SONOCO PRODUCTS CO

Previous wording

Statements included in this Quarterly Report on Form 10-Q that are not historical in nature, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, Sonoco Products Company (the “Company” or “Sonoco”) and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as “aim,” “achieve,” “anticipate,” “assume,” “believe,” “can,” “commit,” “consider,” “continue,” “could,” “develop,” “estimate,” “expect,” “focus,” “forecast,” “foresee,” “future,” “goal,” “guidance,” “intend,” “is designed to,” “likely,” “maintain,” “may,” “might,” “objective,” “ongoing,” “opportunity,” “outlook,” “persist,” “plan,” “position,” “possible,” “potential,” “predict,” “project,” “remain,” “seek,” “should,” “strategy,” “target,” “will,” “would,” or the negative thereof, and similar expressions identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

Current wording

Statements included in this Quarterly Report on Form 10-Q that are not historical in nature, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, Sonoco Products Company (the “Company” or “Sonoco”) and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as “anticipate,” “assume,” “believe,” “can,” “consider,” “continue,” “could,” “estimate,” “expect,” “focus,” “forecast,” “foresee,” “future,” “guidance,” “intend,” “is designed to,” “likely,” “maintain,” “may,” “might,” “objective,” “ongoing,” “outlook,” “persist,” “plan,” “position,” “possible,” “potential,” “project,” “remain,” “seek,” “should,” “strategy,” “will,” “would,” or the negative thereof, and similar expressions identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

Previous wording

•supply chain disruptions and availability and supply of raw materials and energy, and offsetting high raw material, energy, and logistics costs;

Current wording

•supply chain disruptions and availability and supply of raw materials and energy, offsetting high raw material, energy, and logistics costs, and the related impact on margins;

Previous wording

•the effects of economic downturns, changing tariffs or trade policy, inflation, volatility and other macroeconomic factors on the Company and its industry, including the Company’s ability to manage such matters and their effects on suppliers, consumers and customers;

Current wording

•the effects of economic downturns, changing tariffs or trade policy, inflation, volatility and other macroeconomic factors on the Company and its industry, including the Company’s ability to manage such matters and their effects on suppliers, consumers and customers and the potential impact on operating costs, margins, competitiveness and long-term demand;

Previous wording

•capital allocation, including expected amounts of capital spending;

Current wording

•capital allocation, including expected amounts of capital spending and the expected benefits thereof;

Previous wording

•expected impact of new and changing regulations;

Current wording

•expected impact of new and changing regulations and other governmental actions;

Previous wording

•goodwill impairment charges and fair values of reporting units;

Current wording

•future goodwill impairment charges and fair values of reporting units;

Previous wording

•The acquisition of Eviosys, Europe’s leading food cans, ends and closures manufacturer, for net cash consideration of approximately $3.8 billion on December 4, 2024. This transaction, the largest in the Company’s history, expanded Sonoco’s global leadership in metal food can and aerosol packaging, facilitating our ability to partner with global customers to advance innovation and sustainability in metal packaging offerings.

Current wording

•The acquisition of Eviosys, Europe’s leading food cans, ends and closures manufacturer, for net cash consideration of approximately $3.8 billion on December 4, 2024. This transaction, the largest in the Company’s history, expanded Sonoco’s global leadership in metal food can and aerosol packaging, facilitating its ability to partner with global customers to advance innovation and sustainability in metal packaging offerings.

Previous wording

In addition, beginning in 2026 the Company consolidated its global metal packaging and rigid paper containers businesses under one structure based on two geographies — Consumer Packaging, Americas and Consumer Packaging, Europe, Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”). The Company believes the new geographically integrated structure creates a simpler and more efficient operating model that will lead to further innovation, collaboration and growth opportunities.

Current wording

In addition, beginning in 2026 the Company consolidated its global metal packaging and rigid paper containers businesses under one structure based on two geographies — Consumer Packaging, Americas and Consumer Packaging, Europe, Middle East and Africa (“EMEA”)/Asia-Pacific (“APAC”). The Company believes the new geographically integrated structure creates a simpler and more efficient operating model that will lead to further innovation, collaboration and growth opportunities. In August 2026, the Company aligned its global consumer packaging businesses under a single integrated leadership structure in order to better leverage its technology, supply chain, and research and development in an effort to meet the changing needs of its global customers.

Previous wording

The Company is investing $20.0 million in its Industrial Paper Packaging segment to add new nailed wood and steel reel production capacities at the Company’s Hartselle, Alabama, facilities to help meet growing wire and cable infrastructure demand to support AI data centers and other electrical grid investments. This expansion is expected to be completed before the end of 2026.

Current wording

The Company continues to invest in adding new nailed wood and steel reel production capacity in its Industrial Paper Packaging segment to help meet growing wire and cable infrastructure demand to support AI data centers and other electrical grid investments. Since 2024, the Company has invested over $25 million in the business, inclusive of planned expenditures for the remainder of 2026, and has grown the Company’s manufacturing capacity and footprint by more than 30% across its facilities in Hartselle, Alabama and Jefferson, Texas.

