Universal Corporation Reports Third Quarter and Nine-Month Fiscal 2026 Results
Universal Corporation (NYSE: UVV), a global business-to-business agriproducts company, announced its financial results for the third quarter and nine months ended December 31, 2025, highlighting resilient performance in its core tobacco operations, continued progress in its Ingredients segment, and enhanced liquidity following a successful refinancing transaction.
Management Commentary
Preston D. Wigner, Chairman, President, and Chief Executive Officer of Universal, said the Company delivered solid results despite evolving market conditions.
“We are pleased with Universal’s performance during the quarter and first nine months of the fiscal year,” Wigner said. “Our tobacco operations continued to produce strong results, supported by firm customer demand for most tobacco styles and the smooth progression of shipments. While global tobacco markets are gradually moving toward oversupply, our long-standing sourcing capabilities and local expertise across operating regions position us well to navigate these dynamics and optimize results under a range of market conditions.”
Wigner also addressed performance in the Universal Ingredients segment, noting that revenue growth was maintained year to date despite challenging market conditions, including softer customer demand and tariff impacts. “Quarterly results reflected ongoing market headwinds and higher fixed costs associated with our recent investments. We remain focused on converting customer interest into long-term sales and expanding our solutions-based product portfolio.”
Additionally, Wigner highlighted the Company’s strengthened financial position following the refinancing and upsizing of its revolving credit facility in December 2025. “This transaction, completed with strong support from our banking partners, significantly enhances our liquidity and financial flexibility and supports the execution of our strategic priorities.”
Consolidated Financial Performance
For the nine months ended December 31, 2025, Universal reported consolidated revenue of $2.2 billion, a 2% decline from the prior-year period. The decrease was driven primarily by lower tobacco sales volumes, partially offset by higher third-party tobacco processing volumes and a favorable ingredients product mix.
Operating income for the nine-month period totaled $183.4 million, down 3% year over year. The decline reflected lower tobacco sales volumes and higher fixed costs and market headwinds in the Ingredients segment, including softness in the consumer packaged goods sector. These factors were partially offset by favorable foreign currency movements.
Net income attributable to Universal Corporation for the nine-month period was $75.9 million, or $3.02 per diluted share, compared with $85.7 million, or $3.41 per diluted share, in the prior year. On an adjusted non-GAAP basis, net income was $77.7 million, or $3.09 per diluted share.
Third Quarter Fiscal 2026 Results
During the third quarter ended December 31, 2025, consolidated revenue declined 8% year over year to $861.3 million, reflecting lower tobacco sales volumes and pricing, as well as an unfavorable ingredients product mix.
Operating income for the quarter was $82.0 million, a 21% decrease compared with the prior-year quarter. The decline was driven by reduced tobacco sales volumes and higher inventory write-downs related to dark air-cured tobacco, partially offset by favorable foreign currency comparisons.
Net income attributable to Universal Corporation for the quarter totaled $33.2 million, or $1.32 per diluted share, compared with $59.6 million, or $2.37 per diluted share, in the same period last year. Adjusted net income on a non-GAAP basis was $34.0 million, or $1.35 per diluted share.
Tobacco Operations Segment
The Tobacco Operations segment continued to demonstrate resilience amid changing supply and demand dynamics.
For the nine-month period, segment revenue declined $52 million, primarily due to lower sales of dark air-cured tobacco. This decrease was partially offset by higher third-party tobacco processing volumes. Segment operating income decreased $9 million, largely reflecting a 4% decline in tobacco sales volumes.
During the third quarter, Tobacco Operations revenue declined $74 million year over year, driven by lower sales volumes and the timing of shipments. Segment operating income fell $19 million, reflecting reduced sales volumes and higher dark air-cured inventory write-downs, partially offset by favorable currency movements.
Despite these pressures, the segment benefited from continued firm customer demand for most tobacco styles, increased third-party processing activity, and favorable foreign exchange trends. Uncommitted tobacco inventory levels remained within the Company’s target range at approximately 17% as of December 31, 2025.
Ingredients Operations Segment
The Ingredients Operations segment reported mixed results amid ongoing market challenges.
For the nine-month period, segment revenue increased 7% year over year, supported by organic growth and increased sales of select products. However, operating income declined due to product mix, higher fixed costs—including depreciation from the Company’s expanded production facility—and inventory write-downs.
In the third quarter, Ingredients segment revenue declined $2 million, reflecting market headwinds, tariff impacts, and shifts in product mix. The segment reported an operating loss for the quarter, driven by higher fixed costs and continued softness in the consumer packaged goods sector.
Management noted steady customer interest in the segment’s enhanced capabilities and reaffirmed its focus on building scale through a growing pipeline of solution-based products to support long-term sustainable growth.
Liquidity, Capital Structure, and Balance Sheet
Universal reported increased working capital usage during the nine-month period, primarily due to larger tobacco crops and the timing of tobacco purchases. Total debt at December 31, 2025, declined by $77 million compared with the prior year.
Net debt increased $51 million year over year, reflecting higher working capital requirements. In December 2025, the Company refinanced and upsized its revolving credit facility by $250 million, extending the maturity to December 2030. Approximately $595 million remained available under the facility at quarter end.
Sustainability Update
Universal recently published its Fiscal Year 2025 Sustainability Report, outlining continued progress across key environmental and supply chain initiatives. During fiscal 2025, the Company increased renewable electricity consumption nearly sixfold, with 17.7% of global electricity sourced from renewable energy.
The Company also continued to enhance supply chain transparency and farmer engagement through its MobiLeaf™ digital farm data platform and maintained direct relationships with more than 200,000 contracted farmers worldwide, supporting its long-term commitment to net-zero greenhouse gas emissions by 2050.
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