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    ATR
    Earnings call· Jun 2026(Q2 FY26)

    APTARGROUP Q2 FY26 earnings call ATR

    Jul 31, 2026 Source

    Executive summary

    AptarGroup Q2 FY26 — Adjusted EPS above guidance, strong Pharma performance

    AptarGroup delivered Q2 FY26 adjusted EPS above guidance, primarily due to strong Pharma segment performance, particularly in injectables and consumer healthcare, offsetting anticipated declines in emergency medicine. While all segments achieved positive sales growth, profitability was pressured by unfavorable product mix and operational challenges in Beauty and Closures, which are expected to progressively improve. The company remains confident in its long-term growth prospects, focusing on disciplined execution and strategic resource allocation under new leadership.

    Highlights

    5

    • All three segments delivered positive sales growth in Q2 FY26.

    • Adjusted EPS of $1.42 was above the guidance range, driven by better-than-expected Pharma performance.

    • Pharma segment core sales, excluding emergency medicine, grew by 8% in Q2 FY26.

    • Beauty segment benefited from double-digit core sales growth in prestige fragrance.

    • Closures segment saw strong beverage demand, particularly in bottled water, leading to 14% core sales growth in beverages.

    Concerns

    5

    • Adjusted EBITDA decreased 3% to $213 million, with adjusted EBITDA margin declining to 20.7% from 22.6% YoY, primarily due to less favorable product mix and operational challenges in Beauty and Closures.

    • Adjusted EPS of $1.42 was down 15% year-over-year at comparable exchange rates, impacted by lower emergency medicine sales, operational issues, and higher depreciation/amortization and interest expense.

    • Pharma core sales were impacted by an anticipated $65 million decrease in emergency medicine sales for FY26, with approximately two-thirds incurred in H1 FY26.

    • Beauty's adjusted EBITDA margin declined 190 basis points year-over-year to 12.2%, attributed to lower product volumes, unfavorable mix, and timing of resin pass-throughs.

    • Closures' adjusted EBITDA margin declined 200 basis points year-over-year to 14.9%, temporarily impacted by new production line ramp-up and maintenance initiatives.

    Guidance & targets

    5
    CategoryTargetConfidence
    Adjusted EPS
    $1.45 to $1.53
    high materiality
    High
    Capital investments
    $260 million to $280 million
    medium materiality
    High
    Depreciation and Amortization expense
    $310 million and $320 million
    medium materiality
    High
    Emergency medicine sales decline
    approximately $65 million
    high materiality
    High
    Pharma core sales growth
    7% to 11%
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Pharma
    Impacted by anticipated decline in emergency medicine sales. Margin decline of 180 bps YoY due to unfavorable product mix from emergency medicine decline; royalties and productivity initiatives positively impacted margins. Excluding emergency medicine, adjusted EBITDA margin would have improved YoY.
    Core sales growth (excluding emergency medicine): 8%Prescription core sales growth (excluding emergency medicine): 8%Consumer Healthcare core sales growth: 15%Injectables core sales growth: 9%Active Material Science core sales growth: -2%
    		—1% core sales growth—33.6% adjusted EBITDA margin
    Beauty
    Demand for beauty dispensing systems and pass-through of higher input costs compensated for lower tooling sales. Margin declined 190 bps YoY due to lower product volumes, unfavorable mix, and timing of resin pass-throughs. Sequentially improved from prior quarter.
    Fragrance, facial skin care and color cosmetics core sales growth: 2%Personal Care core sales growth: 0%
    		—1% core sales growth—12.2% adjusted EBITDA margin
    Closures
    Strong volume growth in beverages and pass-through of higher input costs compensated for lower tooling sales. Margin declined 200 bps YoY due to ramp-up of new production lines and ongoing maintenance initiatives.
    Food core sales growth: -1%Beverage core sales growth: 14%
    		—4% core sales growth—14.9% adjusted EBITDA margin

    Operational metrics

    12
    Adjusted EBITDA
    $213 milliondecreased 3% from prior year
    Q2 FY26

    Primarily due to less favorable product mix and ongoing operational challenges in Beauty and Closures.

    Adjusted EBITDA Margin
    20.7%compared to 22.6% in prior year
    Q2 FY26

    Primarily due to less favorable product mix and ongoing operational challenges in Beauty and Closures.

    Adjusted EPS
    $1.42down 15% year-over-year at comparable exchange rates
    Q2 FY26

    Compared to $1.68 in prior year. Due to lower sales of emergency medicine, operational issues in Beauty and Closures, higher D&A, and increased interest expense.