Previous wording

The Company remains focused on sustainability excellence and reducing its global carbon emissions. In February 2026, the Company announced that a Virtual Power Purchase Agreement developed between Sonoco and ENGIE North America, consisting of 60 wind turbines in Crockett County, Texas, had become operational.

Current wording

The Company remains focused on sustainability excellence and reducing its global carbon emissions. In February 2026, the Company announced that a Virtual Power Purchase Agreement developed between Sonoco and ENGIE North America, a regional hub of ENGIE, a major player in the energy industry, consisting of 60 wind turbines in Crockett County, Texas, had become operational.

Previous wording

The Company believes that its simplified structure will enable greater strategic and operational focus, help generate proceeds to fund deleveraging and further focus capital investments in the Company’s Consumer Packaging and Industrial Paper Packaging businesses, and deliver on its strategic priorities by driving sustainable growth, further expanding margins and efficiently allocating capital, maintaining a strong balance sheet and returning capital to shareholders. By transforming into a simpler, stronger and more sustainable company, the Company believes it is positioned to grow through the remainder of 2026 and beyond.

Current wording

Sonoco’s mission is to be the global leader in value-added, sustainable metal and fiber consumer and industrial packaging. The Company believes that its transformation into a simpler, stronger and more sustainable company will enable greater strategic and operational focus, help generate proceeds to fund deleveraging and further focus capital investments in the Company’s Consumer Packaging and Industrial Paper Packaging businesses, and deliver on its strategic priorities by driving sustainable growth, further expanding margins and efficiently allocating capital, maintaining a strong balance sheet and returning capital to shareholders.

Previous wording

Ongoing developments in U.S. and foreign trade policy have increased uncertainty for the global economy and the Company’s business. On March 4, 2025, the U.S. government imposed a 25% tariff on all imports from Canada or Mexico. After imposing this tariff, the U.S. government allowed for the temporary exemption from the tariff for any goods that comply with the United States-Mexico-Canada Agreement (“USMCA”), which has helped mitigate the impact of the tariff on the Company’s operations in North America. On February 10, 2025, the United States announced the expansion of Section 232 Tariffs on steel and aluminum imported into the United States, effective March 12, 2025, and the termination of the granting of new exclusions to mitigate these tariffs. As a result, imported steel and aluminum originating from most countries is currently subject to a 50% duty.

Current wording

Ongoing developments in U.S. and foreign trade policy have increased uncertainty for the global economy and the Company’s business. On March 4, 2025, the U.S. government imposed a 25% tariff on all imports from Canada or Mexico. After imposing this tariff, the U.S. government allowed for the temporary exemption from the tariff for any goods that comply with the United States-Mexico-Canada Agreement (“USMCA”), which has helped mitigate the impact of the tariff on the Company’s operations in North America. On August 22, 2026, the U.S. government imposed Section 338 tariffs of 50% on certain goods of Canadian origin. On September 8, 2026, Canada reciprocated by imposing up to a 50% tariff on certain goods of U.S. origin. This has impacted some of Sonoco’s products sold to customers on both sides of the border as the USMCA does not mitigate the impact of these new tariffs. The Company intends to pass any increases in costs to its customers.

Previous wording

The U.S. government also imposed reciprocal tariffs at a baseline rate of 10%, effective April 5, 2025, and later set firmly established tariff rates for various countries at the beginning of August 2025. For the most part, these reciprocal tariffs were incremental increases over the previously established 10% temporary reciprocal tariffs. On February 20, 2026, the U.S. Supreme Court invalidated certain of these tariffs. On April 20, 2026, U.S. Customs and Border Protection launched an electronic system to manage refunds for tariffs paid under the International Emergency Economic Powers Act (“IEEPA”). The Company has applied for refunds of all eligible IEEPA tariffs and has recovered approximately 80% of its overall claim as of the end of the second quarter of 2026. The amount of the recoveries to date has not been material nor are any future recoveries expected to be material.

Current wording

The U.S. government also imposed reciprocal tariffs at a baseline rate of 10%, effective April 5, 2025, and later set firmly established tariff rates for various countries at the beginning of August 2025. For the most part, these reciprocal tariffs were incremental increases over the previously established 10% temporary reciprocal tariffs. On February 20, 2026, the U.S. Supreme Court invalidated certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). The Company has applied for refunds of all eligible IEEPA tariffs where Sonoco was the importer of record and, as of the end of the third quarter of 2026, has recovered the substantial majority of its overall claim. The amount of recoveries to date was not material.

