Graphic Packaging has said that the first quarter 2025 performance did not meet anticipated targets amidst a tough economic landscape and shifting consumer dynamics.

The company reported a 23% decrease in net income for the Q1 FY25, which fell to $127m compared to $165m in the corresponding period of the previous year.

The firm also experienced a reduction in earnings per share, which dropped to $0.42 from $0.53 during the first quarter of fiscal year 2024.

Net income for both quarters was influenced by certain one-time charges and the amortisation of acquired intangible assets, amounting to $27m in Q1 2025 and $38m in Q1 2024.

Net sales for Graphic Packaging in the quarter decreased by 6% to $2.12bn from $2.26bn in the same quarter of the previous year.

This decline was attributed to a combination of factors: a $110m effect due to the sale of the Augusta, GA bleached paperboard manufacturing facility, a decrease in open market sales, and a $27m negative impact from foreign exchange fluctuations. Although there was slight pressure on prices, this was counterbalanced by a small increase in volume.

The company observed a 3% increase in packaging volumes in its international business and 1% reduction within the Americas during Q1 FY25.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter increased by 17% to $353m. When adjusting for business combinations and other special items, adjusted EBITDA stood at $365m compared to $443m in the prior year's quarter.

The adjusted EBITDA margin for the first quarter was reported at 17.2% in 2025 and was higher at 19.6% in 2024.

Graphic Packaging's total debt, encompassing long-term, short-term, and current portions, rose by $526m during Q1 to reach $5.74bn from Q4 2024. Similarly, net debt increased by $554m during this period to $5.61bn.

The company has broadened its guidance range due to increased uncertainty surrounding macroeconomic conditions and consumer spending patterns.

In full year 2025, it anticipates net sales to range between $8.2bn and $8.5bn, with adjusted EBITDA ranging from $1.4bn to $1.6bn.

These projections are adjusted based on expectations of a 2% volume decrease and an approximate input cost inflation of $80m at midpoint.

Capital expenditures for the full year are projected to be around $700m as Graphic Packaging nears completion of its recycled paperboard investment in Waco, Texas later within the year.

Last month, the company revealed plans to shut its coated recycled paperboard manufacturing plant in Middletown, Ohio, US.

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"Graphic Packaging adjusts guidance as Q1 FY25 miss expectations" was originally created and published by Packaging Gateway, a GlobalData owned brand.

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