AptarGroup (NYSE:ATR) reported strong fourth-quarter revenue growth but saw profitability pressured by product mix and higher-than-anticipated costs, as executives highlighted both momentum across core businesses and near-term headwinds tied to emergency medicine demand.
Fourth-quarter results: revenue up, margins pressured
For the quarter ended December 31, 2025, Aptar reported sales of $963 million, up 14% from $848 million a year earlier. Core sales increased 5%, reflecting what CEO Stephan Tanda described as “healthy underlying demand across our portfolio,” with all three segments delivering core sales growth.
Adjusted EPS for the quarter was $1.25, compared with $1.62 in the prior year at comparable exchange rates. Kanu attributed the decline primarily to higher depreciation and amortization tied to capital investments and acquisitions, as well as higher interest expense from a higher average debt balance. The adjusted effective tax rate was 19.4% versus 13.5% a year earlier, when the company benefited from a one-time acquisition-related tax item.
Segment performance: pharma strength offset by emergency medicine decline
Pharma core sales increased 4% in the quarter, with performance varying across end markets. Prescription core sales grew 1%, as growth in systemic nasal drug delivery and higher royalty payments more than offset a steep decline in emergency medicine. Kanu said emergency medicine sales fell 36%; excluding emergency medicine, prescription core sales increased 10% year-over-year.
Within pharma, other areas were notably strong:
- Injectables core sales increased 24%, driven by demand for elastomeric components used for GLP-1, antithrombotics, and small molecules.
- Consumer healthcare core sales increased 3%, helped by higher sales of nasal decongestant and cough and cold solutions, marking a return to positive growth after customer inventory normalization.
- Active Material Science core sales decreased 10% due to a difficult comparison against a large tooling sale in Q4 2024 that did not repeat.
Pharma’s adjusted EBITDA margin was 32.4%, down 330 basis points year-over-year, which management attributed primarily to mix and volume effects tied to declining emergency medicine demand.
Beauty delivered 10% core sales growth in the quarter, with Kanu noting that roughly a quarter of the segment’s growth came from tooling. Fragrance, facial skincare, and color cosmetics rose 7%, supported by higher sales of Masstige and Prestige fragrance pumps as well as color cosmetics. Personal care grew 17%, with broad-based regional growth in body, hair, and sun care applications. Beauty’s adjusted EBITDA margin was 10.2%, down 220 basis points, reflecting lower-margin customer projects (including tooling), environmental upgrades at a metal anodization facility, and operational disruptions at a supplier that required qualifying a new supplier and conducting additional quality testing.
On the call, Tanda added that one supplier experienced a fire, contributing to higher costs and quality challenges. Management said these impacts should abate through the first half of 2026, with expectations for margin improvement quarter by quarter and “significant improvement” already in the first quarter.
Closures core sales increased 1%, with volumes up but offset by lower resin pricing pass-through. Food core sales decreased 1%, driven by lower sales of infant nutrition and granular powder, while beverage core sales increased 7% on higher sales for dairy and functional drinks. The closures adjusted EBITDA margin was 14.9%, down 120 basis points, due to equipment maintenance that impacted production and higher tooling sales, which typically carry lower margins. Tanda described dissatisfaction with “uptime and unscheduled maintenance,” while Kanu characterized the issue as a backlog of maintenance at one site that management expects to be transitory.
Full-year 2025: sales and EPS up; adjusted EPS slightly lower
For the year ended December 31, 2025, Aptar reported sales of $3.8 billion, up 5% from $3.6 billion in 2024. Core sales increased 2%. Reported net income rose 5% to $393 million, and reported EPS increased 7% to $5.89. Adjusted EPS was $5.74, down 1% year-over-year at comparable exchange rates.
Adjusted EBITDA increased 5% for the full year, and adjusted EBITDA margin was 21.6%, consistent with the prior year.
Free cash flow was $303 million, derived from $570 million of cash from operations less $267 million of capital expenditures net of government grants. Kanu said free cash flow was down $64 million year-over-year largely due to the timing of approximately $44 million in tax payments, about $10 million in higher pension contributions, and some higher working capital, partly offset by lower capital spending.
Capital allocation: dividends, repurchases, and new authorization
Management emphasized a “disciplined and balanced” capital allocation approach. In 2025, the company returned $486 million to shareholders through dividends and share repurchases. Aptar repurchased 2.7 million shares for $365 million, which Kanu said was the highest repurchase amount in the past decade.
The company also highlighted dividend continuity, with Tanda noting 2025 marked the 32nd consecutive year of paying an annually increasing dividend.
In addition, Aptar announced a new board authorization to repurchase up to $600 million of common stock, replacing existing authorizations. Management said the pace of repurchases is discretionary and may be funded through a mix of free cash flow and balance sheet flexibility.
During the fourth quarter, Aptar issued $600 million of 4.75% senior notes due March 2031. The company ended 2025 with $410 million in cash and short-term investments, net debt of about $1.1 billion, and a leverage ratio of 1.38.
Outlook: Q1 EPS range and ongoing emergency medicine headwind
For the first quarter of 2026, Aptar guided to adjusted EPS of $1.13 to $1.21, reflecting higher interest expense, an expected effective tax rate of 21% to 23%, and a euro-to-dollar exchange rate assumption of 1.18.
Management reaffirmed that declining emergency medicine demand will be a significant headwind through 2026. Kanu reiterated the company expects a roughly $65 million revenue headwind in 2026, with the impact more pronounced in the first half of the year and moderating year-over-year in the second half. Tanda suggested a “rule of thumb” split of roughly two-thirds of the headwind in the first half and one-third in the second half.
Despite the headwind, executives pointed to continued strength in systemic nasal drug delivery, injectables, and consumer healthcare, and said they are pursuing productivity measures and cost reductions, including back-office centralization through global talent centers and footprint optimization initiatives in beauty operations.
About AptarGroup (NYSE:ATR)
AptarGroup, Inc is a global provider of advanced dispensing, sealing and protection solutions for consumer and pharmaceutical markets. The company designs and manufactures a broad portfolio of products that enable the controlled delivery of liquids, gels, powders and aerosols. Its customer base spans beauty and personal care, home care, food and beverage, and pharmaceutical sectors, where innovation in packaging and drug‐delivery devices drives brand differentiation and regulatory compliance.
In the consumer markets, AptarGroup offers pumps, actuators, valves, closures and specialized bottles engineered for precision, convenience and sustainability.
