Sealed Air’s first quarter results were met with a positive market reaction, as management attributed the performance to ongoing transformation efforts and operational discipline in both its Food and Protective businesses. CEO Dustin Semach highlighted the completion of realigning supply chains and go-to-market teams, which has improved responsiveness to end-market volatility. The company’s ability to deliver on cost takeout and productivity measures was a key factor, with Semach emphasizing, “We’ve continued to drive productivity initiatives and cost takeout, focusing on improving our cost positions in both businesses.” Despite a year-on-year sales decline, Sealed Air’s steady operating margin reflected effective execution on these initiatives.
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Sealed Air (SEE) Q1 CY2025 Highlights:
- Revenue: $1.27 billion vs analyst estimates of $1.27 billion (4.3% year-on-year decline, 0.5% beat)
- Adjusted EPS: $0.81 vs analyst estimates of $0.67 (20.9% beat)
- Adjusted EBITDA: $276.3 million vs analyst estimates of $260.3 million (21.7% margin, 6.2% beat)
- The company reconfirmed its revenue guidance for the full year of $5.3 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $3.10 at the midpoint
- EBITDA guidance for the full year is $1.13 billion at the midpoint, above analyst estimates of $1.1 billion
- Operating Margin: 14.4%, in line with the same quarter last year
- Sales Volumes fell 2% year on year (0.5% in the same quarter last year)
- Market Capitalization: $4.55 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Sealed Air’s Q1 Earnings Call
- Ghansham Panjabi (Baird) asked for specifics on Protective’s volume progress and vertical trends. CEO Dustin Semach detailed that large customer churn has now fully lapped, leading to an expected sequential improvement in volume, especially in fulfillment.
- George Staphos (Bank of America Securities) inquired about balancing customer satisfaction with cost takeout. Semach explained that supply chain savings have been redeployed into Protective sales, improving customer engagement without sacrificing efficiency.
- Matt Roberts (Raymond James) questioned price trends and competitive dynamics. Semach indicated that competitive pressures, especially in Protective after Amazon’s exit from the segment, have kept net pricing relatively flat, with no significant material cost inflation so far.
- Josh Spector (UBS) sought clarity on Protective’s second-half volume assumptions and tariff risks in equipment sourcing. Semach confirmed expectations for a 1% volume decline in the second half and noted that tariff exposure in equipment is immaterial and being actively managed through supply chain adjustments.
- Stefan Diaz (Morgan Stanley) asked about the rationale for maintaining guidance amid evolving U.S.-China trade tensions. Semach responded that the outlook already factors in modest volume softness and benefits from improved foreign exchange, with most of the company’s production shielded from direct tariff impact.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the pace of Protective’s volume recovery as customer churn effects abate, (2) signs of shifting consumer demand in the Food segment, especially trade-downs within protein categories, and (3) the effectiveness of ongoing cost takeout and productivity efforts in sustaining margins amid uncertain demand. Evolution of global trade policies and tariff impacts will also be important markers of performance.
Sealed Air currently trades at $31.37, up from $27.52 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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