SW · Q1 2026 Earnings

Cautious

Smurfit Westrock

Reported April 30, 2026

30-second summary

30-second take: Q1 FY2026 revenue of $7.71B (+0.7% YoY) and adjusted EBITDA of $1,076M (14.0% margin) landed at the bottom of the $1.1–1.2B guide management gave in February — a soft miss that the press release does not flag, though management calls out a $65M adverse weather impact (primarily North America) that, added back, would put underlying EBITDA at ~$1,141M, inside the range. FY2026 EBITDA was reaffirmed at $5.0–5.3B (not raised), and Q2 FY2026 was guided to $1.1–1.2B, meaning the year is now explicitly back-loaded with management telling investors to expect volume growth "in the second half." North America revenue fell 3.6% YoY and segment EBITDA margin compressed to 13.3% — below Q4's 14.7% — which directly contradicts last quarter's watch-list expectation that margin would recover once Q4 downtime rolled off.

Headline numbers

EPS

Q1 FY2026

$0.33

Revenue

Q1 FY2026

$7.71B

+0.7% YoY

Gross margin

Q1 FY2026

16.5%

Operating margin

Q1 FY2026

3.3%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$7.71B	+0.7%	$7.58B	+1.7%
EPS	$0.33	—	$0.34	-2.9%
Gross margin	16.5%	—	18.2%	-170bps
Operating margin	3.3%	—	5.1%	-180bps

Guidance

Company reaffirms full-year FY2026 Adjusted EBITDA guidance of $5.0B–$5.3B and delivers Q1 results at the low end of expected range; Q2 forward guidance provided with expected low-to-mid single-digit YoY growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EBITDA	Q1 FY2026	$1.1 billion to $1.2 billion	$1.076 billion	in-line (at low end of range)	Met

New guidance

Metric	Period	Guide	YoY
Adjusted EBITDA	Q2 FY2026	$1.1 billion to $1.2 billion	+3-5% YoY

Reaffirmed unchanged this quarter: Adjusted EBITDA ($5.0 billion to $5.3 billion)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
North America	$4.502B	-3.6%
Europe, MEA and APAC	$2.771B	+7.3%
LATAM	$0.54B	+5.2%
North America Adjusted EBITDA Margin	13.3%	—
Europe, MEA and APAC Adjusted EBITDA Margin	15.2%	—
LATAM Adjusted EBITDA Margin	20.2%	—

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Adjusted EBITDA	$1,076 million
Adjusted EBITDA Margin	14.0%
Operating Cash Flow	$204 million
Containerboard Pricing (North America)	$20 per ton increase in Q1; $30 per ton increase implemented in April
New Corrugated Customers Onboarded	600+ customers

Management tone

Q2 FY2025 anchor → Q3 FY2025 anchor → Q4 FY2025 anchor → Q1 FY2026 anchor: "Integration offense" → "Structural progress, cyclical caution" → "Better operating environment ahead" → "Back-loaded year with pricing as the bridge"

The "better industry operating environment" framing from Q4 FY2025 has been quietly recalibrated into "we expect volume growth in the second half of the year." Three quarters ago management was talking about a Q3 hit-the-number quarter; two quarters ago about an FY2026 set up by structural progress; last quarter about the operating environment being directionally better. This quarter the message tightened to "we expect volume growth in the second half of the year" — an explicit acknowledgment that H1 is not delivering it. Combined with the Q1 FY2026 print at the floor and Q2 FY2026 guided to the same range, the FY2026 reaffirmation now relies entirely on H2 pricing flow-through. The bull case has narrowed.

The cost outlook deteriorated materially since February, but the FY guide held — implying offsetting upside management isn't yet naming. On the call, Ken revised the full-year energy cost impact from $80M (February estimate) to $270–290M — a $190–210M deterioration. Freight was flagged as a "decent impact" carrying through the year, with "slight relief" on labor and OCC, neither quantified. Energy alone is roughly $190–210M of incremental cost since February versus an unchanged FY EBITDA range. Either pricing is now expected to do meaningfully more than February assumed, or volume is expected to recover harder than implied, or there is buffer being held back. The most likely explanation given Tony's emphasis on the $50/ton April and second $50/ton June announcements is pricing — but pricing flowing through with a 3–6 month lag concentrates the bet on Q4.

