May 8, 2025 (Packaging Dive) –
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By the numbers: Q1 2025
Net sales: $1.27B
Down 4.3% year over year
Net earnings: $117M
Up 40.2% year over year
-- Overview:CEO Dustin Semach reported that Sealed Air had completed the final steps in a reorganization into two key business lines — food and protective — by creating distinct supply chains, planning, production and other functions.While results were still muted in certain areas, with lower volumes dragging sales by 2% year over year, he reported other positive trends during the company’s Tuesday earnings call.
-- Tariffs: Semach reported that “most of our products” aren’t affected by tariffs, due to an exemption for goods covered by the U.S.-Mexico-Canada Agreement, which “really minimized our exposure across both businesses.” For affected areas, he said “we are actively taking pricing actions, largely in food.”
-- Food: The company’s largest segment reported a 2% decline in net sales to $852 million, but a 1% increase in organics sales driven by higher price. Protein markets were relatively flat, due to shifting sales patterns in different geographies. Semach said even if consumers trade down from premium meats the company can adjust, noting a goal to gain retail market share and adding that “food is a more resilient business in any economic cycle.”
-- Protective: This segment’s net sales declined 9% to $420 million, driven by a 6% decrease in volumes. Industrial clients, which account for about 60% of business, are in a “low visibility” environment but have yet to notably change their buying patterns, Semach said. Results in the fulfillment category, which accounts for about 40% of business, were affected by a loss of business from Amazon early last year and “weakening” consumer sentiment as box shipments declined during Q1.
-- Turnaround plans: Semach said “the protective turnaround will take time to realize,” but noted the potential to “win back [market] share lost over the last couple of years” and positive signs on customer churn rates. “We've been putting more feet on the street, particularly in North America, over the past say, 90 days,” said Semach, calling it a “restoration” of sales staffing that had been cut during prior company restructuring cycles.
-- Cost reduction: The company is on track to hit $90 million in cost reductions this year, in part due to shifting certain back-office functions overseas, and may exceed a prior target of $150 million to $160 million. This followed $89 million in cost reductions during 2024, including facility closures.
-- Outlook: The company maintained its 2025 guidance of $5.1 billion to $5.5 billion in net sales, forecasting potential sequential improvements in sales and volumes for both segments heading into the second half of the year. Semach said no major changes are currently planned for the business and it’s focused on accelerating plans under new leadership. “We don't see large portfolio shifts at this point in time. We're really trying to optimize the business that we have, particularly in this current M&A environment.”
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