By Timothy S. Donahue
Top Takeaways:
- Guidance intact: Company reaffirmed FY26 sales of $2.4–$2.6B and adjusted EBITDA of $215–$235M.
- EBITDA steady: Q3 adjusted EBITDA of $80.0M matched last year’s record quarter despite lower revenue.
- Inventory up on larger crops: Tobacco inventory rose to $959.8M, with uncommitted levels remaining at 3.6%.
Pyxus International reported third-quarter net income of $16.9 million for the period ended Dec. 31, 2025. The company reaffirmed its full-year fiscal 2026 guidance and signaled confidence heading into its peak shipping quarter.
“We are pleased to deliver strong third-quarter results, with $16.9 million in net income and adjusted EBITDA equal to last year’s record third quarter performance,” the company stated in a release. “The increased volumes we secured earlier in the fiscal year are shipping according to plan, supporting our quarterly performance and reinforcing our consistent operational execution.”
Third-quarter sales and other operating revenues declined to $655.8 million from $778.3 million a year earlier, driven primarily by shipment timing in Africa and Europe and lower average pricing in South America, reflecting reduced crop purchase costs. Despite the revenue decline, adjusted EBITDA came in at $80.0 million, essentially flat with $80.5 million in the prior-year quarter.
Operating income fell to $51.3 million from $66.1 million, while net income attributable to Pyxus decreased modestly from $18.9 million to $16.9 million. The company cited lower operating income, partially offset by reduced income tax expense and higher income from unconsolidated affiliates, particularly in South America.
For the first nine months of fiscal 2026, sales declined 12.4% year-over-year, reflecting shipment timing and the impact of accelerated carry-over sales in fiscal 2025. However, gross margin expanded to 14.6% from 13.9%, supported by higher third-party processing volumes and larger crops in South America. Pyxus is the parent to global leaf supplier Alliance One.
“Our ability to capture growth opportunities and efficiencies in a large crop environment, including the increase of our third-party processing, demonstrates the advantages of our global platform,” the company stated. It also highlighted progress on factory automation initiatives aimed at improving long-term efficiency and reducing the overall cost structure.
Inventory levels reflect the broader shift in the crop cycle. Tobacco inventory rose to $959.8 million, up from $755.2 million a year earlier, driven by larger crops in Africa and South America. Net debt increased $199.4 million year-over-year, consistent with a $206.7 million rise in inventory.
Uncommitted processed tobacco inventory remained stable at 3.6% of total processed inventory, signaling continued disciplined contracting despite the company’s description of a move toward a more balanced — and potentially oversupplied — global tobacco market heading into fiscal 2027.
As Pyxus enters its fourth quarter, traditionally its strongest shipping period, the company stated that it remains focused on “efficiently converting inventory into revenue and maximizing cash generation,” and reiterated that fiscal 2026 is on pace to be one of its strongest years ever.
