Greif's Profit Plunges 26% Amid Restructuring, Containerboard Divestiture

TL;DR

**Greif's Q3 numbers are ugly, but the containerboard sale could be a smart, albeit painful, pivot for future focus.**

AI Summary

GREIF, INC. (GEF-B) reported a significant decline in net income attributable to Greif, Inc. for the three months ended July 31, 2025, falling to $64.0 million from $87.1 million in the prior year, a 26.5% decrease. Net sales also decreased by 2.0% to $1,134.7 million from $1,164.9 million in the same period. Operating profit saw a substantial drop of 46.5%, from $136.7 million in Q3 2024 to $73.1 million in Q3 2025, primarily due to increased restructuring and other charges of $25.2 million (up from $2.7 million) and non-cash asset impairment charges of $3.4 million (up from $0.2 million). For the nine months ended July 31, 2025, net income attributable to Greif, Inc. was $119.9 million, a 39.6% decrease from $198.7 million in the prior year, despite a slight 0.5% decrease in net sales to $3,231.8 million. The company is undergoing a strategic shift, divesting its containerboard business, including the CorrChoice sheet feeder system, which is expected to close by August 31, 2025, and is now classified as discontinued operations. This divestiture contributed $24.7 million to net income from discontinued operations for the three months ended July 31, 2025, a significant increase from $9.1 million in the prior year.

Why It Matters

Greif's substantial profit decline and strategic divestiture of its containerboard business signal a pivotal moment for the company. Investors should note the immediate impact on profitability, with net income attributable to Greif, Inc. down 26.5% for the quarter, but also consider the long-term implications of streamlining operations. This move could enhance focus on core segments, potentially improving competitive positioning against rivals in the packaging industry. Employees in the divested containerboard business face uncertainty, while customers might see changes in supply chain dynamics. The broader market will watch how Greif's strategic shift affects its market share and operational efficiency in a competitive landscape.

Risk Assessment

Risk Level: high — The risk level is high due to a significant 46.5% drop in operating profit for the three months ended July 31, 2025, coupled with a 26.5% decrease in net income attributable to Greif, Inc. The company also incurred substantial restructuring and other charges of $25.2 million, up from $2.7 million in the prior year, indicating ongoing operational challenges and costs associated with its strategic shift.

Analyst Insight

Investors should closely monitor the successful completion and financial impact of the containerboard business divestiture. While current results are weak, the strategic shift could unlock value; consider holding if you believe in the long-term strategy, but new investors should wait for clearer signs of stabilization and improved profitability from continuing operations.

Financial Highlights

revenue

$1,134.7M

operating Margin

6.4%

net Income

$64.0M

eps

$1.66

gross Margin

22.7%

cash Position

$285.2M

revenue Growth

-2.0%

Revenue Breakdown

Key Numbers

• $1,134.7M — Net Sales (Decreased 2.0% from $1,164.9M in Q3 2024)
• $64.0M — Net Income Attributable to Greif, Inc. (Decreased 26.5% from $87.1M in Q3 2024)
• $73.1M — Operating Profit (Decreased 46.5% from $136.7M in Q3 2024)
• $25.2M — Restructuring and Other Charges (Increased significantly from $2.7M in Q3 2024)
• $24.7M — Net Income from Discontinued Operations (Increased from $9.1M in Q3 2024, reflecting the containerboard divestiture)
• $119.9M — Net Income Attributable to Greif, Inc. (Nine Months) (Decreased 39.6% from $198.7M in the prior nine-month period)
• $3,231.8M — Net Sales (Nine Months) (Slightly decreased 0.5% from $3,247.9M in the prior nine-month period)
• $162.6M — Operating Profit (Nine Months) (Decreased 37.6% from $260.5M in the prior nine-month period)
• $42.5M — Restructuring and Other Charges (Nine Months) (Increased significantly from $1.6M in the prior nine-month period)
• $285.2M — Cash and Cash Equivalents (Increased from $197.7M at October 31, 2024)