Previous wording

Effective April 6, 2026, the United States overhauled Section 232 tariffs on steel and aluminum moving from a metal-content-based assessment to the full customs value of the imported goods. Under the revised rules, many steel and aluminum products, along with their derivative articles, now face significantly higher tariffs. The metal ends that the Company imports into the United States are now subject to a 25% tariff. Future changes in tariff and trade policy may result in additional changes, the exact scope of which is not known at this time. While the full impact of the most recent Section 232 changes is uncertain, the Company does not currently expect the current tariff environment to have a material direct effect on its profitability or cash flows over the remainder of 2026 because the Company’s manufacturing network is designed to serve local markets, reducing its exposure to cross-border disruptions and tariff-related risks. While the Company is actively working with its customers to help manage the impacts of higher input costs driven by tariffs, its business model allows for pricing adjustments when necessary. In addition, the Company believes its transformed portfolio following the Eviosys acquisition and the divestitures of its TFP and ThermoSafe businesses is significantly more resilient, with nearly two-thirds of the Company’s sales in 2025 and the first half of 2026 coming from the Consumer Packaging segment, a segment that has historically demonstrated strong performance across economic cycles. In addition, while the Section 232 Tariffs impact input costs for the Company’s U.S.-based operations with Consumer Packaging, Americas, which source a portion of their steel and aluminum purchases from outside the United States, the Company intends, and has the contractual ability, to continue to pass such increases in cost due to tariffs to its customers.

Current wording

Effective April 6, 2026, the U.S. government overhauled Section 232 tariffs on steel and aluminum moving from a metal-content-based assessment to the full customs value of the imported goods. Under the revised rules, many steel and aluminum products, along with their derivative articles, now face significantly higher tariffs. The metal ends that the Company imports into the United States are now subject to a 25% tariff. While the full impact of the most recent Section 232 changes is uncertain, the Company does not currently expect the current tariff environment to have a material direct effect on its profitability or cash flows over the remainder of 2026 because the Company’s manufacturing network is designed to serve local markets, reducing its exposure to cross-border disruptions and tariff-related risks. While the Company is actively working with its customers to help manage the impacts of higher input costs driven by tariffs, its business model allows for pricing adjustments when necessary. In addition, the Company believes its transformed portfolio following the Eviosys acquisition and the divestitures of its TFP and ThermoSafe businesses is significantly more resilient, with nearly two-thirds of the Company’s sales in 2025 and the first nine months of 2026 coming from the Consumer Packaging segment, a segment that has historically demonstrated strong performance across economic cycles. In addition, while the Section 232 tariffs impact input costs for the Company’s U.S.-based operations with Consumer Packaging, Americas, which source a portion of their steel and aluminum purchases from outside the United States, the Company intends, and has the contractual ability, to continue to pass such increases in cost due to tariffs to its customers.

Previous wording

The ongoing conflict between the United States and Iran has introduced additional volatility into global energy markets, shipping corridors, and raw material supply chains. The Company relies on a diversified global supplier base for resin, chemicals, adhesives, and other inputs, some of which are indirectly influenced by crude-oil-linked pricing or international transportation costs. As a result of this geopolitical and macroeconomic uncertainty, the Company expects inflation related to input costs, energy, and logistics to persist over the second half of 2026; however, it does not expect these cost pressures to materially impact the Company’s ability to source materials, operate facilities, or meet customer demand. The Company does not expect these factors to materially impact its near-term financial performance based on cost recovery actions through recognized market price increases and contractual price resets. However, the duration and broader economic consequences of the conflict, including the potential for further increases in energy and logistics costs, remain uncertain. The Company will continue to evaluate developments in the geopolitical environment and adjust its risk management strategies as appropriate.

Current wording

The ongoing conflict between the United States and Iran has introduced additional volatility into global energy markets, shipping corridors, and raw material supply chains. The Company relies on a diversified global supplier base for resin, chemicals, adhesives, and other inputs, some of which are indirectly influenced by crude-oil-linked pricing or international transportation costs. As a result of this geopolitical and macroeconomic uncertainty, the Company expects inflation related to input costs, energy, and logistics to persist over the remainder of 2026; however, it does not expect these cost pressures to materially impact the Company’s ability to source materials, operate facilities, or meet customer demand. The Company does not expect these factors to materially impact its near-term financial performance based on cost recovery actions through recognized market price increases and contractual price resets. However, the duration and broader economic consequences of the conflict, including the potential for further increases in energy and logistics costs, remain uncertain. The Company will continue to evaluate developments in the geopolitical environment and adjust its risk management strategies as appropriate.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA"), which includes a broad range of tax reform provisions and extends or modifies certain provisions of prior tax legislation, was signed into law in the United States. The Company evaluated the effects of the OBBBA in accordance with ASC 740 and determined that enactment of the legislation did not result in a material adjustment to its income tax accounts upon enactment. Based on the Company’s assessment, the OBBBA is not expected to have a material impact on the Company’s consolidated effective tax rate, results of operations, financial position or cash flows for 2026. While certain provisions of the OBBBA are expected to provide future tax benefits, largely through acceleration of deductions to benefit cash taxes, the overall impact is not currently expected to be material. The Company will continue to monitor the implementation of the OBBBA and related regulatory, administrative and interpretive guidance and will evaluate the effects of any such guidance as it becomes available.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”), which includes a broad range of tax reform provisions and extends or modifies certain provisions of prior tax legislation, was signed into law in the United States. The Company evaluated the effects of the OBBBA in accordance with ASC 740 and determined that enactment of the legislation did not result in a material adjustment to its income tax accounts. During the third quarter of 2026, tax regulations were issued that clarified the application of certain provisions of the OBBBA and are expected to have a favorable impact on the Company’s effective tax rate beginning in 2026, as well as future cash-tax benefits. Based on the information currently available, the Company does not expect these effects to be material to its consolidated results of operations, financial position or cash flows. The Company will continue to evaluate the effects of the OBBBA and related regulatory, administrative and interpretive guidance as additional information becomes available.