    SG&A as percentage of sales
    15.4%decreased 20 basis points year-over-year
    Q2 FY26

    Compared to 15.6% in Q2 2021 (likely ASR error, should be Q2 2025). Includes approximately $4 million in legal expenses for nonordinary course litigation.

    Effective Tax Rate
    23.7%compared to prior year's 20%
    Q2 FY26

    Prior year benefited from deferred tax benefit realization and greater excess tax benefits from share-based compensation.

    Cash Balance
    $190 million
    Q2 FY26 end
    Net Debt
    $1.2 billion
    Q2 FY26 end
    Leverage Ratio (Net Debt to EBITDA)
    1.49x
    Q2 FY26 end

    Reflects a very strong balance sheet.

    Share Repurchases
    $150 million
    YTD FY26

    Part of $212 million returned to shareholders through repurchases and dividends.

    Total Shareholder Returns
    $212 million
    YTD FY26
    Resin Pass-through Impact on Beauty Margin
    90 basis points
    Q2 FY26

    Detriment due to delayed pass-through, expected to be resolved in Q3.

    FX Impact on EPS
    $0.02quarter-over-quarter headwind
    Q3 FY26

    Based on an assumed euro to U.S. dollar exchange rate of 1.14.

    Industry KPIs

    7
    MetricValueDetails
    Dividends$212 millionUSD
    Share buyback$150 millionUSD
    Net debt leverage1.49xx
    CAPEX capital program$260 million to $280 millionUSD
    Volume production growth1% core sales growth%
    End market demand driversStrong demand
    Adjusted underlying EBITDA$213 millionUSD

    Product announcements

    4
    ProductTypeDetails
    auto-loading dosing TROP technologylaunch
    Prestige fragrance pumplaunch
    Tap Top Closurelaunch
    SimpliSqueeze valve closurelaunch

    Deals & partnerships

    2
    Eli LillyAcquisition of a company focused on an intranasal therapy for treatment-resistant depression.

    The acquired company's program has received FDA breakthrough therapy designation and begun initiating Phase III trials. Aptar believes this highlights a broader trend in nasal delivery.

    different PFS players in the marketCollaborative system framework for injectable therapies.

    Provides customers with earlier insight into assembled system performance for injectable therapies, making validation and qualification easier by working with different pre-filled syringe (PFS) players for fully integrated validation.

    Risks & headwinds

    7
    Anticipated decline in emergency medicine salesFY26, with two-thirds incurred in H1 (majority in Q2), and remaining one-third in H2 (primarily Q3). Expected to abate by Q4.

    Approximately $65 million decrease in fiscal year 2026.

    Mitigation: Focus on resilience of the broader Pharma portfolio, which grew 8% excluding emergency medicine.

    Less favorable product mixQ2 FY26

    Contributed to 3% decrease in adjusted EBITDA and 190 bps decline in Beauty adjusted EBITDA margin.

    Mitigation: Expectation of progressive improvement in Beauty and Closures.

    Ongoing operational challenges in Beauty and ClosuresQ2 FY26, with progressive improvement since beginning of the year.

    Contributed to 3% decrease in adjusted EBITDA and 190 bps decline in Beauty adjusted EBITDA margin, and 200 bps decline in Closures adjusted EBITDA margin.

    Mitigation: Progressive improvement expected as maintenance issues abate and new production lines ramp up. Management is re-engaging with businesses to address shortfalls.

    Higher input costs (e.g., resin) due to recent conflicts in the Middle EastQ2 FY26 and ongoing.

    Largely offset through customer pass-throughs, but with some timing lag in Beauty (90 bps margin detriment in Q2).

    Mitigation: Monitoring the situation closely and taking appropriate pricing actions to offset higher costs. Expected resolution of Beauty lag in Q3.

    Higher depreciation and amortization expensesQ2 FY26

    Contributed to 15% YoY decrease in adjusted EPS.

    Mitigation: Associated with capital investments and acquisitions, implying a long-term benefit.

    Increased interest expenseQ2 FY26

    Contributed to 15% YoY decrease in adjusted EPS.

    Mitigation: Due to higher interest rates and a higher average debt balance, but company maintains a strong balance sheet with 1.49x leverage ratio.

    Ongoing litigation against ARS PharmaceuticalsOngoing

    Approximately $4 million in legal expenses in Q2 FY26.

    Mitigation: Favorable court ruling received, allowing Aptar to continue pursuing claims and consolidating related matters in a single jurisdiction, reinforcing IP protection.

