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Second-Quarter Sales: $570.2 million, up $3.9 million versus last year.

Gross Margin: Improved to 15.4%, up from 13.3% in Q2 fiscal 2025.

Year-to-Date Sales: $1.1 billion, down $122.2 million versus last year.

Year-to-Date Gross Margin: 14.2%, up from 13.3% last year.

Second-Quarter Operating Income: $46.7 million, up 41.5% or $13.7 million versus prior year.

Adjusted EBITDA: Increased 23.6% or $10.5 million to $54.8 million versus last year.

Inventory: Up $160.6 million versus prior year to $1.14 billion.

Seasonal Lines: Up $163.3 million versus last year to $908 million.

Operating Cycle: Improved by 12 days, decreasing to 167 days compared to last year.

Leverage: 6.54 turns.

Interest Coverage: 1.48 turns.

Full-Year Sales Guidance: Raised to $2.4 billion to $2.6 billion.

Adjusted EBITDA Guidance: Raised to $215 million to $235 million.

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Release Date: November 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Pyxus International Inc (PYYX) reported solid second-quarter results, continuing a track record of consistent execution and financial achievement.

The company increased its sales guidance to $2.4 billion to $2.6 billion and raised the lower end of its adjusted EBITDA guidance by $10 million.

Gross margin improved to 15.4% in the second quarter, up from 13.3% in the same quarter last year, driven by improved returns and increased third-party processing volumes.

The company successfully executed in a large crop environment, capturing mix-related opportunities that supported higher margins and returns.

Pyxus International Inc (PYYX) expects strong sales and cash generation in the second half, with plans to optimize operating cycle times and accelerate repayment of seasonal credit lines.

Year-to-date sales were down $122.2 million compared to last year due to lower carry-over sales from the prior year.

Operating income for the year-to-date was down $5.8 million, and adjusted EBITDA was down $15.1 million, primarily due to lower carry-over sales in the first quarter.

The company's working capital investment peaked in the second quarter, with inventory up $160.6 million versus the prior year.

Leverage remains high at 6.54 turns, and interest coverage is at 1.48 turns, reflecting the seasonal profile of the working capital investment.

There is a potential market shift towards oversupply next season, which could impact pricing and demand dynamics.

Q: Pieter, you mentioned the potential shift to an oversupply position in the market. How should we think about the business and the competitive environment if that occurs? A: J. Pieter Sikkel, President, CEO: We see an oversupply situation as an opportunity. Historically, during oversupply years, we've performed well due to improved cost structures. The demand side remains stable, and the base cost of raw materials aligns with the quality of tobacco purchased. This situation allows for increased third-party processing volumes and better fixed cost absorption, leading to increased volumes, improved margins, and lower costs.

Q: Dustin, you referenced higher shipment volumes in the second half. Were you referring to higher volumes compared to the first half or year-over-year? A: Dustin Styons, CFO: We expect higher shipment volumes in the second half compared to both the first half and year-over-year, driven by larger crops this year. This aligns with our increased guidance and reflects our confidence in monetizing the remaining inventory.

Q: With the increased guidance, what is your confidence level in monetizing the remaining inventory? A: Dustin Styons, CFO: Our confidence level is very high. The increased guidance reflects our ability to effectively manage and monetize the inventory, supported by strong demand and operational execution.

Q: How does the current market environment affect your strategic decisions moving forward? A: J. Pieter Sikkel, President, CEO: We remain focused on capturing growth opportunities while maintaining an efficient operating cycle. We aim to strengthen liquidity and improve our credit profile, leveraging our global farmer base and procurement and processing footprint to drive cost efficiency and deliver value to our customers.

Q: Can you elaborate on the impact of third-party processing initiatives on your financial performance? A: J. Pieter Sikkel, President, CEO: Third-party processing initiatives have captured performance opportunities, contributing to improved margins and returns. This strategy enhances our ability to absorb fixed costs and supports our overall financial performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.