AptarGroup Q1 Earnings Call Highlights

Key Points

• Aptar reported Q1 sales up 11% on a reported basis while core sales were flat year-over-year; adjusted EBITDA rose 3% to $189 million but margins fell to 19.2% and adjusted EPS declined to $1.19 from $1.30 a year ago.
• The Pharma segment suffered an emergency medicine destocking expected to reduce full-year revenue by about $65 million (roughly two-thirds in H1), offsetting growth in injectables and consumer healthcare.
• Free cash flow more than doubled to $53 million and Aptar returned $131 million to shareholders (including $100 million of buybacks), finished Q1 with $223 million cash and net debt $1.1 billion, guided Q2 adjusted EPS of $1.32–$1.40, and announced Gael Touya will become CEO on Sept. 1.

AptarGroup NYSE: ATR reported first-quarter 2026 results that management said largely tracked expectations, with currency providing a lift to reported growth while underlying performance reflected mixed conditions tied mainly to an expected destocking cycle in emergency medicine.

On the call, President and CEO Stephan Tanda said Aptar is “collaborating closely” with Gael Touya, who is set to become CEO on Sept. 1 following Tanda’s planned retirement later this year. Touya, currently president of Aptar Pharma, joined the call as CEO designate.

Q1 results: reported growth, flat core sales

Executive Vice President and CFO Vanessa Kanu said reported sales increased 11% in the quarter, while core sales (excluding currency and acquisitions) were flat year over year. Adjusted EBITDA rose 3% to $189 million, but adjusted EBITDA margin declined to 19.2% from 20.7% a year earlier, which Kanu attributed “primarily due to less favorable product mix and operational challenges in Beauty and Closures.”

Adjusted earnings per share were $1.19, down from $1.30 in the year-ago period at comparable exchange rates. Kanu said the EPS decline reflected higher depreciation and amortization tied to capital investments and acquisitions, as well as interest expense of $17 million, up $6 million year over year due to higher rates on current-year borrowings. She added that the adjusted effective tax rate was 22.6%, compared with 25.8% a year earlier, due to a more favorable mix of earnings and higher excess tax benefits from share-based compensation.

Companywide gross margins declined 210 basis points year over year. SG&A rose in absolute dollars due to currency and acquisitions, but excluding those factors SG&A was flat; as a percentage of sales, SG&A fell 40 basis points to 17.1%. Kanu said SG&A included about $4 million of legal expenses related to “non-ordinary course litigation,” which was not present in the prior-year quarter.

Pharma: emergency medicine headwind offsets growth areas

Aptar’s Pharma segment posted a 1% decline in core sales, which Kanu said was driven mainly by product mix. Both Kanu and Tanda emphasized that the quarter included a significant headwind from emergency medicine destocking, following what Tanda described as “exceptional growth” in the comparable periods of Q1 2024 and Q1 2025.

Kanu reiterated Aptar’s prior estimate that emergency medicine sales would decline by approximately $65 million for full-year 2026, saying it “continues to track.” She said the decline in emergency medicine dispensing systems reduced Pharma core sales by 3% in Q1. Later in the Q&A, Tanda said Aptar expects about two-thirds of the $65 million impact to occur in the first half of 2026, with the balance in the second half, and that comparisons should be largely “washed out” by Q4.

Within Pharma:

• Prescription core sales decreased 10%. Kanu said emergency medicine destocking reduced prescription core sales by 5%, and she also noted Q1 2025 was “a strong quarter” across multiple application fields, creating a difficult comparison.
• Consumer healthcare core sales increased 4%, driven by eye care and nasal decongestants.
• Injectables core sales increased 20%, supported by demand for elastomeric components used for GLP-1, biologics, and antithrombotics.
• Services contributed positively; Kanu said Aptar continues to see “strong pipeline build” for Annex 1 and biologics projects.
• Active material science solutions core sales decreased 1% as growth in oral solid dose was not enough to offset lower probiotics and diabetes test strip sales.