    What to watch in Q3 FY26

    5

    Beauty Segment Adjusted EBITDA Margin

    Q3 FY26
    Current12.2%
    TargetImprovement from Q2 levels

    Why it matters

    Recovery in Beauty segment profitability is crucial for overall company margin improvement and addresses a long-standing operational concern.

    Beauty's adjusted EBITDA margin for the quarter was 12.2%, and which, while improved sequentially from the prior quarter, represented a decline of 190 basis points year-over-year. This was primarily attributed to lower product volumes, unfavorable mix and the timing of📎 resin pass-throughs.

    Q&A highlights

    5

    Asked about observed weakness in the Brazilian market for Beauty/Personal Care and when the Beauty segment is expected to achieve sustained volume and earnings growth, given its historical lag.

    Stephan Tanda confirmed weak sales in Brazil due to cyclical factors and customer share shifts. He acknowledged Beauty's bottom-line performance as an area for improvement, noting Europe and Asia segments perform well, but Americas (North America and Brazil) face operational issues. Gael Touya stated he is re-engaging with the business and customers to build on strengths, adjust where needed, and focus on delivering commitments and future growth.

    “On the 1 hand, we're very proud with the turnaround we've achieved in Europe, and I won't repeat all the things we did with shutting down plants, improving cost base and Europe is firmly in the target range. Asia has done very well and is well above that. But we have fallen short in the Americas for different reasons.”

    asked by George Staphos · answered by Stephan Tanda

    2 min read8 chapters

    Detailed Narrative

    01

    CEO Transition and Leadership Outlook

    Stephan Tanda is retiring as CEO, with Gael Touya assuming the role on September 1. Tanda expressed pride in the company's accomplishments and confidence in Touya's leadership, highlighting Aptar's strong culture and focus on execution and innovation. Touya emphasized his commitment to profitable growth, disciplined execution, and thoughtful resource allocation, aiming to build on the strong foundation left by his predecessor.

    02

    Pharma Innovation and Pipeline Strength

    Aptar continues to strengthen its Pharma pipeline through expanded capabilities in formulation development, analytical services, and regulatory support. Key advancements include patent applications for inhaled and nasal GLP-1 therapies, approval of the U.S. patent for NSORP technology to address nitrosamine impurities, and a collaborative system framework for injectable therapies. These initiatives aim to accelerate development timelines and enhance patient safety.

    03

    Respiratory Health and Next-Gen Propellants

    The company's PMDI platform received FDA approvals for asthma and COPD therapies, validating its performance. A significant milestone was the U.K. approval of the world's first PMDI utilizing HFA 152A, a low global warming potential propellant, following Aptar's collaboration with the FDA on next-generation propellant research. This development supports expanded patient access while reducing environmental impact.

    04

    Nasal Delivery Expansion

    Aptar sees growing interest in nasal delivery across therapeutic areas beyond allergy and migraine, including central nervous system disorders. Eli Lilly's acquisition of a company focused on an intranasal therapy for treatment-resistant depression highlights this trend, confirming the potential for rapid onset and direct CNS access.

    05

    Generic Inhaled Therapies Regulatory Shift

    The FDA updated guidance for generic inhaled therapies, removing certain clinical study and bioequivalence testing requirements. Aptar views this as a positive development, expecting more efficient market entry for generic inhaled products and validating its scientific expertise from FDA collaboration.

    06

    Sustainability Achievements

    Aptar was named a CDP supplier engagement leader for the sixth consecutive year and recognized by Time magazine as one of the world's most sustainable companies for the third consecutive year. The company also ranked in the top 5 nationwide in engineering, manufacturing, and medical technology, and top 10 for sustainability and transparency in Time's inaugural "America's Best Companies 2026" list.

    07

    Litigation Update

    Aptar received a favorable court ruling in its litigation against ARS Pharmaceuticals regarding proprietary nasal drug delivery technology. The court granted Aptar's motion to amend the complaint and denied ARS's motion to dismiss, also transferring ARS's California action to New York, consolidating related matters in a single jurisdiction. This is viewed as a positive step in protecting intellectual property.

    08

    Operational Improvements and Cost Management

    Despite some ongoing operational challenges in Beauty and Closures, the company noted progressive improvement from Q1. SG&A as a percentage of sales decreased by 20 basis points year-over-year to 15.4%, even with $4 million in legal expenses for non-ordinary course litigation. These efforts contributed to adjusted EPS exceeding guidance.

    AI-generated summary of the company’s earnings call. Not investment advice.