Overview

• Global agriproducts supplier's Q4 revenue rose 2% yr/yr on higher tobacco sales volumes

• Adjusted EPS for Q4 fell to a loss; results impacted by goodwill impairment and inventory write-downs

• Gross margin declined in Q4, while operating income was pressured by charges and market headwinds

Outlook

• Universal expects uncommitted tobacco inventories to return to targeted range during fiscal 2027

• Company has initiated enhancements at Shank’s operation to drive efficiency and financial performance

• Universal sees persistent market headwinds impacting demand at Shank’s for both core and new products

Result Drivers

• GOODWILL IMPAIRMENT - Q4 results were impacted by a $41.1 mln non-cash goodwill impairment charge related to the Shank’s operation

• INVENTORY WRITE-DOWNS - Increased inventory write-downs, mainly for non-wrapper, dark air-cured tobacco, weighed on operating income

• INGREDIENTS DEMAND SOFTNESS - Ingredients segment faced demand challenges due to softness in the consumer-packaged-goods sector and high fixed costs at Shank’s

Company press release: ID:nBwXYhLCa

Key Details

Analyst Coverage

• Wall Street's median 12-month price target for Universal Corp is $78.00, about 41.2% above its May 27 closing price of $55.23

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

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