Pharma adjusted EBITDA margin was 33.3%, down 150 basis points year over year. Kanu said the decline was expected and reflected lower high-margin emergency medicine volumes and mix, while royalties continued to support margins.

On growth visibility, Tanda told KeyBanc’s Paul Knight that recent Neffy regulatory updates are “more proof points” but not expected to “move the needle” in any single quarter. Tanda added that Aptar felt “very good about prescription growth for the balance of the year,” particularly excluding emergency medicine.

Beauty and Closures: volume improvement, margin pressure from operational issues

Beauty core sales increased 3%, with Kanu citing improving volumes. In the segment’s largest end markets, fragrance, facial skincare, and color cosmetics also rose 3%, supported by double-digit growth for prestige fragrance pumps and color cosmetics, partially offset by a skincare decline. Personal care rose 6% with “broad-based growth across all regions,” driven by body and hair care applications.

Beauty adjusted EBITDA margin was 11.1%, down 100 basis points year over year. Kanu said the decrease was primarily due to less favorable product mix in North America, and she said Aptar was still feeling impacts from a supplier fire discussed on the prior quarter’s call, though she noted sequential margin improvement from Q4 2025.

Closures core sales were flat, as higher volumes were offset by pass-through of lower resin pricing. Food core sales decreased 3% due to resin impacts, partially offset by continued demand for sauces and condiment dispensing closures. Beverage core sales increased 10%, driven by dairy drinks and liquid coffee creamers.

Closures adjusted EBITDA margin fell to 13.1%, down 270 basis points year over year. Kanu attributed the decline to maintenance issues, temporary plant closures caused by extreme weather in North America, and a write-off of a minority investment during the quarter. In response to a Bank of America question, Kanu described the write-off as a venture-style minority investment and said it was “not the most material item,” but estimated it represented “about 50 or 60 basis points in margin impact” for the segment in the period.

Tanda said he expected Closures to return to “normal margins” in the second half of the year, and Kanu added that the company expects sequential margin improvements in the segment, which are “baked into” guidance.

Cash flow, capital returns, and outlook

Kanu said free cash flow more than doubled to $53 million, reflecting $119 million in operating cash flow and $65 million in capital expenditures. Aptar repurchased $100 million of shares and paid $31 million in dividends, returning $131 million to shareholders. The company ended the quarter with $223 million in cash, net debt of $1.1 billion, and a leverage ratio of 1.43, which Kanu characterized as a strong balance sheet.

Management also addressed geopolitical-related cost pressures. Kanu said the impact of the Middle East conflict was minimal in Q1, but heading into Q2 the company is seeing “significantly increased input costs,” particularly raw materials, transportation, and energy. She said Aptar is largely passing these costs through to customers, in some cases supported by index clauses for resin, and noted that pass-through can compress margin percentage even as the company focuses on neutralizing earnings impact.

For Q2, Kanu guided to adjusted EPS of $1.32 to $1.40, an effective tax rate of 22.5% to 24.5%, and a EUR/USD rate of 1.18. For full-year 2026, Aptar expects capital investments of $260 million to $280 million and depreciation and amortization expense of $310 million to $320 million.

Tanda said that excluding the emergency medicine destocking effect, the company expects “a solid quarter with growth across each of our segments” in Q2, adding that the comparison challenges should ease in the second half. He also said Aptar is seeing a “healthy order book” in Beauty and Closures and continuing pipeline build in Pharma, including systemic nasal drug delivery and injectables.

About AptarGroup NYSE: ATR

AptarGroup, Inc is a global provider of advanced dispensing, sealing and protection solutions for consumer and pharmaceutical markets. The company designs and manufactures a broad portfolio of products that enable the controlled delivery of liquids, gels, powders and aerosols. Its customer base spans beauty and personal care, home care, food and beverage, and pharmaceutical sectors, where innovation in packaging and drug‐delivery devices drives brand differentiation and regulatory compliance.

In the consumer markets, AptarGroup offers pumps, actuators, valves, closures and specialized bottles engineered for precision, convenience and sustainability.

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