Previous wording

Consolidated net sales for the second quarter of 2026 were $1.9 billion, a $(25.0) million or (1.3)% decline from the second quarter of 2025. The November 2025 divestiture of ThermoSafe reduced sales by $(65.7) million in the second quarter of 2026 compared to the same period last year while lower volumes further reduced sales by $(22.9) million as continuing macroeconomic and geopolitical pressures weighed on both the Company’s supply chain and its customers. These decreases were partially offset by a $37.0 million benefit from higher selling prices implemented to offset the effects of inflation and tariffs and the favorable impact from foreign currency translation of $29.3 million. All other factors contributed to a net reduction of $(2.7) million in the second quarter of 2026 compared to the same period last year.

Current wording

Consolidated net sales for the third quarter of 2026 were $2.0 billion, a $(89.5) million or (4.2)% decline from the third quarter of 2025. The November 2025 divestiture of ThermoSafe reduced net sales by $(79.3) million in the third quarter of 2026 compared to the same period last year while unfavorable volume/mix further reduced net sales by $(44.9) million as continuing macroeconomic and geopolitical pressures weighed on both the Company’s supply chain and its customers and adverse weather conditions impacted seasonal vegetable harvests in both EMEA and the Americas, reducing metal can volumes. These decreases were partially offset by a $46.2 million benefit from higher selling prices implemented to offset the effects of inflation and tariffs. The unfavorable impact from foreign currency translation reduced sales by $(8.5) million and all other factors contributed to a net reduction of $(3.0) million in the third quarter of 2026 compared to the same period last year.

Previous wording

GAAP operating profit for the second quarter of 2026 was $192.8 million, an increase of 9.8% from the $175.7 million reported in the second quarter of 2025. The increase in GAAP operating profit was primarily due to productivity savings from fixed cost reduction initiatives and procurement savings of $18.7 million, lower acquisition, integration and divestiture-related costs of $9.1 million, lower restructuring costs of $7.8 million, higher gains on the sale of businesses of $4.7 million, and the net favorable impact of foreign currency translation and other items totaling $5.1 million. These favorable impacts were partially offset by unfavorable price/cost of $(11.8) million, the impact of the ThermoSafe divestiture of $(8.9) million, and unfavorable volume/mix of $(7.6) million. Adjusted Operating Profit for the second quarter of 2026 was $242.4 million, a decrease of (1.8)% from the $246.9 million reported for the same period in 2025, primarily resulting from the impact of the ThermoSafe divestiture.

Current wording

GAAP operating (loss)/profit for the third quarter of 2026 was $(638.0) million compared with $195.0 million reported in the third quarter of 2025. The loss in the current year quarter was primarily due to the recognition of non-cash goodwill impairment charges totaling $828.9 million in the Consumer Packaging EMEA/APAC and Global Paper Products APAC reporting units. The remaining net $(4.1) million change in GAAP operating profit is the result of unfavorable price/cost of $(51.6) million, the impact of the ThermoSafe divestiture of $(16.9) million, and unfavorable volume/mix of $(6.9) million, partially offset by the favorable impacts of productivity savings from fixed cost reduction initiatives and procurement savings of $41.4 million, lower restructuring costs of $20.8 million, lower acquisition, integration and divestiture-related costs of $7.2 million, and a lower loss from the sale of businesses of $3.0 million. All other factors, including the unfavorable impact of foreign currency translation, totaled $(1.1) million. Adjusted Operating Profit for the third quarter of 2026 was $268.0 million, a decrease of (13.1)% from the $308.3 million reported for the same period in 2025 as the unfavorable impacts of price/cost and volume/mix, along with the impact of the ThermoSafe divestiture, more than offset the favorable impacts of productivity and procurement savings.

Previous wording

GAAP net income attributable to Sonoco for the second quarter of 2026 decreased to $104.9 million, or $1.05 per diluted share, compared to $493.4 million, or $4.96 per diluted share, for the second quarter of 2025. The quarter-over-quarter reduction was primarily due to net income from discontinued operations in the prior year of $424.5 million related to the April 2025 divestiture of TFP. The impact of this reduction was partially offset by the increase in GAAP operating profit as described above and lower net interest expense, as described more fully below. Adjusted net income attributable to Sonoco and Adjusted diluted EPS for the second quarter of 2026 were $150.5 million (or $1.51 per diluted share), compared with $136.1 million (or $1.37 per diluted share) for the same period in 2025.

