Sonoco Products Company (SON) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales were $1.9 billion, down 1.3% year-over-year mainly due to the ThermoSafe divestiture, but adjusted net income rose 10.6% to $151 million ($1.51 per share), and operating cash flow reached a record $301 million, up 56% year-over-year.

• Productivity and cost control initiatives offset inflation and logistics pressures, contributing $16 million to operating profit and supporting margin stability.

• Industrial segment operating profit rose 4% year-over-year and 29% sequentially, while Consumer segment profit was down 5% year-over-year but up 22% sequentially.

• Strong demand in North American URB mills (utilization at 95%) and robust growth in reels volumes, driven by infrastructure and AI data center investments.

• Global inflation, especially energy and freight, impacted operating profit by $10 million, but recovery mechanisms and pricing actions are in place.

Financial highlights

• Net sales for Q2 2026 were $1.9 billion, down 1.3% year-over-year; adjusted EBITDA was $324 million, down 1.2%; adjusted EPS rose to $1.51, up 10.2% year-over-year.

• Adjusted EBITDA margin held steady at 17.2%; gross profit margin was 20.8%.

• Operating cash flow was $301 million, up 56% year-over-year; free cash flow was $237 million, up 139%.

• Effective tax rate for Q2 2026 was 23.8% (adjusted).

• Cash and cash equivalents stood at $169 million as of June 28, 2026; total debt was $4.5 billion.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: net sales $7.25–$7.75 billion, adjusted EBITDA $1.25–$1.35 billion, adjusted EPS $5.80–$6.20 (toward low end), and operating cash flow $700–$800 million.

• Management expects improved margin performance as pricing actions and contract resets take effect, with ongoing productivity initiatives supporting long-term margin improvement.

• Q3 is expected to be the most critical quarter, with strong pack season indicators and margin recovery from inflation pass-throughs.

• Low to mid-single digit volume growth expected in consumer, low single digits in industrial for the second half.

• Persistent inflation in input, energy, and logistics costs is expected in H2 2026, but cost recovery actions are in place.