The export-market tightening commentary is the most genuinely new positive disclosure. Tony's statement that US containerboard shipments to Latin America are down 30% and that European paper is "now unavailable until Sept/Oct" versus deeply discounted three months ago is a substantive shift in the global supply-demand backdrop. This supports the pricing thesis but only matters to the FY2026 print if the price increases actually stick.

The volume-decline trajectory is improving and management chose to quantify it. Tony walked through Q4 FY2025 -8.5%, Q1 FY2026 -7%, April -4%, with April new-customer volume +30% vs March. That is a falsifiable progression and the cleanest piece of evidence for the H2 thesis. The owner-operator model proof point Tony cited — a Latin American facility going from -$20M on 350M sq meters to +$15M on 280M sq meters — is the kind of specific data point that gives the structural narrative credibility independent of the price cycle.

Q&A highlights

George Staffos · Bank of America Securities

Asked about implications of unplanned downtime in North America mill system and whether pricing actions might lead to demand weakness; also asked about dimensionalizing margin impact of 600+ new corrugated customers won

Tony stated unplanned downtime was due to February mill issues (electrical outage) and not structural concerns; expects no material Q2 downtime. Emphasized he has not seen demand shift in his long career; all paper grades are sold-out with very strong April order books. New customer wins continue strongly with April volumes 30% up on March. Comfortable with margins on incoming business despite difficult comparators.

Unplanned downtime in Q1 concentrated in February onlyNo material downtime anticipated in Q2Over 600 new corrugated customers won in Q1April new customer volume 30% higher than March

Philip NG · Jefferies LLC

Asked about gas hedging levels for next quarters; timing of box price implementation lag and ability to drive earnings growth in Q2-Q3; announced UK mill closure implications for supply arrangements and cost structure

Ken stated Q2 is ~50% hedged on gas; Q3-Q4 roughly one-third each. Tony explained converted product price increases will show minor uptick in Q2, with Q3-Q4 showing full implementation as contracts (3-6 month lag) flow through. On UK mill closure: Tony stated it was highest/among highest-cost mill with wrong width for long-term viability; supply arrangements secured internally and externally before announcement; mill was not worth investing in despite its role in UK/Irish supply

Q2 gas hedging: ~50%Q3-Q4 gas hedging: ~33% eachQ2 converted product price increases: minor uptickQ3-Q4: full implementation of paper and converted product price increases

Gabe Hyde · Wells Fargo

Asked about embedding of June price increase announcement into Q2 outlook; requested update on key input tailwinds/headwinds vs February guidance; also asked about export market dynamics in container board

Tony stated $50/ton price increase announced few days prior not fully bedded into forecasts, similar to cost increases not fully embedded. Ken revised energy cost guidance significantly upward from $80M to $270-290M full-year impact (from February estimate). Also noted increased freight costs, slight labor and OCC relief. Tony explained global container board markets have seen capacity exits; export markets have tightened dramatically with US paper shipments to Latin America down 30% and European paper now unavailable until Sept/Oct vs discounted prices months ago

Energy cost guidance revised: $80M (February) → $270-290M (May) full-year impactFreight headwind: estimated $50M for full yearLabor: headwind improved from ~$100M to ~$50MOCC: slight relief from February estimate

Mike Roxland · Truist Securities

Asked what is driving improved demand despite consumer stretch; requested monthly volume progression in Q1 North America and April buyer behavior; asked about available levers to offset transitory costs and ability to accelerate cost takeout programs

Tony noted volume declines moderating (Q4: -8.5%, Q1: -7%, April: -4%) with significant new customer wins and improved people quality. Emphasized cultural transformation and owner-operator model benefits. Ken attributed demand to supply chain normalization, returning need for shelf replenishment, security of supply emphasis, and seasonal patterns (April-Nov busier). On cost offsets: Tony stated active annual cost-takeout programs at plant level to offset wage inflation; volatile cost areas (energy) trigger acceleration of existing projects; multi-year efficiency projects coming online; emphasis on examining all P&L items

Volume trajectory: Q4 -8.5%, Q1 -7%, April -4%Over 600 new customers in Q1, 30% volume increase April vs MarchOwner-operator model attracting talent and improving cultureStrong seasonal demand April-November expected

Detlef Winkelmann · J.P. Morgan

Asked about price-cost recovery in Europe and US assuming no second $50/ton increase; seeking clarity on whether Europe has recovered more than cost inflation and US has matched it

