By Timothy S. Donahue

Top Takeaways:

• Strong finish: Fourth-quarter sales jumped 35% on larger crops and shipment timing
• Record year: Adjusted EBITDA reached an all-time record high of $226.7 million
• Market shift: Global tobacco market has moved into an oversupply position, led by Africa and South America

Pyxus International closed fiscal 2026 with record adjusted EBITDA and sharply higher fourth-quarter sales, despite the global leaf tobacco market shifting from supply constraints to oversupply.

The leaf merchant reported fourth-quarter sales and operating revenues of $678.2 million, up 35.2% from $501.7 million a year earlier, driven by larger crops and higher shipment volumes from Africa and North America.

For the full fiscal year ended March 31, sales declined 2.8% to $2.41 billion, reflecting lower average leaf prices and reduced sales of value-added tobacco products. However, profitability improved across several key metrics, according to the company’s fourth-quarter performance report.

Operating income increased 6.1% to $162.7 million, net income reached $14.6 million, and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed to a record $226.7 million. The company’s leverage ratio improved to 3.52x, the lowest level in years.

“Fiscal 2026 marks another year of outstanding financial and operational results for Pyxus, concluding from a position of strength with exemplary fourth quarter results,” said Pieter Sikkel, president and chief executive officer of Pyxus. “Our consistent performance reflects the resilience and adaptability of our global teams, who worked together to navigate the shift to an oversupply market, meeting sustained customer demand.

“Their strategic execution enabled the achievement of record adjusted EBITDA, strong margins and improved credit metrics.”

The results provide clear evidence that the global leaf tobacco market has entered a new phase following several years of supply concerns. “As expected, the global tobacco market has turned to an oversupply position, which was driven by higher production in Africa and South America,” the company said.

Pyxus reported tobacco inventory of $786.7 million at fiscal year-end, up from $732.2 million a year earlier, largely due to crop purchases in Africa and shipment timing. The company said the larger inventory position is expected to generate additional carryover sales in fiscal 2027.

The company also noted that uncommitted inventory totaled $45.2 million, representing about 9% of processed inventory, which it described as “consistent with a global oversupply environment.” Despite the shift in market dynamics, Pyxus said that customer demand remains stable.

“As we enter fiscal year 2027, we are well positioned to manage the dynamic market, leveraging a disciplined operating model and deep customer insights to make demand-led purchasing decisions,” Sikkel said. “We anticipate steady customer demand and sufficient supply, driving favorable outcomes including decreased crop costs and improved working capital, providing an opportunity to further strengthen our business fundamentals.”

The company generated particularly strong cash flow in the fourth quarter. Cash and cash equivalents increased by $56.1 million year-over-year, while cash flow from operations totaled $310.1 million and adjusted free cash flow totaled $352.1 million.

Looking ahead, Pyxus expects fiscal 2027 sales of $2.3 billion to $2.5 billion and adjusted EBITDA of $210 million to $240 million.