Current wording

GAAP net (loss)/income attributable to Sonoco was a loss of $(732.1) million, or $(7.36) per diluted share, for the third quarter of 2026, compared to income of $122.9 million, or $1.23 per diluted share, for the third quarter of 2025. The quarter-over-quarter reduction was primarily due to the $828.9 million of non-cash goodwill impairment charges recognized in 2026, for which there is no income tax benefit. The remaining net reduction of $(26.1) million was attributable to the after-tax impacts of the GAAP operating (loss)/profit items discussed above and lower net interest expense, as described more fully below. Adjusted net income attributable to Sonoco and Adjusted diluted EPS for the third quarter of 2026 were $167.2 million (or $1.67 per diluted share), compared with $191.2 million (or $1.92 per diluted share) for the same period in 2025.

Previous wording

Cost of sales decreased by $(11.1) million, or (0.7)%, in the second quarter of 2026 compared with the second quarter of 2025. This decrease resulted from a $(49.0) million impact from the divestiture of ThermoSafe and lower labor costs of $(18.4) million, partially offset by higher direct material costs of $36.9 million and higher outbound freight costs of $20.5 million. Other favorable factors resulted in a net reduction in cost of sales totaling $(1.1) million. Gross profit margins decreased slightly to 20.8% in the second quarter of 2026 from 21.3% in the second quarter of 2025.

Current wording

Cost of sales decreased by $(27.5) million, or (1.7)%, in the third quarter of 2026 compared with the third quarter of 2025. This decrease resulted from a $(55.7) million impact from the divestiture of ThermoSafe and lower labor costs of $(26.7) million, partially offset by higher direct material costs of $46.4 million and higher outbound freight costs of $15.6 million. Other net favorable factors resulted in a reduction in cost of sales totaling $(7.1) million. Gross profit margins decreased to 19.9% in the third quarter of 2026 from 21.9% in the third quarter of 2025.

Previous wording

Selling, general and administrative costs decreased by $(18.5) million, or (8.5)%, and were 10.6% of sales in the second quarter of 2026, compared to 11.5% of sales in the second quarter of 2025. This decrease reflects lower acquisition, integration, and divestiture-related costs of $(9.1) million, reduced costs from the ThermoSafe divestiture of $(7.8) million, and other net decreases, primarily salaries and benefits, totaling $(1.6) million.

Current wording

Selling, general and administrative expenses decreased by $(34.1) million, or (15.4)%, and were 9.2% of sales in the third quarter of 2026, compared to 10.4% of sales in the third quarter of 2025. This decrease reflects lower salaries and benefits of $(18.2) million, reflecting the favorable impact of restructuring actions and lower year-over-year accruals for management incentive and share-based compensation, reduced costs from the ThermoSafe divestiture of $(8.3) million, and lower acquisition, integration, and divestiture-related costs of $(7.2) million. All other changes resulted in a net quarter-over-quarter change of $(0.4) million.

Previous wording

Restructuring/Asset impairment charges totaled $1.9 million in the second quarter of 2026, compared with $9.8 million during the same period last year. The net charges in the current year related primarily to ongoing costs related to prior year plant closures and headcount eliminations in conjunction with the Company’s ongoing organizational effectiveness efforts, partially offset by reductions resulting from revisions to the estimates of total severance to be paid. Additional information regarding restructuring and asset impairment charges is provided in Note 6 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Goodwill, asset impairment, and restructuring charges, net totaled $856.4 million in the third quarter of 2026, compared with $48.4 million during the same period last year. The net charges in the current year related primarily to goodwill impairment charges in the Company’s Consumer Packaging EMEA/APAC and Global Paper Products APAC reporting units totaling $828.9 million and restructuring-related charges of $27.6 million. The restructuring-related charges reflect costs associated with the closure of a metal packaging facility in the United Kingdom and ongoing costs related to prior year plant closures and headcount eliminations in conjunction with the Company’s ongoing organizational effectiveness efforts, partially offset by a gain from the sale of a building at a previously closed facility. Additional information regarding restructuring and asset impairment charges is provided in Note 6 and Note 8 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Gain/(Loss) on divestiture of business in the second quarter of 2026 and 2025 was a gain of$2.6 million from the sale of the Company’s recycling operations in Savannah, Georgia, and a loss of$(2.1) million from the sale of the Company’s recycling operations in Asheville, North Carolina, respectively. These operations were part of the Industrial Paper Packaging segment. See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

(Loss)/Gain on divestiture of business in the third quarter of 2025 reflects a $3.0 million charge relating to the divestiture of ThermoSafe, part of the All Other group of businesses, which was pending at that time. See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

Other expense, net was $6.2 million and $6.6 million in the second quarter of 2026 and 2025, respectively. The amounts in both years are comprised of charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivable in order to accelerate its cash collection cycle, primarily within our Consumer Packaging segment.

