Consumer packaging solutions provider Graphic Packaging Holding (NYSE: GPK) reported Q3 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 1.2% year on year to $2.19 billion. On the other hand, the company’s full-year revenue guidance of $8.5 billion at the midpoint came in 0.6% below analysts’ estimates. Its non-GAAP profit of $0.58 per share was 3.2% above analysts’ consensus estimates.

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Michael Doss, the Company's President and CEO said, "Against a backdrop of sluggish consumer volumes, we executed well in the quarter, reduced inventory, and saw our innovation engine open new markets for paperboard packaging. As food affordability challenges ease, the full power of our business model and its cash generating potential will become even more apparent.

Company Overview

Founded in 1991, Graphic Packaging (NYSE: GPK) is a provider of paper-based packaging solutions for a wide range of products.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Graphic Packaging Holding grew its sales at a mediocre 6% compounded annual growth rate. This was below our standard for the industrials sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Graphic Packaging Holding’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.1% annually.

This quarter, Graphic Packaging Holding’s revenue fell by 1.2% year on year to $2.19 billion but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection implies its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Graphic Packaging Holding has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.2%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Looking at the trend in its profitability, Graphic Packaging Holding’s operating margin rose by 3.6 percentage points over the last five years, as its sales growth gave it operating leverage. Its expansion was impressive, especially when considering most Industrial Packaging peers saw their margins plummet.

In Q3, Graphic Packaging Holding generated an operating margin profit margin of 10.7%, down 1.9 percentage points year on year. Since Graphic Packaging Holding’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Graphic Packaging Holding’s EPS grew at a spectacular 14.7% compounded annual growth rate over the last five years, higher than its 6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Graphic Packaging Holding’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Graphic Packaging Holding’s operating margin declined this quarter but expanded by 3.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Graphic Packaging Holding, its two-year annual EPS declines of 12.8% mark a reversal from its (seemingly) healthy five-year trend. We hope Graphic Packaging Holding can return to earnings growth in the future.

In Q3, Graphic Packaging Holding reported adjusted EPS of $0.58, down from $0.64 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 3.2%. Over the next 12 months, Wall Street expects Graphic Packaging Holding’s full-year EPS of $2.10 to shrink by 2.4%.

Key Takeaways from Graphic Packaging Holding’s Q3 Results

It was good to see Graphic Packaging Holding narrowly top analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EBITDA guidance missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 4.2% to $14.99 immediately after reporting.

Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.