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SILGAN HOLDINGS INC (SLGN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid top-line growth and stable earnings: net sales $2.01B (+15% YoY), GAAP EPS $1.06 and adjusted EPS $1.22 (+1% YoY) as higher Dispensing and Specialty Closures and pet food volumes offset beverage closure headwinds and higher interest/tax rates .
  • Revenue and EPS were broadly in line to better than S&P Global consensus: revenue beat ($2.01B vs $1.93B*) and EPS matched ($1.22 vs $1.22*). Management cut FY25 adjusted EPS to $3.66–$3.76 (from $3.85–$4.05) on softer North American personal/home care volumes, higher tax rate, and euro notes interest .
  • Segment performance mixed: Dispensing & Specialty Closures posted sixth straight record adjusted EBIT (+19% YoY; strong fragrance), Metal Containers volumes +4% (double-digit pet food) but adjusted EBIT modestly lower, Custom Containers achieved record Q3 adjusted EBIT (+16% YoY) .
  • Catalysts ahead: Q4 EPS guide $0.62–$0.72 vs S&P consensus $0.64*; watch inventory correction in personal/home care, steel/tariff decisions, and resolution of a large fruit/veg customer bankruptcy; company confirmed FY25 FCF ~$430M and authorized up to $500M repurchases through 2029 .

What Went Well and What Went Wrong

What Went Well

  • Dispensing & Specialty Closures recorded a sixth consecutive quarterly record adjusted EBIT (+19% YoY to $113.5M), driven by Weener integration and strong high-value fragrance dispensing growth; CEO: “we delivered 11% Adjusted EBITDA growth in the quarter… record performance with Adjusted EBIT growth of 19%… continued growth in high value fragrance dispensing products” .
  • Metal Containers delivered mid-single-digit volume growth (+4%) led by double-digit pet food, with stable franchise customer model mitigating price/cost pressures .
  • Custom Containers achieved record Q3 adjusted EBIT (+16% YoY to $23.1M) on favorable price/cost including mix and lower SG&A; volume +4% excluding exited lower-margin business .

What Went Wrong

  • North American beverage closures declined 5% YoY (hot fill sports drinks down ~10%) due to weather and promotional pullbacks; personal/home care volumes now expected mid-single-digit decline in Q4 as customers reduce inventories .
  • Higher interest expense ($50.0M in Q3, FY25 raised to ~$190M) and a higher tax rate (Q3 24.3%; FY25 ~24.5%) weighed on EPS growth despite EBIT gains .
  • Metal Containers adjusted EBIT down slightly YoY ($95.8M vs $97.1M) on less favorable price/cost including mix and production efficiencies, despite volume growth .

Financial Results

Core results vs prior periods

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Billions)$1.745 $1.539 $2.009
GAAP Diluted EPS ($)$0.93 $0.83 $1.06
Adjusted EPS ($)$1.21 $1.01 $1.22
Gross Profit Margin (%)16.8% 19.4% 16.3%
Adjusted EBITDA ($USD Millions)$259.9 $253.0 $288.3
Adjusted EBITDA Margin (%)14.9% 16.4% 14.4%

Notes: margins calculated from cited numerator/denominator.

Q3 actual vs S&P Global consensus

MetricQ3 2025 ActualQ3 2025 Consensus*Result
Revenue ($USD Billions)$2.009 $1.929*Beat
Adjusted EPS ($)$1.22 $1.22*In line

Values marked with * retrieved from S&P Global.

Segment breakdown (Q3 2025 vs Q3 2024)

SegmentNet Sales Q3'24 ($MM)Net Sales Q3'25 ($MM)YoY %Adjusted EBIT Q3'24 ($MM)Adjusted EBIT Q3'25 ($MM)YoY %
Dispensing & Specialty Closures$563.7 $690.4 +23%$95.2 $113.5 +19%
Metal Containers$1,022.6 $1,158.2 +13%$97.1 $95.8 -1%
Custom Containers$158.8 $160.1 +1%$20.0 $23.1 +16%

KPIs (operational)

KPIQ3 2025Commentary
Fragrance dispensing organic volume growth+15% Continued premium wins, innovation, strong launches
Beverage closures (food & beverage) volumes-5% YoY Weather-driven sports drinks weakness, lower promotions
Hot fill sports drinks volumes~-10% YoY Within expectations; stabilization entering Q4
Metal Containers pet food volumes+10% YoY About half of unit volumes; continued strength

