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AptarGroup (ATR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Health Care· May 1, 2026

Source: earnings call transcript

Executive summary

AptarGroup Q1 FY26 — Mixed Performance with Pharma Destocking and Operational Challenges

The first quarter unfolded largely as expected, with reported sales growth benefiting from currency, but core sales were flat due to anticipated emergency medicine destocking. While key areas like injectables and prestige fragrance performed well, the company faced margin pressure from product mix and operational challenges in beauty and closures. Management expects sequential improvements and solid growth across segments in Q2, excluding the emergency medicine impact.

Highlights

5

  • Reported sales increased 11% in Q1 FY26, benefiting from favorable currency movements.

  • Injectables core sales increased 20% in Q1 FY26, driven by strong demand for GLP-1 biologics and antithrombotics.

  • Consumer Healthcare core sales increased 4% in Q1 FY26, primarily due to eye care and nasal decongestant products.

  • Free cash flow more than doubled year-over-year to $53 million for Q1 FY26.

  • Adjusted effective tax rate improved to 22.6% in Q1 FY26 from 25.8% in Q1 FY25 due to a more favorable mix of earnings.

Concerns

5

  • Core sales were flat year-over-year in Q1 FY26, primarily due to anticipated emergency medicine destocking.

  • Adjusted EBITDA margin declined to 19.2% in Q1 FY26 from 20.7% in Q1 FY25, mainly due to less favorable product mix and operational challenges.

  • Pharma core sales decreased 1% in Q1 FY26, negatively impacted by a 3% decline from emergency medicine dispensing systems.

  • Closures adjusted EBITDA margin declined 270 basis points to 13.1% in Q1 FY26 due to maintenance issues, temporary plant closures, and a minority investment write-off.

  • Consolidated gross margins declined by 210 basis points in Q1 FY26 year-over-year.

Guidance & targets

CategoryTargetConfidence
Adjusted EPS
$1.32 to $1.40 per share
high materiality
High
Effective Tax Rate
22.5% to 24.5%
medium materiality
High
Capital Investments
$260 million to $280 million
medium materiality
High
Depreciation and Amortization Expense
$310 million to $320 million
medium materiality
High
Emergency Medicine sales decline
approximately $65 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Pharma
Core sales decreased primarily due to less favorable product mix and the anticipated decline in emergency medicine. Adjusted EBITDA margin decline was anticipated and driven by product mix and volume, due primarily to a decline in high-margin emergency medicine sales, while royalties positively impacted margins.
Emergency medicine sales impact: -3% on core salesPrescription core sales: -10% (impacted by -5% from EM)Consumer Healthcare core sales: +4%Injectables core sales: +20%Active Materials Science Solutions core sales: -1%
—-1%—33.3%
Beauty
Core sales increased with improving volumes. Adjusted EBITDA margin decline due to less favorable product mix in North America and impacts from a supplier fire, though margins improved sequentially from Q4 2025.
Fragrance, facial skin care and color cosmetics core sales: +3%Prestige fragrance pumps sales: double-digit growthPersonal Care core sales: +6%
—+3%—11.1%
Closures
Core sales were impacted by the pass-through of lower resin pricing, despite increased volumes. Adjusted EBITDA margin decline due to maintenance issues, temporary plant closures from extreme weather, and a minority investment write-off.
Food core sales: -3%Beverage core sales: +10%
—flat—13.1%

Product announcements

ProductTypeDetails
Neve (emergency treatment of type 1 allergic reactions)update
AB-rated generic therapeutic equivalent of Ventolinlaunch
[indiscernible] components for injectableslaunch
Ophthalmic dispensing technologylaunch
[indiscernible] on well spread technologylaunch
Prestige fragrance pumplaunch
Spray technology for alcohol-free hybrid and microencapsulated linelaunch
Patented dual dispensing technology with progressive dosagelaunch
Custom actuator on daily air spraylaunch
Dispensing closure for Asian sauceslaunch
Inverted [indiscernible] closures with Simply Squeeze flow control valveslaunch

Deals & partnerships

Enable Injections Integration of Aptar's digital health solutions with Enfuse on-body delivery system.

Aptar's digital health, connected life cycle ready digital solutions integrated with the Enfuse on-body delivery system.

Risks & headwinds

Emergency medicine destocking Q1 FY26, H1 FY26, Full Year 2026

Negatively impacted Pharma core sales by 3% in Q1 FY26. Expected to decline by approximately $65 million in full year 2026, with 2/3 of the impact in H1 FY26.

Mitigation:Expectation for impact to ease in H2 FY26, with clean comparison by Q1 FY27. Pharma ex-emergency medicine expected to return to healthy growth.