Current wording

Other expense, net was$8.3 million and $7.5 million in the third quarter of 2026 and 2025, respectively. The amounts in both years are comprised of charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivable in order to accelerate its cash collection cycle, primarily within our Consumer Packaging segment.

Previous wording

Non-operating pension costs decreased by $(0.1) million during the second quarter of 2026 versus the same period last year. The decrease is primarily due to higher expected return on plan assets and lower interest charges, partially offset by higher settlement and curtailment charges. Additional information regarding costs of the Company’s retirement plans is provided in Note 13 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Non-operating pension costs decreased by$(0.3) million during the third quarter of 2026 versus the same period last year. The decrease is primarily due to higher expected return on plan assets and lower interest charges, partially offset by higher settlement charges. Additional information regarding costs of the Company’s retirement plans is provided in Note 13 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Net interest expense for the second quarter of 2026 decreased to $41.4 million, compared with $60.2 million during the second quarter of 2025, primarily due to lower average debt levels resulting from the Company’s repayment of debt during 2025 utilizing proceeds from the divestitures of TFP and ThermoSafe.

Current wording

Net interest expense for the third quarter of 2026 decreased to $41.4 million, compared with $56.6 million during the third quarter of 2025, primarily due to lower average debt levels resulting from the Company’s repayment of debt during the fourth quarter of 2025 utilizing proceeds from the divestiture of ThermoSafe.

Previous wording

The effective tax rates on GAAP income from continuing operations before income taxes and Adjusted income from continuing operations before income taxes in the second quarter of 2026 were 27.8% and 23.8%, respectively, compared with 37.3% and 25.6%, respectively, in the corresponding prior year quarter. The decrease in the GAAP effective tax rate was primarily due to the absence of non-GAAP adjustments for restructuring and other discrete one-time items which were present in 2025.

Current wording

The effective tax rates on GAAP income from continuing operations before income taxes and Adjusted income from continuing operations before income taxes in the third quarter of 2026 were(6.4)%and 24.6%, respectively, compared with 6.0% and 22.9%, respectively, in the corresponding prior year quarter. The decrease in the GAAP effective tax rate was primarily due to the goodwill impairments recorded in the third quarter of 2026 for which there is no tax benefit.

Previous wording

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. During 2025, the All Other group of businesses consisted of ThermoSafe and Industrial Plastics. With the divestiture of ThermoSafe in November 2025, only Industrial Plastics remained. Effective January 1, 2026, the Company changed its operating and management reporting structure to include the results of Industrial Plastics in the Company’s Industrial Paper Packaging segment and discontinued the use of All Other. Results for prior periods have been revised to conform with the current presentation.

Current wording

The Company’s operating and reporting structure consists oftwo reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. During 2025, the All Other group of businesses consisted of ThermoSafe and Industrial Plastics. With the divestiture of ThermoSafe in November 2025, only Industrial Plastics remained. Effective January 1, 2026, the Company changed its operating and management reporting structure to include the results of Industrial Plastics in the Company’s Industrial Paper Packaging segment and discontinued the use of All Other. Results for prior periods have been revised to conform with the current presentation.

Previous wording

The following table summarizes net sales attributable to each of the Company’s segments for the second quarters of 2026 and 2025 and the All Other group of businesses for the second quarter of 2025:

Current wording

The following table summarizes net sales attributable to each of the Company’s segments for the third quarters of 2026 and 2025 and the All Other group of businesses for the third quarter of 2025:

Previous wording

The following table summarizes operating profit attributable to each of the Company’s reportable segments, and Corporate-related activity for the second quarters of 2026 and 2025 and the All Other group of businesses for the second quarter of 2025:

Current wording

The following table summarizes operating profit attributable to each of the Company’s reportable segments, and Corporate-related activity for the third quarters of 2026 and 2025 and the All Other group of businesses for the third quarter of 2025:

Previous wording

Segment net sales increased $14.8 million, or 1.2%, over the prior year quarter as the favorable impact of foreign exchange rates added $20.3 million and price increases implemented to recover inflation and tariff-related costs added approximately $18.9 million of sales. These favorable factors were partially offset by softer volume/mix across the segment of $(22.1) million as higher paper can volumes in EMEA/APAC due to rising snack demand were more than offset by lower demand for metal aerosol cans and sealant tubes. Other unfavorable factors reduced quarter-over-quarter sales by $(2.3) million.

Current wording

Segment net sales decreased $(42.2) million, or(2.9)%, over the prior year quarter as softer volume/mix of $(46.5) million was experienced across the segment largely as a result of the impact of adverse weather conditions on seasonal vegetable harvests in both EMEA and the Americas, reducing metal can volumes, along with the negative impact of foreign exchange of $(10.7) million. These headwinds more than offset the $15.9 million benefit from pricing actions implemented to recover inflation and tariff-related costs and continued volume growth in paper cans in EMEA/APAC. Other unfavorable factors reduced quarter-over-quarter net sales by $(0.9) million.

Previous wording

Segment operating profit decreased(5.4)%compared to the corresponding quarter last year, though continued productivity and disciplined cost management helped mitigate the impact of softer volumes. Segment operating profit margin was 12.2% and 13.1% in the second quarter of 2026 and 2025, respectively.

