Sonoco Posts $829 Million Goodwill Impairment

The Tip Desk · October 26, 2026 · 4 min read

The packaging company booked an $829 million non-cash goodwill impairment and cut 2026 adjusted EPS guidance to $5.30–$5.50 after a $732 million GAAP net loss.

Sonoco Products Company (SON), a global packaging company, reported a GAAP net loss of $732 million, or $7.36 a share, for the third quarter ended September 27, 2026, after taking an $829 million non-cash goodwill impairment on its Consumer EMEA/APAC and Industrial APAC businesses. A year earlier the company had earned $123 million, or $1.23 a share.

Adjusted results also declined. Adjusted net income was $167 million, down 12.5% from $191 million in the year-ago quarter, while adjusted EPS fell 13.0% to $1.67 from $1.92. Adjusted operating profit fell 13.1% to $268 million and adjusted EBITDA fell 9.0% to $352 million.

Net sales were $2.04 billion, down 4.2% from the year-ago quarter, driven primarily by the November 3, 2025 sale of the ThermoSafe business. Excluding divestitures, net sales were essentially flat. The company said higher selling prices implemented to offset inflation and tariffs were partially offset by lower volume/mix.

GAAP operating loss was $638 million, including $802 million of goodwill impairment in Consumer Packaging’s EMEA/APAC businesses and $27 million in Industrial Paper Packaging’s APAC business. The company said solid productivity savings from fixed-cost reduction and procurement were more than offset by significant price/cost headwinds and lower volume/mix. President and Chief Executive Officer Howard Coker said drought conditions across parts of Europe and the U.S. impacted crop yields and pressured food-can demand, and that inflation on raw materials, freight, energy and other operating costs exceeded expectations.

Consumer Packaging net sales were $1.396 billion, down 2.9% year over year. Adverse weather cut seasonal vegetable harvests in EMEA and the Americas and reduced metal-can volumes. The company said that headwind more than offset pricing actions implemented to recover inflation and tariff-related costs, and that foreign exchange also negatively affected sales. Segment operating profit fell 14.6% to $179 million and operating margin compressed to 12.8% from 14.5%. Adjusted EBITDA was $237 million, with margin at 17.0% versus 18.0%. Volume/mix declined 3% year over year. Coker said international paper-can operations posted double-digit volume growth on snack demand in emerging markets.

Industrial Paper Packaging net sales increased 5.2% to $646 million, primarily from pricing to offset rising costs. Segment operating profit declined 6.2% to $88 million and operating margin was 13.6% versus 15.3% a year earlier; adjusted EBITDA was $122 million with margin of 18.8% versus 20.8%. The company said results were essentially in line with the second quarter, North America URB trade ton sales increased 10% year over year, and mill utilization was 94%. Effective January 1, 2026, Industrial Plastics was folded into Industrial Paper Packaging and the company stopped reporting the All Other group.

Operating cash flow was $285 million in the third quarter. Year-to-date operating cash flow was $218 million versus $277 million in the same period of 2025, net of about $103 million of one-time taxes on 2025 TFP and ThermoSafe sale gains. Free cash flow for the nine months was $43 million versus $29 million a year earlier. Total debt and net debt were $4.3 billion and $4.1 billion at September 27, 2026. Liquidity was $1.3 billion. On September 25, 2026 the company added $800 million of new term-loan facilities, drew $500 million to refinance an existing $500 million term loan maturing in 2028, and retained $300 million of delayed-draw capacity usable within 12 months.

Full-year 2026 guidance calls for net sales of $7.20 billion to $7.40 billion, with revised targets of $5.30 to $5.50 for adjusted EPS and $1.20 billion to $1.25 billion for adjusted EBITDA. Cash flow from operating activities was adjusted to $600 million to $650 million, including prior-year taxes on divestiture gains and restructuring costs. Coker said third-quarter performance fell short of expectations and that the company is taking targeted actions through its Profitability Performance Plan. For the fourth quarter, the company expects continued strong Industrial performance on robust North America URB demand, more stable Consumer performance from international paper-can growth and a more balanced aerosol and food-can mix, and recovering raw-material, freight, energy and other costs as a priority.