Less favorable product mix and operational challenges in Beauty and Closures Q1 FY26

Adjusted EBITDA margin declined to 19.2% in Q1 FY26 from 20.7% in Q1 FY25. Closures adjusted EBITDA margin declined 270 bps to 13.1%. Consolidated gross margins declined 210 bps.

Mitigation:Expect sequential margin improvement in Q2 FY26 and return to normal margins in H2 FY26 for Closures. Beauty margins improved sequentially from Q4 2025.

Increased input costs (raw materials, transportation, energy) due to Middle East conflict Q2 FY26 and beyond

Significantly increased input costs.

Mitigation:Largely passing these higher costs through to customers, supported by index contract clauses for resin. Focus on neutralizing the impact to overall earnings, though margin percentage compression may occur. Increasing raw material safety stock.

Litigation with ARS Pharmaceuticals Ongoing

Legal expenses of approximately $4 million for non-ordinary course litigation in Q1 FY26.

Mitigation:Court denied ARS's motion to dismiss; Aptar filed motion to dismiss or transfer antitrust case.

What to watch in Q2 FY26

Pharma Prescription core sales growth (ex-emergency medicine)

Q2 FY26
Current Less than expected in Q1 FY26
Target Strong growth

Why it matters

Indicates the underlying health and growth trajectory of the Pharma segment outside of the emergency medicine destocking impact.

Clearly, quarter 1 had a very tough comparable but we are already in Q2, expect strong growth in prescription excluding emergency medicine.

Find out whether ATR delivers this. Inve re-checks your case every morning.

Q&A highlights

Are the recent FDA and Health Canada approvals for Neve (emergency treatment for allergic reactions) enough to increase visibility for 2026 earnings?

Stephan Tanda stated that while these approvals are positive proof points for the product's long-term success, no single product, except potentially NARCAN, substantially moves the needle in a single quarter or balance of the year. He expects strong prescription growth for the balance of the year, excluding emergency medicine.

“no single product really moves the needle substantially. I guess the exception is NARCAN in any quarter. And these incremental approvals are more proof points that over time, we expect this to be a successful product, clearly being able to expand the market to children over 30 kilos, I think it is. and additional geographic approvals obviously bode well. But I would not translate that to significant impact on a quarter or even the balance of the year.”

asked by Paul Knight · answered by Stephan Tanda

2 min read 5 chapters

Detailed narrative

CEO Transition and Outlook

Stephan Tanda is set to retire later this year, with Gael Touya assuming the CEO role on September 1. The transition is collaborative, with Touya joining the current earnings call. The company anticipates a solid second quarter, projecting growth across all segments, excluding the impact of emergency medicine destocking, which is expected to diminish in the latter half of the year.

Pharma Segment Performance and Pipeline

The Pharma segment experienced robust demand in areas such as GLP-1 biologics, systemic nasal drug delivery, nasal decongestants, and ophthalmic dispensing. However, core sales saw a 1% decrease, primarily due to a 3% negative impact from emergency medicine dispensing systems destocking. The segment's pipeline is strong, with multiple programs advancing through clinical and regulatory stages, leveraging Aptar's advanced delivery technologies, including Phase II intranasal delivery programs and recent FDA approvals for Neve and a generic Ventolin.

Beauty Segment Trends and Product Launches

Beauty core sales increased by 3%, driven by improved volumes, particularly in prestige fragrance and personal care applications. The segment is innovating to meet evolving consumer preferences for alcohol-free, water-based formulas and skin care-infused fragrances, developing specialized pumps for these needs. Recent product launches include a prestige fragrance pump for Dior Addict, dual dispensing technology for Clarins Double Serum Foundation, and spray technology for a new alcohol-free fragrance line in Europe.

Closures Segment Innovation and Challenges

The Closures segment reported flat core sales, as volume increases were offset by the pass-through of lower resin pricing. Innovation continues with dispensing closures for sauces and inverted closures for single-handed dispensing in personal care and home care. Despite these advancements, the segment's adjusted EBITDA margin declined significantly due to operational challenges, including maintenance issues, temporary plant closures caused by extreme weather, and a minority investment write-off.

Litigation and Cost Management

Aptar provided an update on its ongoing litigation with ARS Pharmaceuticals, noting that the court denied ARS's motion to dismiss, and Aptar has filed a motion to dismiss or transfer the antitrust case. The company is actively managing potential supply chain disruptions and cost volatility, particularly increased input costs from the Middle East conflict. While these costs are largely being passed to customers, the company is focused on neutralizing the dollar impact on earnings and is increasing raw material safety stock to ensure supply security.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.