10-Q · May 5, 2026
IFF reported Q1 2026 performance with net sales of $2.741 billion, down 4% from the previous year but up 3% in constant currency when adjusting for divestitures. EPS improved to $0.66, significantly better than the loss…
Earnings analysis · 10-Q
IFF earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
IFF delivered healthy underlying Q2 continuing-operations momentum: revenue increased 2% reported and 6% on a comparable currency-neutral basis, with gross margin up 80 basis points to 43.7% and all three continuing…
Read full summary
IFF delivered healthy underlying Q2 continuing-operations momentum: revenue increased 2% reported and 6% on a comparable currency-neutral basis, with gross margin up 80 basis points to 43.7% and all three continuing segments growing. However, reported profitability was weak, with GAAP diluted EPS declining to $0.20 from $2.33 and continuing-operations EPS declining to $0.13 from $2.14, reflecting a difficult comparison to a $488 million prior-year debt-extinguishment gain as well as a 48.4% tax rate and $71 million of regulatory costs. Cash generation strengthened materially, but the investment case remains tied to execution of the Food Ingredients divestiture and associated capital-return program.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.2
What stood out
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Core sales growth across all segments
Continuing-operations sales rose $35 million, or 2%, to $1.954 billion; comparable currency-neutral sales increased 6%. All three continuing segments grew, led by Scent at 10%.
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Gross margin expanded 80 basis points
Gross margin expanded 80 basis points year over year to 43.7%, as gross profit increased $29 million to $853 million. Management cited volume, productivity gains, and tariff refunds.
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Operating profitability improved
Operating profit rose 11% to $158 million and operating margin increased 70 basis points to 8.1%. Continuing adjusted operating EBITDA increased to $408 million from $399 million, while its margin held at 20.9% versus 20.8%.
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Operating cash flow rose $311 million
Six-month operating cash flow increased to $679 million from $368 million. The improvement reflected lower working capital, principally inventories and payables, plus a smaller incentive-compensation payout.
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Liquidity and covenant headroom remain solid
Leverage remains within covenant capacity: total debt was $5.735 billion, cash was $569 million, and net debt-to-credit-adjusted EBITDA was 2.51x; there were no borrowings on the $2.0 billion revolver.
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Enhanced $2.5 billion shareholder return plan
The board authorized a $2.5 billion enhanced share repurchase program, including a $500 million accelerated repurchase expected in the second half of 2026. The company repurchased 482,528 shares for $74.17 per share in the quarter.
What to watch
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GAAP EPS declined sharply year over year
GAAP diluted EPS fell to $0.20 from $2.33, while continuing-operations diluted EPS fell to $0.13 from $2.14. The prior-year comparison included a $488 million gain on debt extinguishment, but current earnings also absorbed a $27 million held-for-sale asset loss.
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Tax rate and regulatory costs pressure earnings
The effective tax rate increased to 48.4% from negative 25.6%, driven by non-deductible regulatory costs, prior-year entity realignment effects, divestitures, and earnings mix. Regulatory costs were $71 million, versus $53 million a year earlier.
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Divestiture execution remains material
Food Ingredients and SCL were classified as discontinued operations in Q2, while the planned post-close repurchase includes $2.0 billion dependent on the Food Ingredients divestiture closing. The filing records $27 million of held-for-sale losses related to CitraSource.
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Cross-currency swap exposure increased in focus
No material changes were made to the risk factors disclosed in the 2025 Form 10-K. However, the updated market-risk disclosure reports cross-currency swaps in a $194 million net liability position; a 10% dollar/euro move would change fair value by approximately $252 million.
Management's outlook
The 10-Q does not provide a quantitative sales, EPS, EBITDA, or cash-flow outlook. Management expects 2026 capital spending of approximately 6.0% of total company sales, versus approximately 5.5% in 2025, and expects a $500 million accelerated repurchase in the second half of 2026; the remaining $2.0 billion repurchase is expected following the Food Ingredients divestiture, with completion expected by the end of 2027.
Earlier filings 4
10-K · February 27, 2026
IFF reported full-year sales of $10.890 billion in 2025 while completing a portfolio reshaping: the company restructured Nourish into Taste and Food Ingredients effective January 1, 2025 and completed divestitures of…
10-Q · August 5, 2025
IFF's Q2 2025 results show strong performance, with revenue of $2.764 billion, beating expectations and up slightly from $2.889 billion in Q2 2024. Gross margin improved to 37.3% from 37.0% year-over-year, contributing…
10-Q · May 6, 2025
IFF reported Q1 net sales of $2,843,000,000 (down $56 million vs. Q1 2024) and recorded a large goodwill impairment that drove an operating loss of $903,000,000 and a net loss attributable to shareholders of…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.