Graphic Packaging Q3 2026 results: sales held at $2,192 million as inflation cut adjusted EBITDA 24.5%

How Graphic Packaging turns board into cartons

Graphic Packaging is integrated from mill to pack. It makes paperboard in its own mills and converts most of it into folding cartons, cups, trays and multipack carriers in packaging plants in the Americas and abroad. Its 10-Q names two reportable segments, Americas Paperboard Packaging and International Paperboard Packaging, plus Corporate and Other, and refers to a Paperboard Manufacturing operating segment³.

That structure shapes how costs reach a carton buyer. Wood fibre, recovered paper, energy, chemicals and freight hit the mills first; the plants then add labour and conversion cost. A carton price is usually set by contract, often with pass-through terms that follow published board or input indices with a lag, so a quarter of sharp cost inflation can show up as lost margin long before it shows up in a price.

The third quarter showed that lag. The release’s adjusted EBITDA bridge puts commodity input and operating cost inflation at $83 million, about 3.8% of quarterly sales by SPI’s calculation, while price was negative by $15 million¹. The release does not split the inflation into energy, fibre, freight, labour or chemicals.

Graphic Packaging uses a measure it calls Net Performance for cost and productivity initiatives, production efficiencies, disruptions and other operating impacts. In the third quarter it added $2 million. That figure matters to buyers because it is the line management controls; it barely moved the bridge this quarter.

The year so far shows a slow climb from a weak start. Nine-month sales of $6,536 million less the second and third quarters leave about $2,156 million for the first quarter, and nine-month adjusted EBITDA of $768 million leaves about $232 million, a margin of about 10.8%, by SPI’s calculation. The margin then rose to 11.3% in the second quarter and 13.2% in the third, on sales that barely moved⁴.

What the Graphic Packaging Q3 2026 results show

Sales. Net sales rose $2 million to $2,192 million. The release’s bridge shows volume/mix up 1%, or $19 million, price down 1%, or $15 million, and foreign exchange and other items down $2 million¹. The highlights summarise the top line in one sentence.

Costs. Cost of sales rose to $1,885 million from $1,756 million, or 7.3%, by SPI’s calculation, while selling, general and administrative costs were $162 million against $163 million. Income from operations fell to $101 million from $234 million.

Profit. EBITDA fell 30% to $254 million from $361 million. After special items of $28 million and other non-recurring items of $7 million, adjusted EBITDA was $289 million. Adjusted net income was $67 million, or $0.23 a share, against $172 million, or $0.58¹.

Against the second quarter. The Q2 release of 4 August reported net sales of $2,188 million and adjusted EBITDA of $247 million, an 11.3% margin⁴. Q3 adjusted EBITDA was therefore $42 million higher on $4 million more sales, and the margin rose 1.9 points, by SPI’s calculation.

Depreciation and interest. Depreciation and amortisation rose to $153 million from $127 million. Interest expense rose to $69 million from $53 million, and the 10-Q shows capitalised interest of $2 million against $17 million a year earlier³. By SPI’s reading, most of the interest increase reflects interest no longer capitalised on construction, not new borrowing.

Nine months. For January to September, net sales were $6,536 million against $6,514 million, net income $3 million against $373 million, and adjusted EBITDA $768 million, an 11.8% margin, against $1,084 million and 16.6%. Adjusted EPS was $0.46 against $1.51.

Cash. Operating cash flow for nine months was $295 million against $320 million, and Adjusted Cash Flow $314 million against minus $332 million, a swing of $646 million¹. Nine-month capital spending fell to $287 million from $808 million.

The footprint changes behind the numbers

The 10-Q for the quarter sets out the plant decisions that sit inside the special items³. Each one moves volume between sites or removes a planned project, which is what a carton buyer feels first.

Packaging plant closures. In the third quarter the company decided to close multiple packaging facilities, which the 10-Q does not name. It recorded $3 million of related costs in Americas Paperboard Packaging and $3 million in International Paperboard Packaging. The release adds $9 million of accelerated depreciation tied to exit activities¹.

Roll warehouses. In the first quarter of 2026 the company discontinued its project to build automated roll warehouses at Kalamazoo, Michigan and Texarkana, Texas, and wrote off $40 million of assets in Corporate and Other.

Waco. Operations at Waco, Texas began in the fourth quarter of 2025. Start-up charges totalled $55 million, with $15 million in the third quarter of 2025 and none in 2026, the 10-Q says.

Sales and earlier closures. The company sold its Croatian business in the second quarter of 2026 for $6 million, booking a $13 million loss in International. Middletown, Ohio, closed in May 2025, was sold in the second quarter for a $2 million gain, and East Angus, Québec closed in December 2025.

Headcount and offices. Severance and consulting costs were $5 million in the third quarter and $28 million over nine months. The 10-Q also records a $14 million impairment for consolidating certain headquarters floors³.

Depreciation. Nine-month depreciation and amortisation rose to $436 million from $387 million, and the cash flow statement shows $69 million of asset impairment charges over the same period¹. Part of the rise in depreciation sits in the exit activities, where the release counts $9 million of accelerated depreciation in the third quarter alone; SPI has not yet confirmed how much of the remainder comes from Waco running for a full year.

Who gains and who pays as costs outrun carton prices

Graphic Packaging’s shareholders. They carried the gap in the quarter. Adjusted EPS fell to $0.23 from $0.58, and the company bought back no shares in 2026 against $150 million in the first nine months of 2025, while regular dividends of about $98 million continued¹.

Carton and cup buyers. Food, beverage and foodservice brands paid 1% less on average in the third quarter, a $15 million price effect. That benefit looks temporary: the company expects price improvements in Q4 and into 2027, so 2027 contract rounds are where the $83 million of inflation is likely to be argued over, by SPI’s reading.