Key Players & Entities

• GREIF, INC. (company) — registrant
• CorrChoice sheet feeder system (company) — part of containerboard business being sold
• New York Stock Exchange (regulator) — exchange where GEF and GEF-B are traded
• $64.0 million (dollar_amount) — Net income attributable to Greif, Inc. for Q3 2025
• $87.1 million (dollar_amount) — Net income attributable to Greif, Inc. for Q3 2024
• $1,134.7 million (dollar_amount) — Net sales for Q3 2025
• $1,164.9 million (dollar_amount) — Net sales for Q3 2024
• $73.1 million (dollar_amount) — Operating profit for Q3 2025
• $136.7 million (dollar_amount) — Operating profit for Q3 2024
• $25.2 million (dollar_amount) — Restructuring and other charges for Q3 2025

FAQ

Risk Factors

• Increased Restructuring and Impairment Charges [medium — operational]: The company incurred significant increases in restructuring and other charges ($25.2M vs $2.7M in Q3 2025) and non-cash asset impairment charges ($3.4M vs $0.2M in Q3 2025). These charges negatively impacted operating profit by $21.8M in the quarter.
• Divestiture of Containerboard Business [medium — market]: Greif is divesting its containerboard business, including CorrChoice, expected to close by August 31, 2025. While this generated $24.7M in net income from discontinued operations in Q3 2025, it represents a significant strategic shift and potential future revenue stream loss.
• Declining Profitability [high — financial]: Net income attributable to Greif, Inc. fell 26.5% to $64.0M in Q3 2025, and operating profit dropped 46.5% to $73.1M. For the nine months, net income decreased 39.6% to $119.9M.

Industry Context

Greif, Inc. operates in the industrial packaging sector, facing competition from global and regional players. The industry is influenced by raw material costs, global trade dynamics, and demand from end-use markets like chemicals, food & beverage, and industrial goods. Companies are increasingly focused on sustainability and supply chain efficiency.

Regulatory Implications

The company must comply with financial reporting regulations (e.g., SEC filings) and environmental regulations related to manufacturing and waste disposal. Changes in trade policies or tariffs could also impact international operations and costs.

What Investors Should Do

1. Monitor the impact of the containerboard divestiture
2. Analyze the drivers of increased operating expenses
3. Evaluate the performance of continuing operations

Key Dates

• 2025-08-31: Expected closing of containerboard business divestiture — Marks a significant strategic shift for Greif, impacting future revenue and operational structure.
• 2025-07-31: End of third quarter for fiscal year 2025 — Reporting period for the financial results showing decreased net sales and income.
• 2024-10-31: Prior fiscal year end — Balance sheet comparison point for cash and cash equivalents.

Glossary

Restructuring and other charges

Costs associated with significant organizational changes, such as layoffs, facility closures, or business unit reorganizations. (These charges significantly increased in Q3 2025, impacting profitability.)

Non-cash asset impairment charges

A reduction in the carrying value of an asset on the balance sheet when its fair value is less than its book value, without an actual cash outflow. (These charges also increased substantially in Q3 2025, contributing to lower operating profit.)

Discontinued operations

A segment of a business that a company has disposed of or plans to dispose of, reported separately on the income statement. (The containerboard business is classified as discontinued operations, with its divestiture contributing to net income.)

Operating profit

Profitability of a company's core business operations before interest and taxes. (Showed a substantial decline of 46.5% in Q3 2025, indicating pressure on core business performance.)

Year-Over-Year Comparison

Compared to the prior year, Greif, Inc. reported a 2.0% decrease in net sales for Q3 2025, reaching $1,134.7M. Net income attributable to Greif, Inc. saw a significant decline of 26.5% to $64.0M, and operating profit dropped sharply by 46.5% to $73.1M. This deterioration in profitability was largely driven by a substantial increase in restructuring and other charges, which rose from $2.7M to $25.2M year-over-year.