Non-GAAP reconciliation: Q3 adjustments added $0.16 to diluted EPS; pre-tax adjustments: acquired intangible amortization $15.9M, rationalization $7.2M, other pension income $(1.2)M; net impact $16.7M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$3.85–$4.05 $3.66–$3.76 Lowered
Adjusted EPSQ4 2025N/A$0.62–$0.72 New guide
Interest & other debt expenseFY 2025~$185M ~$190M Raised
Adjusted tax rateFY 2025~24% ~24.5% Raised
Free Cash FlowFY 2025~$430M ~$430M (confirmed) Maintained
Capital ExpendituresFY 2025~$300M ~$300M Maintained
Segment EBIT outlookQ4 2025N/ADSC & Custom comparable; Metal lower vs PY Set expectations
DividendNext payment$0.20/share on Dec 15, 2025 —Ongoing cadence
Share repurchasesAuthorizationPrior authorization near $25M remaining New $500M authorization through 2029 Expanded capacity

Drivers of FY guide cut: ~$0.18/share lower volumes and under-absorbed costs (North America personal/home care), ~$0.03/share higher tax, ~$0.04/share higher interest .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Dispensing growth mix (fragrance vs beverage)Q1: double-digit dispensing growth; Weener integration strength ; Q2: beverage closures -3% on cool/wet weather & lower promotions Fragrance +15% organic growth; beverage closures -5%; sports drinks ~-10% Fragrance improving; beverage softer
Pet food demand (Metal Containers)Q1: pet food +4% volumes ; Q2: pet food mid-single-digit volume growth Pet food +10% volumes; expecting high single-digit growth in Q4 Strengthening
Customer bankruptcy (fruit/veg)Q2: Expected impact mid-year Q3 volumes “right in line”; clarity likely by year-end; potential $10M cost-out if volumes remain low Stabilizing; resolution pending
Tax/interest headwindsQ1/Q2: FY25 tax ~24%, interest ~$185M FY25 tax ~24.5%, interest ~$190M after euro notes Headwinds increased
Resin/steel inputsQ2: contractual pass-through for metals Polypropylene decline gives modest DSC tailwind; steel raw materials rising; tariff court decisions watched Mixed: resin favorable; steel inflation risk
Capital deploymentQ1/Q2: integration & deleveraging focus $60M buybacks in Q3; new $500M authorization; continued M&A appetite as leverage drifts to midpoint More flexible

Management Commentary

  • “Our third quarter results continued to exhibit… the resilience of our business… as we delivered 11% Adjusted EBITDA growth in the quarter… record performance with Adjusted EBIT growth of 19%… continued growth in high value fragrance dispensing products” — Adam Greenlee, CEO .
  • “We now expect lower volumes for certain products for personal care and home care markets in North America… higher than anticipated tax rate in 2025 in addition to incremental interest expense related to the recent euro bond issuance” .
  • “We delivered 10% adjusted EPS growth through the first three quarters… successfully integrated the [Weener] acquisition… nearly 40% growth in dispensing product sales… 15% organic growth in fragrance volumes” .
  • “Dispensing and Specialty Closures… expected to grow at least mid-single-digit… Metal Containers… ~90% under long-term contracts… strong free cash flow generation” .

Q&A Highlights

  • Inventory correction dynamics: Late Sept softening in personal/home care led to Q4 volume cuts; $25M Q4 headwind roughly split between volume and proactive downtime/inventory reductions; ~$20M DSC and ~$5M Custom impact .
  • DSC growth vs guidance: Revenue growth came in ~22–23% vs mid-high 20s guide due to late-September pressure; forecasting clarity arrived in early Oct, hence timing of guide update .
  • Pet food and bankruptcy: Pet food remains strong; bankruptcy-affected customer volumes in line; resolution likely by year-end; potential $10M cost reduction over time if volumes stay low .
  • Free cash flow maintenance: Despite lower Q4 outlook, FY25 FCF ~$430M intact due to inventory reductions and working capital actions; potential resin tailwind for DSC from polypropylene declines .
  • Capital allocation: $60M buybacks in Q3 amid perceived dislocation; flexibility for M&A and repurchases as leverage trends to midpoint of range .