Current wording

Segment operating profit decreased(14.6)%compared to the corresponding quarter last year, as strong productivity savings and cost containment actions were more than offset by inflation-driven price/cost headwinds and the volume shortfalls noted above. Segment operating profit margin was 12.8% and 14.5% in the third quarter of 2026 and 2025, respectively.

Previous wording

The primary products produced and sold within the Industrial Paper Packaging segment include goods produced from recycled fiber, including paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboardfor folding cartons, can board and laminated structures. Products across this segment support end markets, primarily in paper, textile, and films.

Current wording

The primary products produced and sold within the Industrial Paper Packaging segment include goods produced from recycled fiber, including paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboard for folding cartons, can board and laminated structures. Products across this segment support end markets, primarily in paper, textile, and films.

Previous wording

The following discussion provides a review of results for the six-month period ended June 28, 2026 compared with the six-month period ended June 29, 2025.

Current wording

The following discussion provides a review of results for the nine-month period ended September 27, 2026 compared with the nine-month period ended September 28, 2025.

Previous wording

Consolidated net sales for the first six months of 2026 were $3.6 billion, a $(57.7) million or (1.6)% decline from the same period last year. The November 2025 divestiture of ThermoSafe reduced year-over-year sales by $(120.9) million in the first six months of 2026 compared to the same period last year while lower volumes further reduced year-over-year sales by $(120.8) million as macroeconomic and geopolitical pressures weighed on both the Company’s supply chain and its customers. These decreases were partially offset by a $75.8 million benefit from higher selling prices implemented to offset the effects of inflation and tariffs and the favorable impact from foreign currency translation of $116.4 million. All other factors contributed to a net reduction of $(8.2) million in the first six months of 2026 compared to the same period last year.

Current wording

Consolidated net sales for the first nine months of 2026 were $5.6 billion, a $(147.3) million or (2.6)% decline from the same period last year. The November 2025 divestiture of ThermoSafe reduced year-over-year sales by $(201.1) million in the first nine months of 2026 compared to the same period last year, while unfavorable volume/mix further reduced year-over-year sales by $(165.4) million as macroeconomic and geopolitical pressures weighed on both the Company’s supply chain and its customers. These decreases were partially offset by a $122.0 million benefit from higher selling prices implemented to offset the effects of inflation and tariffs and the favorable impact from foreign currency translation of $107.9 million. All other factors contributed to a net reduction of $(10.7) million in the first nine months of 2026 compared to the same period last year.

Previous wording

GAAP operating profit for the first six months of 2026 was $319.9 million, an increase of 5.8% from the $302.5 million reported for the first six months of 2025. The increase in GAAP operating profit was primarily due to productivity savings from fixed cost reduction initiatives and procurement savings of $24.2 million, lower acquisition, integration and divestiture-related costs of $30.0 million, the favorable impact of foreign currency translation of $15.3 million, higher gains on the sale of businesses of $7.0 million, and lower restructuring costs of $6.3 million. These favorable impacts were partially offset by unfavorable volume/mix of $(50.7) million, the impact of the ThermoSafe divestiture of $(16.1) million, and unfavorable price/cost of $(4.8) million. All other items comprised a net favorable year-over-year impact of $6.2 million. Adjusted operating profit for the first six months of 2026 was $443.2 million, a decrease of (3.6)% from the $459.7 million reported for the same period in 2025.

Current wording

GAAP operating (loss)/profit for the first nine months of 2026 was $(318.0) million, compared with $497.5 million reported for the first nine months of 2025. The loss in the current year quarter was primarily due to the recognition of non-cash goodwill impairment charges totaling $828.9 million in the Consumer Packaging EMEA/APAC and Global Paper Products APAC reporting units. The remaining net year-over-year change in GAAP operating (loss)/profit of $13.4 million was due to productivity savings from fixed cost reduction initiatives and procurement savings of $97.6 million, lower acquisition, integration and divestiture-related costs of $37.2 million, lower restructuring costs of $27.1 million, the favorable impact of foreign currency translation of $14.4 million, and a lower net loss on the divestiture of businesses of $10.1 million. These favorable impacts were partially offset by unfavorable volume/mix of $(61.5) million, unfavorable price/cost of $(56.4) million, and the impact of the ThermoSafe divestiture of $(38.1) million. All other items provided a net unfavorable year-over-year impact of $(17.0) million. Adjusted operating profit for the first nine months of 2026 was $711.3 million, a decrease of (7.4)% from the $768.0 million reported for the same period in 2025.

