Shares of Berry Global (BERY 0.88%) fell 11.8% on Wednesday after the plastic packaging solutions company announced weaker-than-expected quarterly results.
A "solid" quarter for Berry Global amid macroheadwinds
For its fiscal first quarter ended Dec. 30, 2023, Berry's net sales declined 7% year over year to $2.85 billion, translating to a 6% drop in adjusted (non-GAAP) earnings to $1.22 per share. Most analysts were looking for higher earnings of $1.29 per share on revenue closer to $2.99 billion.
Nonetheless, Berry CEO Kevin Kwilinski called it a "solid" quarter in light of current challenging macroeconomic headwinds and inflation impacting consumer demand.
"Our global teams have executed exceptionally well," Kwilinski added, "implementing robust cost reductions and optimizing our product mix across our businesses."
What's next for Berry shareholders?
Looking ahead to the rest of the fiscal year 2024, Berry reaffirmed its outlook, calling for adjusted earnings per share of $7.35 to $7.85 -- in line with analysts' estimates for earnings of $7.53 per share this year -- and for free cash flow of $800 million to $900 million.
Still, given Berry's relative underperformance to start the year, some investors might be skeptical as that reaffirmed guidance seems to imply sequential improvement as macroheadwinds wane in the coming quarters. Until we see more tangible signs of that improvement, it's no surprise to see Berry Global shares pulling back in response.