Customers of closing plants. The 10-Q confirms Q3 closure decisions in both segments without naming the sites. Buyers served from those plants face transfers to other sites, with new print approvals, qualification runs and lead times.

Lenders. Total debt fell to $5,520 million from $5,688 million at the end of June and $5,592 million at the end of 2025. Net debt fell $300 million in the quarter, but net leverage rose to 4.8 times because twelve-month adjusted EBITDA fell to $1,081 million from $1,395 million at the end of 2025¹.

Mills and equipment suppliers. Capital spending is falling hardest. Q3 capex was $64 million against $267 million, and the roll warehouse projects at Kalamazoo and Texarkana were cancelled with $40 million written off³.

Brand owners selling into EPR states. Fees on cartons fall on the brand, not on the converter. In Oregon, polycoated paperboard pays 48.0 cents a pound in 2026 against 8.0 cents for plain paperboard, CAA’s schedule shows, so a carton price rise and an EPR fee can land on the same pack⁷.

Receivables buyers. Net cash receipts from receivables sold rose to $227 million in nine months from $91 million, a line that lifts Adjusted Cash Flow. By SPI’s reading, more of the company’s cash now depends on that financing channel.

The pinch point: leverage of 4.8 times before price arrives

The company’s own guidance shows how much depends on timing. Full-year adjusted EBITDA of about $1.05 billion less $768 million for nine months leaves about $282 million for the fourth quarter, by SPI’s calculation. That is below the third quarter’s $289 million and about 9% below the $311 million of Q4 2025.

Leverage is the constraint. At 4.8 times, measured as net debt over twelve-month adjusted EBITDA, every quarter of weak earnings keeps the ratio high even as net debt falls. A Q4 2026 of about $282 million would replace a Q4 2025 of $311 million in the twelve-month figure, so leverage at year end would stay near current levels unless net debt falls further, by SPI’s reading.

The cash target carries the other half of the plan. Reaffirmed Adjusted Cash Flow of $600 to $700 million against $314 million for nine months implies $286 to $386 million in Q4, by SPI’s calculation, the strongest quarter of the year. Capital spending below $450 million against $287 million so far leaves at most about $163 million for Q4.

The August release had already shifted the range. It put net sales at the high end of $8.4 to $8.6 billion and adjusted EBITDA at the low end of $1.05 to $1.25 billion, and gave adjusted EPS of $0.65 to $0.90, citing the inflationary environment for EBITDA and higher interest expense for EPS⁴. The November release now gives single figures at those ends of the ranges: about $8.6 billion of sales, about $1.05 billion of adjusted EBITDA and about $0.65 of adjusted EPS.

The two releases together show a company holding its sales line while its profit line settles at the floor it set in August. For a buyer, that combination is the signal: volume is there, and the margin is what management has to rebuild, which it says it will do through price, cost reduction and productivity.

How Graphic Packaging compares with Sonoco and International Paper

Three US paper packaging groups reported their third quarters within two weeks, and all report in US dollars, though on different measures and scopes. The comparison below uses rates of change only.

Sonoco’s net sales fell 4.2% to $2,042 million from $2,131 million, and its adjusted EBITDA fell 9.0% to $352 million from $386 million, by SPI’s calculation from its release⁵. Its Consumer Packaging segment posted sales of $1,396 million against $1,438 million and segment operating profit of $179 million against $209 million.

International Paper’s Packaging Solutions North America, which sells containerboard and corrugated boxes rather than folding cartons, had net sales of $3,880 million against $3,898 million and operating profit of $427 million against a loss of $166 million a year earlier⁶. SPI’s International Paper story credits higher sales prices, lower outage costs and better mill performance.

Price is where Graphic Packaging differs from International Paper’s North American unit. Its release shows a negative price effect of 1% in Q3, while International Paper cited higher sales prices. By SPI’s reading, folding cartons have lagged containerboard in the 2026 price cycle; SPI’s Sonoco story covers the weather-hit food can volumes behind Sonoco’s revised outlook.

What US packaging EPR adds to the carton bill

The results do not mention extended producer responsibility, but the brands that buy Graphic Packaging’s cartons pay EPR fees on them in Oregon and Colorado. Oregon’s Recycling Modernization Act, tracked as PR-US-002, has let Circular Action Alliance (CAA) charge member fees since 1 July 2025⁹.

CAA’s 2026 Oregon fee schedule charges 8.0 cents a pound for paperboard on the statewide collection list, the same as corrugated cardboard, and 48.0 cents a pound for polycoated paperboard, which is not accepted for recycling⁷. Aseptic and gable-top cartons pay 17.0 cents a pound.

SPI calculation: at 2,204.62 pounds to the tonne, Oregon’s 2026 rates are $176.37 a tonne for paperboard and $1,058.22 a tonne for polycoated paperboard, six times as much. A brand selling 1,000 tonnes of cartons into Oregon would pay $176,370 on plain paperboard and $1,058,220 on polycoated board, a difference of $881,850, before exemptions or bonuses.

SPI’s Oregon and Colorado fee schedule analysis shows Oregon’s 2027 polycoated paperboard final rate falling to 34 cents a pound as CAA returns reserves, and Colorado’s rising to 25 cents from 20¹¹. The gap between plain and coated board persists in both states.

Colorado is the second state where those fees are already payable. Its Producer Responsibility Program, tracked as PR-US-003 in the SPI Regulation Tracker for the United States, made 2026 the first year in which dues were owed, and CAA’s 2026 Colorado schedule built each rate from base dues per material with passive eco-modulation already applied¹⁰. In both states the fee follows the weight of packaging supplied, so a lighter carton lowers the bill whatever its coating.