IFF shares fall 5% despite Q3 profit beat and raised 2026 outlook

International Flavors & Fragrances (IFF) said on Nov. 3 that third-quarter adjusted earnings per share excluding amortization came in at 83 cents, topping the 80 cents consensus estimate.

Shares fell 5.0% in regular trading as of 3:59 p.m. ET on Nov. 4, from a regular-session close of $92.18.

Sales of $1.94 billion were in line with the $1.93 billion consensus estimate. The company said in a press release that it raised the low end of its full-year 2026 ranges.

International Flavors & Fragrances sells flavors, fragrances, and health and biosciences products. Its results are presented on a continuing operations basis, excluding its Food Ingredients business and its Soy Crush, Concentrates, and Lecithin businesses, which are treated as discontinued operations.

“IFF delivered a solid third quarter, with improved sales and profitability across all divisions,” said Erik Fyrwald, CEO of IFF.

Here's how the company did:

• Net sales: $1.94 billion vs. $1.87 billion a year earlier
• Adjusted EPS excluding amortization: 83 cents vs. 76 cents a year earlier, against the 80 cents consensus estimate
• Reported EPS: a loss of 50 cents per diluted share vs. income of 39 cents a year earlier
• Adjusted operating EBITDA: $403 million vs. $384 million a year earlier

Loss from continuing operations before taxes was $134 million, compared with income of $130 million a year earlier. The result included a $236 million loss on assets classified as held for sale and a $23 million goodwill impairment, both of which are excluded from adjusted results.

Segment results

Taste sales were $687 million, up 4% from a year earlier, with adjusted operating EBITDA of $128 million.

Health & Biosciences sales were $566 million, up 1%, with adjusted operating EBITDA of $136 million.

Scent sales rose 6% to $689 million, and adjusted operating EBITDA was $139 million.

2026 guidance

The company now expects 2026 sales of $7.5 billion to $7.6 billion, up from the $7.4 billion to $7.6 billion range it gave on Aug. 4.

Adjusted operating EBITDA is now expected at $1.55 billion to $1.60 billion, versus $1.53 billion to $1.60 billion before.

Comparable currency neutral sales growth is now expected at 3% to 4%, from 2% to 4%, and comparable currency neutral adjusted operating EBITDA growth at 5% to 8%, from 4% to 8%.

The company expects fourth-quarter profitability to be softer, particularly in Health & Biosciences, because of higher costs and reinvestment to strengthen the business.

Cash and capital returns

Cash flow from operations for the first nine months was $820 million, up $288 million from a year earlier. Free cash flow was $371 million, up $245 million.

The company recently completed a $500 million accelerated share repurchase program, the company said in a press release.

The divestiture of Food Ingredients is on track to close by the end of the second quarter of 2027, the company said. Net debt to credit adjusted EBITDA was 2.75 times at the end of the third quarter, including continuing and discontinued operations.

The company will hold a webcast on Nov. 4 at 9 a.m. ET.