Silgan (SLGN -1.83%), a leading manufacturer of rigid packaging for consumer goods, released its second quarter 2025 results on July 30, 2025. Silgan reported revenue growth of 11% to $1.54 billion for the quarter, narrowly surpassing analyst expectations by $6.21 million. Adjusted earnings per share (EPS) increased 15% from the prior year period, reaching $1.01, though this fell short of consensus estimates by $0.02 on a non-GAAP basis. Notably, management revised its full-year adjusted EPS guidance downward, citing soft volume in select markets and the bankruptcy of a North American customer. Overall, the quarter showed record segment earnings and strong revenue gains, but also highlighted new headwinds.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.01 | $1.03 | $0.88 | 14.8% |
| Revenue (GAAP) | $1.54 billion | $1.53 billion | $1.38 billion | 11.4% |
| Adjusted EBIT | $193.0 million | $165.3 million | 16.8% | |
| Dispensing and Specialty Closures Revenue | $702.2 million | $565.4 million | 24.2% | |
| Metal Containers Revenue | $676.1 million | $650.8 million | 3.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in the first quarter 2025 earnings report.
Business overview and strategic focus
Silgan designs and produces rigid packaging products for food, beverage, personal care, household, and healthcare markets. Its portfolio includes dispensing and specialty closures, metal containers, and custom containers for a wide range of consumer goods. The company is a leader in dispensing systems, such as pumps and sprayers, as well as the largest manufacturer of metal food cans in North America.
Recently, Silgan has focused on building its dispensing and specialty closures business through acquisitions and organic growth. The 2024 acquisition of Weener Packaging expanded its product range and geographic presence. Key success factors for Silgan include continuous cost management, technological innovation, strong multi-year customer contracts, and disciplined integration of strategic acquisitions that enhance the value and profitability of its core businesses.
Quarter highlights: Segment results and key developments
Dispensing and specialty closures, which include items like pumps and sprayers used in personal care and household products, led segment performance with net sales of $702.2 million, up 24.2% year over year. This was driven by both the addition of Weener Packaging and higher volumes in organic dispensing products. Management pointed out that the integration of Weener is delivering targeted benefits and that the team is “pleased with the incremental opportunities our teams are pursuing to enhance our ability to compete and win in the high growth, high value dispensing products market.” Segment profitability also improved, with adjusted earnings before interest and taxes (EBIT) at a record $107.9 million. However, within the segment, specialty closures for food and beverage applications declined 3% due to weak North American beverage demand, attributed to unusually cool and wet weather and softer promotional activity.
The metal containers business, focused on food packaging such as cans for pet food and soup, grew revenue by 4% to $676.1 million. Volume mix remained stable, with notable growth in pet food containers offset by lower soup volume. Pet food now accounts for roughly half of metal containers unit volume and continues to post mid-single-digit growth. Adjusted EBIT for the Metal Containers segment rose to $70.8 million, a 21% increase compared to the second quarter of 2024, reflecting better price/mix dynamics and a recovery in production following supply chain disruptions in the prior year. Management noted that both pet food and multi-year supply agreements provide resilience, but also highlighted expected second-half headwinds in 2025 from the bankruptcy of a large North American customer within this segment.
Custom containers, which includes blow-molded plastic packaging for food, health, and personal care, saw sales slip 3% to $160.9 million. The decline resulted from a deliberate exit from low-margin business as part of ongoing cost reduction efforts. Despite this, segment adjusted EBIT increased to $24.9 million, benefiting from an improved product mix and continued footprint rationalization. Excluding the discontinued lines, custom container volumes grew 2%. The improved profitability in the segment underscored management’s strategy of focusing on more valuable, higher-margin products and streamlining operations.
Cost management and efficiency improvements were visible across segments. Rationalization charges increased to $9.9 million compared to $6.9 million in the second quarter of 2024, reflecting ongoing steps to trim low-performing operations. These efforts are expected to generate $50 million in savings over two years, as announced in late 2023. The company also continued to underline the importance of long-term customer contracts, which are projected to cover approximately 90% of metal container sales and a majority of other product groups. This strategy offers stability in revenues and cash flows, cushioning against short-term market volatility.
The quarterly dividend was $0.20 per share, compared to $0.19 per share in the second quarter of 2024.
Looking forward: Guidance and investor watch points
For the remainder of fiscal 2025 (ending December 31, 2025), management trimmed its full-year adjusted EPS outlook to a range of $3.85 to $4.05, down from its previous guidance of $4.00 to $4.20. The change was mainly linked to weaker volume expectations in North American beverage closures and the impact of a metal container customer’s bankruptcy. Free cash flow guidance was also lowered, now expected at around $430 million versus an earlier estimate of $450 million, though this still implies a year-over-year increase.
Looking ahead to the third quarter of fiscal 2025, management guided for adjusted EPS of $1.18 to $1.28, compared to $1.21 in the third quarter of 2024. The company expects continued adjusted EBIT gains in Dispensing and Specialty Closures and Custom Containers, but anticipates lower adjusted EBIT in Metal Containers due to the issues described above. For investors, future quarters warrant close watch on the integration of recent acquisitions, recovery or further softness in beverage and food container volumes, and the effect of cost controls on margins and working capital.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
