Universal Restores Profit After First-Quarter Loss

The Tip Desk · November 11, 2026 · 3 min read

Second-quarter sales and other operating revenue were $621.8 million, down 18% from a year earlier, as tobacco volumes lagged a delayed market cycle.

Universal Corporation (UVV), a global business-to-business agriproducts company, reported sales and other operating revenue of $621.8 million for the three months ended September 30, 2026, down 18% from $754.2 million a year earlier, as tobacco volumes lagged a delayed market cycle.

The Richmond, Virginia, company said the decline reflected lower tobacco sales volumes. Sequentially, revenue rose from $523.8 million in the quarter ended June 30, 2026, when sales had fallen 12% from a year earlier.

Operating income recovered to $42.6 million from $2.3 million in the prior quarter, after that first-quarter print had fallen 93% from a year earlier. The company attributed the second-quarter operating result to lower tobacco volumes and continued challenging market conditions and high fixed costs in Ingredients Operations.

Net income attributable to Universal Corporation was $12.6 million, or $0.50 a share, compared with a $5.0 million loss, or $0.20 a share, in the quarter ended June 30, 2026. A year earlier, net income was $34.2 million, or $1.36 a share.

Gross profit margin expanded sequentially to 17.3% from 15.9% in the June quarter.

Tobacco Operations, the larger of the two reportable segments, generated sales and other operating revenues of $534.3 million, up from $437.1 million in the June quarter. Tobacco sales volumes declined about 23% from a year earlier. Tobacco sales prices rose about 3% on product mix. Segment operating income was $43.9 million, up from $3.5 million in the June quarter.

The company said tobacco results reflected lower shipments out of Africa and Brazil due to later customer commitments and delivery of shipping instructions, partially offset by some earlier shipments from Asia and a $4 million insurance recovery related to the previously disclosed Mozambique matter.

Ingredients Operations sales and other operating revenues were $87.5 million, essentially unchanged from $86.7 million in the June quarter. The segment posted an operating loss of $2.1 million. The company said revenue was down on tight apple supplies and high raw material costs, and that the operating loss reflected higher raw material costs partially offset by lower inventory write-downs.

Universal recorded $2.7 million of restructuring income on the sale of a previously closed manufacturing facility. The consolidated effective tax rate was 35%, including the expiration of the Mozambique tax holiday in fiscal year 2026.

Uncommitted tobacco inventory levels were 19% as of September 30, 2026, which the company said was within its target range. Chairman, President and Chief Executive Officer Preston D. Wigner said first-half results reflected slower timing of tobacco shipments due to a delayed oversupply cycle, that customer commitments were in line with full-year sales plans, and that the company forecasts shipments to be heavily weighted to the second half of fiscal year 2027, consistent with historical patterns. He said the company also expects uncommitted inventories to reduce further during that period and is seeing emerging customer interest in additional volumes, driven in part by El Niño weather concerns.

Net debt (non-GAAP) was $1.15 billion at September 30, 2026, up $82.3 million from $1.07 billion a year earlier. Net debt to net capitalization was 45%. Available liquidity was approximately $945 million, consisting of cash and committed and uncommitted credit lines.

Wigner said Universal Ingredients is transforming its platform into a more integrated and aligned organization, a process the company expects to continue through the next fiscal year, to sharpen commercial focus and support efforts to improve facility utilization and operating efficiency.