Estimates Context

  • Q3 2025: revenue beat ($2.01B vs $1.93B*) and EPS matched ($1.22 vs $1.22*) versus S&P Global consensus; beats driven by fragrance and pet food strength offsetting beverage closures and higher interest/taxes .
  • Q4 2025: Company guide $0.62–$0.72 EPS vs consensus $0.643*; consensus revenue ~$1.460B* with management indicating DSC and Custom volumes down mid-single-digit and Metal up mid-single-digit, implying potential estimate refinements toward mix shifts and segment margins .

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$3.85–$4.05 $3.66–$3.76 Lowered
Adjusted EPSQ4 2025N/A$0.62–$0.72 New guide
Interest expenseFY 2025~$185M ~$190M Raised
Adjusted tax rateFY 2025~24% ~24.5% Raised
Free Cash FlowFY 2025~$430M ~$430M Maintained
CapexFY 2025~$300M ~$300M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Personal/Home CareQ2: beverage closures weakness from weather/promo Q4 mid-single-digit decline expected; inventory normalization Worsened
FragranceQ1: record dispensing volumes +15% organic growth; double-digit expected in Q4 Improving
Sports DrinksQ2: cool/wet weather impact ~-10% in Q3; stabilizing into Q4 Stabilizing
Pet FoodQ1/Q2: mid-single-digit growth +10% in Q3; high single-digit expected in Q4 Strengthening
Tax/InterestQ1/Q2: ~24% tax; ~$185M interest Tax ~24.5%; interest ~$190M Headwind increase

Management Commentary

  • “We continue to see significant opportunity to expand our high value, high growth dispensing business both organically and through value and earnings accretive capital deployment… as a result of the Weener acquisition” .
  • “As we enter the fourth quarter… expect lower volumes for certain products for personal care and home care markets in North America as our customers manage inventory levels into year end” .
  • “Our Metal Containers business… approximately 90% under long-term contracts… creates exceptional value… stable earnings, low capital requirements, strong free cash flow generation” .
  • “We repurchased $60 million of shares in the third quarter because we thought the market was dislocated… leverage drifting toward midpoint… well positioned for M&A” .

Q&A Highlights

  • Late-quarter visibility: DSC growth shortfall tied to late September softness; guidance updated after early October customer forecasts .
  • Q4 decrementals: ~$25M pre-tax hit split ~50/50 between volume and proactive inventory/downtime actions; ~$20M DSC, ~$5M Custom .
  • Macro bifurcation: High-end consumer driving fragrance; lower/mid-tier consumers stretching purchases, favoring shelf-stable cans; promotional effectiveness critical .
  • Inputs & pricing: Polypropylene decline modest DSC tailwind; steel costs rising; tariff court outcomes may shape 2026 pre-buys .
  • Bankruptcy outlook: Volumes in line; potential cost-out ~$10M over time if volumes remain low; resolution likely around year-end .

Estimates Context

  • Q3 beat/on-line to consensus suggests resilience in core categories despite beverage softness; consensus for Q4 EPS ($0.643*) sits at the midpoint of company guide, but mix shifts (DSC/Custom down, Metal up) may warrant fine-tuning of segment margin assumptions .
  • FY25 consensus likely to track lowered guide ($3.66–$3.76); watch for estimate revisions reflecting higher interest/tax and personal/home care inventory normalization .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Mix resilience: Fragrance and pet food strength underpin revenue/EPS stability; beverage closures headwinds appear weather/promo-related and are stabilizing entering Q4 .
  • Near-term headwinds: Expect Q4 mid-single-digit volume declines in personal/home care with under-absorption impacts; FY25 tax and interest headwinds are now higher .
  • Cash and capital returns: FY25 FCF ~$430M confirmed supports deleveraging and opportunistic buybacks; $500M repurchase authorization provides medium-term capital return flexibility .
  • Watchlist catalysts: Court rulings on steel tariffs, resin price trends, and bankruptcy resolution could influence 2026 margins and volumes, particularly in Metal Containers and DSC .
  • Segment outlook: DSC expected to grow mid-single-digit longer term; Metal Containers stable with contractual pass-through and pet food momentum; Custom Containers executing cost reductions and margin expansion .
  • Non-GAAP clarity: Q3 adjusted EPS benefited by $0.16 from standard adjustments (amortization, rationalization, pension income); monitor consistency of adjustments into Q4/FY .
  • Trading lens: The lowered FY guide and Q4 volume correction are known negatives; balancing factors include confirmed FCF, strong fragrance/pet food trends, and expanded buyback authorization that could support shares on weakness .