027 outlook at $645 million of adjusted EBITDA and $290 million of adjusted free cash flow, supported by further cost optimization but tempered by soft industrial demand and expected cost pressures.

Fourth-quarter adjusted Class A earnings rose to $0.87 per share from $0.58 a year earlier. Greif attributed the increase to lower interest expense following balance-sheet strengthening, lower tax expense and the effect of share repurchases.

Adjusted EBITDA decreased 3.1% to $163.0 million from $168.2 million, while the adjusted EBITDA margin narrowed to 14.3% from 15.4%. The prior-year quarter included an $18.2 million benefit from the timing of incentive-accrual changes. Excluding that item, Greif said adjusted EBITDA increased by $13.0 million, or 8.7%.

Adjusted free cash flow fell to $83.3 million from $172.7 million. The company cited the inclusion of Containerboard cash flows in the prior-year period, higher cash taxes and continued inventory actions intended to ensure supply.

For the full fiscal year, adjusted EBITDA increased 11.7% to $626 million, while adjusted earnings per share rose 74.9%. Greif ended fiscal 2026 with a leverage ratio of 1.2 times, compared with about 3.5 times in fiscal 2024, and repurchased $225 million of shares during the year, representing approximately 6% of shares outstanding.

Mixed performance across packaging businesses

Customized Polymer Solutions generated fourth-quarter sales of $361.9 million, up from $322.7 million. Gross profit increased slightly to $71.4 million, but the gross margin declined to 19.7% from 21.8% as product mix and higher resin costs offset favorable pricing. Intermediate bulk container volumes increased by a high-single-digit percentage, while large-plastics volumes declined by a low-single-digit rate and small-plastics volumes fell by a low-double-digit rate. Greif said small-plastics demand was affected by customer destocking linked to higher resin costs and unfavorable weather during the agricultural season.

Durable Metal Solutions sales were nearly unchanged at $392.5 million, compared with $391.9 million a year earlier. Gross profit rose to $84.7 million from $83.6 million, and the gross margin improved to 21.6% from 21.3%, reflecting favorable price-cost dynamics that were partly offset by lower volumes. Demand remained soft across all regions because of continued weakness in industrial end markets.

Sustainable Fiber Solutions posted sales of $360.1 million, up from $355.2 million, as an April price increase of $60 per ton flowed through results. Gross profit slipped to $84.1 million from $85.1 million, and the margin fell to 23.4% from 24.0%. Greif attributed the decline to delayed September recognition of another $60-per-ton increase announced in June. Mills operated at approximately 95% of capacity, with volumes rising by a low-single-digit percentage on solid converting demand from paper, film and construction cores.

Innovative Closure Solutions reported total sales, including intersegment sales, of $48.1 million, up from $41.2 million. Gross profit increased to $14.4 million from $10.3 million, while the gross margin expanded to 29.9% from 25.0% on pricing, product mix and cost optimization. Third-party and total volumes nevertheless declined by a mid-single-digit percentage.

Fiscal 2027 outlook emphasizes cost savings

Greif’s fiscal 2027 low-end guidance calls for adjusted EBITDA of $645 million, about 3% above the fiscal 2026 result, and adjusted free cash flow of $290 million. The outlook assumes flat volumes in Customized Polymer Solutions, Sustainable Fiber Solutions and Innovative Closure Solutions, along with a low-single-digit decline in Durable Metal Solutions volumes.

The company’s EBITDA bridge includes a $60 million contribution from acquisitions and closures and a $10 million volume benefit. Those factors are expected to be partly offset by $5 million from price and raw-material costs, $11 million from transportation and manufacturing inflation, $15 million from selling, general and administrative expenses, and $20 million from foreign exchange.

Greif expects fiscal 2027 adjusted capital expenditures of $185 million, with investments focused on organic growth in Polymers and Closures and operational-efficiency improvements in Fiber and Metals. Other free-cash-flow assumptions include $235 million of depreciation, depletion and amortization, $50 million of cash interest expense, $80 million of cash taxes and $40 million of cash restructuring, pension and other costs.

Management increased its fiscal 2027 run-rate cost-savings commitment to $150 million, from $105 million achieved at the end of fiscal 2026 and $50 million at the end of fiscal 2025. The program covers SG&A rationalization, network optimization and operating-efficiency gains. Greif said it intends to keep leverage below 2.0 times while funding organic projects, pursuing disciplined bolt-on acquisitions, paying growing dividends and targeting annual share repurchases of approximately 2%.

The outlook remains subject to several operating pressures identified in the presentation, including weak industrial demand, regional and end-market volume variability, resin-driven customer destocking, weather effects, manufacturing and transportation inflation, and foreign-exchange headwinds. The company’s fiscal 2027 assumptions also do not incorporate a broad volume recovery, with three segments expected to remain flat and Metals projected to decline.