Previous wording

GAAP net income attributable to Sonoco for the first six months of 2026 decreased to $172.5 million, or $1.73 per diluted share, compared to $547.9 million, or $5.51 per diluted share, reported for the same period of 2025. The year-over-year reduction was primarily due to net income from discontinued operations in the prior year of $429.7 million related to the April 2025 divestiture of TFP. The impact of this reduction was partially offset by the increase in GAAP operating profit as described above, lower interest expense, and the impact of a lower GAAP effective tax rate in the current year. Adjusted net income attributable to Sonoco and Adjusted diluted EPS for the six-month period ended June 28, 2026 decreased (1.1)% to $269.9 million, or $2.71 per diluted share, from $273.0 million, or $2.74 per diluted share, in the six-month period ended June 29, 2025.

Current wording

GAAP net (loss)/income attributable to Sonoco for the first nine months of 2026 was a net loss of $(559.6) million, or $(5.63) per diluted share, compared to net income of $670.8 million, or $6.74 per diluted share, reported for the same period of 2025. The year-over-year reduction was primarily due to the $828.9 million of non-cash goodwill impairment charges recognized in 2026, for which there is no income tax benefit, and net income from discontinued operations in 2025 of $429.7 million related to the April 2025 divestiture of TFP. The remaining change of $28.2 million was attributable to the after-tax impacts of the GAAP operating (loss)/profit items discussed above and lower net interest expense, partially offset by higher “Other expenses, net,” as described more fully below. Adjusted net income attributable to Sonoco and Adjusted diluted EPS for the nine-month period ended September 27, 2026 decreased (5.8)% to $437.1 million, or $4.38 per diluted share, from $464.1 million, or $4.66 per diluted share, in the nine-month period ended September 28, 2025.

Previous wording

Cost of sales decreased by $(35.8) million, or (1.3)%, in the first six months of 2026 compared with the first six months of 2025. This year-over-year decrease resulted from a $(89.3) million impact from the divestiture of ThermoSafe, lower labor costs of $(37.3) million, and the non-recurrence of inventory step-up amortization totaling $(18.0) million related to the Company’s December 2024 acquisition of Eviosys. Partially offsetting these decreases were higher year-over-year direct material and outbound freight costs of $81.0 million and $27.5 million, respectively. Other factors resulted in a net increase in cost of sales totaling $0.3 million. Gross profit margins were 20.7% for the first six months of 2026 and 21.0% for the first six months of 2025.

Current wording

Cost of sales decreased by $(63.3) million, or (1.4)%, in the first nine months of 2026 compared with the first nine months of 2025. This year-over-year decrease resulted from a $(145.0) million impact from the divestiture of ThermoSafe, lower labor costs of $(64.0) million, and the non-recurrence of inventory step-up amortization totaling $(18.2) million related to the Company’s December 2024 acquisition of Eviosys. Partially offsetting these decreases were higher year-over-year direct material and outbound freight costs of $127.3 million and $43.0 million, respectively. All other factors resulted in a net reduction in cost of sales totaling $(6.4) million. Gross profit margins were 20.4% for the first nine months of 2026 and 21.3% for the first nine months of 2025.

Previous wording

Selling, general and administrative costs for the first six months of 2026 decreased $(26.1) million, or (6.1)%, year over year. This decrease reflects lower acquisition, integration, and divestiture-related costs of $(12.0) million, reduced costs from the ThermoSafe divestiture of $(15.4) million, and other net increases, primarily salaries and benefits, totaling $1.3 million.

Current wording

Selling, general and administrative expenses for the first nine months of 2026 decreased $(60.2) million, or (9.3)%, year over year. This decrease reflects reduced costs from the ThermoSafe divestiture of $(23.7) million, lower acquisition, integration, and divestiture-related costs of $(18.7) million, and other net decreases, primarily salaries and benefits, totaling $(17.8) million.

Previous wording

Restructuring/Asset impairment charges totaled $17.1 million during the first six months of 2026, compared with $23.3 million during the same period last year. Restructuring charges in the first six monthsof 2025 included higher costs related to the closures of cone facilities in Taiwan and Mexico and a metal packaging facility in Spain. The net charges in the current year related primarily to ongoing costs related to these and other prior-year plant closures and headcount eliminations in conjunction with the Company’s ongoing organizational effectiveness efforts, partially offset by reductions resulting from revisions to the estimates of total severance to be paid. Additional information regarding restructuring and asset impairment charges is provided in Note 6 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Goodwill, asset impairment and restructuring charges, net totaled $873.5 million during the first nine months of 2026, compared with $71.7 million during the same period last year. The current year reflects goodwill impairment charges in the Company’s Consumer Packaging EMEA/APAC and Global Paper Products APAC reporting units totaling $828.9 million and restructuring-related charges of $44.6 million, consisting of costs related to the closure of a metal packaging facility in the United Kingdom, ongoing costs related to prior year plant closures, and headcount eliminations in conjunction with the Company’s ongoing organizational effectiveness efforts, partially offset by a gain from the sale of a building at a previously closed facility. Restructuring-related charges in the first nine months of 2025 included costs related to the closures of cone facilities in Taiwan and Mexico and a metal packaging facility in Spain, and severance related to headcount eliminations in conjunction with the Company’s ongoing organizational effectiveness efforts. Additional information regarding restructuring and asset impairment charges is provided in Note 6 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.