Ken explained price increases in Europe are recent and take time to flow through integrated system; noted Q2 cost pressures include higher energy, ~$20M recovered fiber increase, ~$10M freight increase, but offset by ~$40M lower downtime year-over-year. Tony added context that no price increases were followed in October or February because conditions weren't viable; but now with improved demand and order books, increases are justified; European competition severely underwater and Smurfit has won significant new business on innovation and service

Recovered fiber headwind Q2: ~$20MFreight headwind Q2: ~$10MEnergy continuing to hit harder in Q2Downtime benefit Q2: ~$40M lower year-over-year

Answers to last quarter's watch list

The February medium-term plan delivery of the "additional $400M+" synergy quantification. The Q1 FY2026 press release does not contain specific incremental synergy figures beyond reaffirming the prior framing. The transcript Q&A does not address synergy quantification directly. The bull case quantification continues to be deferred.

Continue monitoring

Whether FY2026 capex of $2.4–2.5B is reiterated, raised, or stepped down. The Q1 FY2026 press release does not address FY2026 capex specifically. The figure has now been omitted from both the Q4 FY2025 print and the Q1 FY2026 print without resolution.

Continue monitoring

Q1 FY2026 actual landing inside the $1.1–1.2B guide. Q1 FY2026 came in at $1.076B — below the $1.1B floor of the guide. The FY2026 midpoint of $5.15B implied roughly $4.07B over Q2–Q4 (~$1.36B per quarter), and now requires that off a softer start.

Resolved negatively

North America EBITDA margin recovery from Q4 FY2025's 14.7%. Margin compressed further to 13.3% in Q1 FY2026, attributed to a discrete February mill outage. The expected post-Q4-downtime recovery did not materialize; Q2 FY2026 with no material downtime planned is the clean re-test.

Resolved negatively

Whether buyback capacity from 2027 onwards gets paired with a specific authorization size. The Q1 FY2026 press release does not address buyback dimensioning.

Continue monitoring

Leverage progression from 2.6x toward 2.0x target through 1H FY2026. The Q1 FY2026 press release does not provide an updated leverage ratio; with Q1 FY2026 operating cash flow of only $204M and continued capex, deleveraging pace through 1H is likely modest.

Continue monitoring

What to watch into next quarter

Q2 FY2026 adjusted EBITDA delivery inside the $1.1–1.2B guide with no material downtime planned. With the February electrical outage now behind, a Q2 FY2026 print at or below $1.1B would signal the H1 weakness is structural rather than discrete, and the FY2026 range would be at acute risk.

North America EBITDA margin recovery into the mid-teens. Q1 FY2026's 13.3% in a quarter without major planned downtime is the data point that most threatens the FY2026 midpoint; Q2 FY2026 needs to step back toward Q4 FY2025's 14.7% or higher to keep the back-half thesis intact.

Whether the $50/ton April and second $50/ton June North American containerboard price increases stick through Q3 FY2026. Tony framed July 1 implementation for the first $50/ton and September for the second. If both flow through, the FY2026 reaffirmation is supported even with the ~$190–210M of net energy cost deterioration since February.

Volume trajectory beyond April -4%. Tony's Q4 FY2025 -8.5% → Q1 FY2026 -7% → April -4% progression needs to extend into May–July prints in low-single-digit-down or flat territory to validate the "H2 volume growth" guide language.

Updated FY2026 energy headwind disclosure on the Q2 FY2026 call. The $80M → $270–290M revision is the largest single bridge item; whether this stabilizes or deteriorates further drives the FY2026 EBITDA distribution within the range.

Whether FY2026 capex of $2.4–2.5B is finally re-anchored. Two prints in a row without this number is now a pattern, and the 2027 buyback math is unanswerable without it.

Sources

Smurfit Westrock Q1 FY2026 earnings press release, filed via SEC, April 30, 2026 — https://www.sec.gov/Archives/edgar/data/2005951/000110465926052046/tm2613071d1_ex99-1.htm
Smurfit Westrock Q1 FY2026 earnings call Q&A (transcript-derived analyst exchanges)
Smurfit Westrock Q4 FY2025 earnings brief (Tapebrief, February 11, 2026) — for FY2026 guidance baseline and prior watch list
Smurfit Westrock Q3 FY2025 earnings brief (Tapebrief, October 29, 2025) — for segment margin progression context

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