SONOCO PRODUCTS (SON)·Q4 2025 Earnings Summary

Sonoco Beats Expectations as ThermoSafe Sale Cuts Debt 40%

February 16, 2026 · by Fintool AI Agent

Sonoco Products Company (SON) delivered a solid Q4 2025, beating expectations on both operating profit and Adj. EPS while executing a transformational balance sheet deleveraging. The packaging company reported Adj. EPS of $1.05, up 5% year-over-year, as favorable price/cost dynamics and productivity gains more than offset volume headwinds . The stock rose ~2.4% in after-hours trading to $52.90.

The bigger story: Sonoco closed its ThermoSafe divestiture in November for $656M (13x EV/EBITDA), using proceeds to slash net debt by ~$2.7B year-over-year—a 40% reduction that brought net leverage to ~3.0x from an elevated 6.4x post-acquisition .

Did Sonoco Beat Earnings?

Sonoco's Q4 results exceeded internal expectations, with management citing "Operating Profit, Adj. EBITDA and Adj. EPS above expectations" .

The 30% revenue growth reflects the SMP EMEA metal packaging acquisition, which closed in late 2024 and added meaningful scale to Sonoco's Consumer Packaging segment.

CEO Howard Coker summarized the quarter: "Our Sonoco team executed well despite a difficult macroeconomic environment, delivering strong operating results, reducing net debt by approximately 40% year-over-year and lowering the Company's net leverage ratio to approximately 3.0x."

CFO Paul Joachimczyk added: "Our Consumer Packaging segment achieved record fourth quarter sales, operating profit and adjusted EBITDA while growing adjusted EBITDA margin by 110 basis points. The addition of Metal Packaging EMEA and strong results from our Metal Packaging U.S. business in the quarter drove the increase."

Full Year 2025 Results:

How Did the Stock React?

Sonoco shares rose ~2.4% in after-hours trading to $52.90, approaching the 52-week high of $52.38. The stock has rallied 16.5% year-to-date from $44.37, outperforming the broader market as investors rewarded the company's deleveraging progress and execution.

What Changed From Last Quarter?

Balance Sheet Transformation: The ThermoSafe sale closed in November, bringing in $656M at an attractive 13x EV/EBITDA multiple . Combined with free cash flow, Sonoco reduced net debt by ~$2.7B year-over-year and cut net leverage nearly in half (3.0x vs 6.4x) .

Metal Packaging Strength: U.S. Metal Packaging achieved record top- and bottom-line results, with food can unit volumes up 10% . This offset continued weakness in EMEA, where food can units declined 3% due to macroeconomic pressures and Africa sardine supply issues .

Industrial Resilience: The Industrial segment finished a record year despite 2% volume declines, driven by $8.5M in productivity gains .

Continued Volume Pressure: Consumer volume/mix declined ~2% and Industrial volume/mix declined ~2% . RPC NA volumes remained soft due to weak construction demand and stacked chips headwinds .

Segment Performance

Consumer Packaging

Consumer Packaging revenue surged 62% to $1,142M driven by the SMP EMEA acquisition . Operating profit jumped 77% to $117M with margins expanding 90bps to 10.2% .

Key drivers:

• U.S. Metal Packaging: Record quarter with food can volumes +10%, aerosol slightly up
• EMEA Metal Packaging: Results exceeded expectations despite food can units down 3%
• RPC: NA volumes soft; EMEA volumes flat

Industrial Paper Packaging

Industrial delivered a record full year with Q4 operating profit up 2% despite flat revenues .

The segment benefited from $8.5M in favorable productivity despite units declining 2% .

What Did Management Guide?

Sonoco provided initial 2026 guidance targeting a ~20% EPS improvement versus proforma 2025 (after adjusting for divestitures) .

*Includes ~$100M in capital gain taxes from 2025 divestitures

CFO Joachimczyk noted: "Excluding results from divested businesses in 2025, we are targeting a 20% improvement in adjusted earnings in 2026. In addition to our planned growth initiatives, we are working to achieve our financial targets by implementing a profitability performance plan which is focused on driving significant costs savings over the next three years through operational improvement, commercial excellence and structural transformation."

2026 EPS Bridge

Management outlined a clear path from 2025 proforma to 2026 guidance :

Key 2026 Assumptions

2026 Reporting Structure Change

Starting in 2026, Sonoco will simplify its segment reporting to only two segments: Consumer Packaging and Industrial Paper Packaging . The industrial plastics packaging business, previously reported in "All Other," will be consolidated into the Industrial Paper Packaging segment . Management believes this structure better reflects how the portfolio is managed going forward.

Balance Sheet & Capital Allocation

The story of 2025 was balance sheet repair. Sonoco executed a transformational deleveraging:

The company expects to maintain net leverage below 3.0x at year-end 2026, providing flexibility for share repurchases and continued dividend growth.

Risks to Monitor

1. EMEA Volume Weakness: Food can volumes in Europe and Africa remain under pressure from macroeconomic conditions and sardine supply issues

2. Volume Declines: Both Consumer (-2%) and Industrial (-2%) faced volume/mix headwinds that could persist

3. Tariff Uncertainty: Management flagged tariff uncertainty as impacting market conditions

4. Construction Exposure: RPC NA volumes remain soft due to weak construction demand

Forward Catalysts

• Investor Day (Feb 17, 2026): Management will lay out a 3-year roadmap for growth, balance sheet strengthening, and margin expansion

• Synergy Realization: Procurement synergies from SMP EMEA expected to accelerate in 2026

• New Customer Wins: Multi-year pet food contract (400M units annually) and powdered nutrition contract ramping in 2026-2027

• Continued Deleveraging: Reduced interest expense from debt paydown provides EPS tailwind

CEO Coker concluded: "Over the past several years, we have aligned and scaled our portfolio around the strengths of Sonoco's core metal and paper consumer and industrial packaging businesses. As a result of this transformation, we significantly grew our top-line and bottom-line while expanding margins and generating significant normalized cash flow. We believe our foundation has the potential to deliver improved financial performance in 2026 and beyond."

Key Takeaways

1. Beat & Strong Execution: Q4 results exceeded expectations on profitability metrics, with favorable price/cost and productivity driving outperformance

2. Deleveraging Complete: Net leverage cut to 3.0x from 6.4x through ThermoSafe sale and cash generation—balance sheet transformation largely complete

3. 2026 Outlook Constructive: Guidance implies ~20% EPS growth versus proforma, with operational improvements and interest savings as key drivers

4. Volume Remains the Question: Both segments face volume headwinds; management execution on productivity and pricing will be key to offsetting

The Investor Day tomorrow (Feb 17) should provide additional detail on the 3-year strategic roadmap and how Sonoco plans to sustain growth in a challenged volume environment.

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View the full Q4 2025 Earnings Presentation or read the transcript.