Filing Documents

• gef-20250731.htm (10-Q) — 1813KB
• gef2025q3ex101.htm (EX-10.1) — 57KB
• gef2025q3ex102.htm (EX-10.2) — 60KB
• gef2025q310-qex311.htm (EX-31.1) — 10KB
• gef2025q310-qex312.htm (EX-31.2) — 10KB
• gef2025q310-qex321.htm (EX-32.1) — 5KB
• gef2025q310-qex322.htm (EX-32.2) — 6KB
• gef-20250731_g1.jpg (GRAPHIC) — 25KB
• 0000043920-25-000048.txt ( ) — 10194KB
• gef-20250731.xsd (EX-101.SCH) — 57KB
• gef-20250731_cal.xml (EX-101.CAL) — 147KB
• gef-20250731_def.xml (EX-101.DEF) — 373KB
• gef-20250731_lab.xml (EX-101.LAB) — 797KB
• gef-20250731_pre.xml (EX-101.PRE) — 582KB
• gef-20250731_htm.xml (XML) — 1582KB

Financial Information

Part I. Financial Information 1 Financial Statements 3 Condensed Consolidated Statements of Income for the Three and Nine Months Ended Jul y 31 , 2025 and 2024 (Unaudited) 3 Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended July 31 , 2025 and 2024 (Unaudited) 4 Condensed Consolidated Balance Sheets at July 31 , 2025 (Unaudited) and October 31, 2024 5 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended July 31 , 2025 and 2024 (Unaudited) 7 Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended July 31 , 2025 and 2024 (Unaudited) 8 Notes to Condensed Consolidated Financial Statements (Unaudited) 10 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 29 4 Controls and Procedures 46

Other Information

Part II. Other Information 1A Risk Factors 47 6 Exhibits 47

Signatures

Signatures 48 2 Table of Content

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS GREIF, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended July 31, Nine Months Ended July 31, (in millions, except per share amounts) 2025 2024 2025 2024 Net sales $ 1,134.7 $ 1,164.9 $ 3,231.8 $ 3,247.9 Cost of products sold 877.4 920.0 2,519.9 2,576.7 Gross profit 257.3 244.9 711.9 671.2 Selling, general and administrative expenses 157.0 152.8 475.9 443.6 Acquisition and integration related costs 1.2 2.0 5.4 16.1 Restructuring and other charges 25.2 2.7 42.5 1.6 Non-cash asset impairment charges 3.4 0.2 27.8 1.9 Gain on disposal of properties, plants and equipment, net ( 2.6 ) ( 3.4 ) ( 3.7 ) ( 6.4 ) Loss (gain) on disposal of businesses, net — ( 46.1 ) 1.4 ( 46.1 ) Operating profit 73.1 136.7 162.6 260.5 Interest expense, net 14.5 18.8 46.3 29.4 Other expense, net 2.8 0.8 3.0 9.5 Income from continuing operations before income tax expense and equity earnings of unconsolidated affiliates, net 55.8 117.1 113.3 221.6 Income tax expense 11.8 33.5 38.0 16.0 Equity earnings of unconsolidated affiliates, net of tax ( 0.7 ) ( 0.9 ) ( 1.5 ) ( 2.1 ) Net income from continuing operations 44.7 84.5 76.8 207.7 Net income from discontinued operations, net of tax 24.7 9.1 61.5 12.2 Net income 69.4 93.6 138.3 219.9 Net income attributable to noncontrolling interests ( 5.4 ) ( 6.5 ) ( 18.4 ) ( 21.2 ) Net income attributable to Greif, Inc. $ 64.0 $ 87.1 $ 119.9 $ 198.7 Basic earnings per share attributable to Greif, Inc. common shareholders: Earnings from continuing operations per Class A common stock - basic $ 0.67 $ 1.35 $ 1.01 $ 3.24 Earnings from discontinued operations per Class A common stock - basic $ 0.43 $ 0.16 $ 1.06 $ 0.21 Earnings per Class A common stock - basic $ 1.10 $ 1.51 $ 2.07 $ 3.45 Earnings from continuing operations per Class B common stock - basic $ 1.02 $ 2.02 $ 1.51 $ 4.84 Earnings from discontinued operations per Clas

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