What AptarGroup (ATR) Said on Its Q3 Earnings Call

Key Points

• Q3 sales grew, but profitability declined: Reported sales rose 6% to just over $1 billion and core sales increased 5%, while adjusted EBITDA fell 2% and adjusted EPS declined 6% to $1.52. Lower margins, emergency medicine destocking, higher interest expense and taxes weighed on earnings.
• Pharma’s underlying growth remains strong: Pharma sales rose 8% excluding emergency medicine, supported by consumer healthcare and injectable components used in GLP-1 drugs, biologics and vaccines. Aptar expects naloxone-related destocking to end after Q4, though future demand growth may be slower than historical levels.
• Fourth-quarter outlook is positive despite operational challenges: Aptar forecast adjusted EPS of $1.39-$1.47, implying 17% midpoint growth year over year, as emergency medicine headwinds fade. Beauty and Closures delivered sales growth but faced margin pressure, particularly from North American operational issues and input-cost pass-throughs.

AptarGroup NYSE: ATR reported third-quarter 2026 sales growth across its three business segments, while adjusted profitability declined from the prior year as emergency medicine destocking and lower margins in Beauty and Closures weighed on results.

Reported sales rose 6% to just over $1 billion, while core sales increased 5%. Adjusted EBITDA fell 2% to $217 million, and adjusted EBITDA margin declined to 21.3% from 23.2% a year earlier. Adjusted earnings per share were $1.52, down 6% from $1.62 at comparable exchange rates, primarily reflecting lower adjusted EBITDA, higher interest expense and a higher tax rate.

“Our results in the quarter demonstrate the underlying strength of our businesses, with 5% core sales growth across all three segments and adjusted earnings per share at the higher end of our guidance range,” President and CEO Gael Touya said on his first earnings call in the role.

Pharma Growth Offset by Emergency Medicine Destocking

Pharma core sales increased 1% during the quarter, but rose 8% excluding the expected decline in emergency medicine sales. Aptar said it expects emergency medicine sales to decrease by approximately $65 million for the full year as inventory destocking continues. The company expects that headwind to lapse in the fourth quarter.

Within Pharma, prescription core sales declined 7%, though they increased 6% excluding emergency medicine. Growth in central nervous system therapies and asthma and chronic obstructive pulmonary disease treatments supported the underlying prescription business. Consumer healthcare core sales rose 13%, led by nasal decongestants and dermal solutions, while injectables core sales increased 9% on demand for elastomeric components used in GLP-1 medicines, biologics and vaccines.

Pharma’s adjusted EBITDA margin was 36.4%, down 80 basis points year over year. Chief Financial Officer Vanessa Kanu said the decline reflected the unfavorable mix from lower sales of high-margin emergency medicine products, though royalties and productivity efforts provided offsets.

Touya said Aptar expects naloxone-related destocking to be behind it after the fourth quarter, though the company is still assessing the market’s eventual baseline. He said Aptar expects naloxone demand to grow at a rate above gross domestic product over time, rather than at its historical rate, following the market’s transition toward broader over-the-counter and generic availability.

The company also highlighted its drug-delivery pipeline, including work in ophthalmic, nasal, inhalation and injectable treatments. Aptar is developing its Beat the Blink ophthalmic technology through an exclusive collaboration with Bausch + Lomb and cited an early clinical study that showed patient acceptance and preference for the product. The technology is not yet commercially available.

Aptar also recently announced research collaborations with Massachusetts General Hospital on nose-to-brain drug delivery and with Macquarie University on high-dose dry-powder delivery of biologic medicines using its Orbital Inhaler platform. The company is adding PULMOTREE’s Kolibri non-propellant liquid inhaler technology through an acquisition.

Beauty and Closures Deliver Sales Gains

Beauty core sales increased 8%, including an approximately 4-percentage-point contribution from pass-throughs of higher input costs. Demand increased for dispensing systems used in prestige fragrance, color cosmetics and hair care. Core sales in personal care rose 11%, supported by hair care, shower gel and baby care applications.

However, Beauty’s adjusted EBITDA margin declined 70 basis points to 11.4%, reflecting unfavorable mix and continuing operational challenges in North America. Touya said Aptar’s European and Asian Beauty operations are within their long-term targets, but North America remains the company’s largest area for improvement.

“We have done a deep dive,” Touya said. “We nearly completed the diagnostic, we understand the issues, and we have a plan for them.” He said the improvement effort would require “execution with discipline and accountability” and would not be a quick or linear fix.

Closures core sales rose 11%, with roughly half of the growth attributed to higher input-cost pass-throughs. Food core sales increased 9%, led by dispensing closures for sauces and condiments, while beverage core sales grew 19%, driven by bottled-water and concentrate applications as well as strong tooling sales.

Closures adjusted EBITDA margin declined 60 basis points to 15.5%. Kanu said indexation pass-throughs diluted the margin by 120 basis points; excluding that impact, the segment’s margin would have improved 60 basis points on favorable mix, particularly from higher-value beverage dispensing products.

Russian Charge and Capital Allocation

Aptar deconsolidated its Russian subsidiary effective Sept. 21 after it came under administrative control. The primarily Closures subsidiary was not material to the company’s ongoing revenue and earnings, Kanu said.

The company recorded a combined charge of $61.2 million before tax and $60.4 million after tax, or $0.94 per diluted share. The charge included a $58 million loss on deconsolidation, including approximately $30 million of cash held by the subsidiary, along with receivables reserves and legal costs. Aptar excluded the charge from adjusted earnings.

Year-to-date free cash flow was $198 million, consisting of $390 million in operating cash flow less $192 million in capital expenditures net of government grants. Aptar returned $272 million to shareholders through dividends and repurchases during the first nine months, including $180 million used to repurchase 1.3 million shares. The company had $420 million remaining under its repurchase authorization as of Sept. 30 and increased its quarterly dividend by 4%.

Fourth-Quarter Outlook

Aptar forecast fourth-quarter adjusted earnings per share of $1.39 to $1.47. At the midpoint, the outlook represents 17% growth from the prior-year fourth quarter at comparable exchange rates. The company’s guidance assumes an effective tax rate of 17.5% to 19.5% and a euro-to-U.S.-dollar exchange rate of 1.12.

For the full year, Aptar continues to expect capital investments of $260 million to $280 million and depreciation and amortization expense of $310 million to $320 million. Touya said the company expects to finish 2026 strongly, led by Pharma, as emergency medicine destocking ends and demand continues for consumer healthcare dispensing systems and injectable elastomeric components.

Aptar also announced that Virginie Maes will become president of Aptar Pharma effective Jan. 1. Touya said Maes brings global pharmaceutical and medical experience and will lead efforts to deepen customer relationships and pursue growth opportunities across the Pharma portfolio.

About AptarGroup (NYSE:ATR)

AptarGroup, Inc NYSE: ATR develops and manufactures dispensing, sealing and delivery systems for the pharmaceutical, beauty, personal care, food and beverage markets. Its products are designed to control, protect and dispense a wide range of liquids, creams, lotions, fragrances and other formulations.

The company's offerings include pumps, valves, closures, aerosol systems and other dispensing components, as well as drug-delivery technologies. Through its pharmaceutical business, Aptar supports nasal, pulmonary, ophthalmic, dermal and injectable applications, serving pharmaceutical and biotechnology companies with components and systems used in prescription, over-the-counter and consumer health products.

Aptar serves customers internationally through manufacturing, research and development and commercial operations across North America, Europe, Asia and other global markets.

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