Universal Corporation Reports First Quarter Fiscal Year 2027 Results

RICHMOND, Va.--(BUSINESS WIRE)--Universal Corporation (NYSE:UVV) (“Universal” or the “Company”), a global business-to-business agriproducts company, today announced financial results for the quarter ended June 30, 2026.

Preston D. Wigner, Chairman, President, and Chief Executive Officer of Universal, stated, “We are starting fiscal year 2027 with confidence in the long-term strategic direction of our company. We are focused on creating sustainable value through disciplined execution across our businesses. In tobacco, we believe that our long-standing market expertise and measured approach position us well to navigate current oversupply conditions, make prudent buying decisions, and be a trusted, full-service partner to our customers. In ingredients, we are leveraging our platform growth investments and focusing on improving commercial execution, facility utilization, and financial and operational efficiencies. We expect certain of our improvement efforts to continue through our next fiscal year.”

Mr. Wigner continued, “Our first fiscal quarter results reflected the expected timing and market dynamics in our tobacco business, in comparison to our exceptional first quarter results in the prior fiscal year. Purchasing activity was slower as we and our customers evaluated green tobacco price trends amid oversupply conditions in flue-cured and burley markets and monitored potential weather impacts on next season’s crops. We are pleased with our current customer indications and commitments, and we expect customer demand to remain consistent with our fiscal year sales plan. In our ingredients business, revenue was down slightly from the prior year’s quarter, and results continued to be negatively affected by persistent consumer market headwinds, high fixed costs at our expanded Lancaster facility, and longer-than-anticipated product development cycles. We continued to implement our initiatives to strengthen the ingredients platform for long-term success, which include enhancements to leadership, systems, operational capabilities, and commercial execution. During the fiscal quarter, our liquidity position remained strong, and our debt levels were down due to reduced working capital usage, driven by tobacco crop purchase timing and lower green tobacco prices.”

First Quarter Fiscal 2027 Highlights

Consolidated Results

• Revenue down $70.0 million to $523.8 million primarily on lower tobacco sales volumes and prices.
• Operating income down $31.5 million to $2.3 million on a less favorable product mix and lower carryover crop sales in the Tobacco Operations segment and continued market headwinds and high fixed costs in the Ingredients Operations segment.

Tobacco Operations Segment

• The first fiscal quarter is historically a slow quarter for our tobacco business.
• Revenue down $67.6 million, or 13%, on lower tobacco sales volumes and prices.
• Segment operating income down $32.2 million largely on product mix and lower sales of carryover crop tobacco as well as unfavorable foreign currency comparisons.
• Tobacco sales volumes down 9% on lower consolidated sales of carryover crop tobacco.
• Tobacco sales prices down 6% on product mix and lower green tobacco prices.
• Tobacco Operations segment results reflected:
  • Seasonal patterns with lower tobacco sales and high working capital outlays for tobacco purchases;
  • Lower sales of carryover crop tobacco;
  • A less favorable product mix in Asia;
  • Oversupply conditions, particularly for flue-cured and burley tobacco; and
  • Unfavorable foreign currency comparisons.
• Uncommitted tobacco inventory levels at 24% as of June 30, 2026, were below March 31, 2026 levels, and remained slightly above our target range due to delayed customer purchase commitments.
• Tobacco shipments are expected to be heavily weighted to the second half of fiscal year 2027 and to follow historical shipping patterns.

Ingredients Operations Segment

• Revenue down $2.4 million, as sales of certain products were negatively impacted by market headwinds.
• Operating income down $2.4 million on product mix and high fixed costs from our expanded production facility, as well as inventory write-downs.
• Market headwinds included persistent weakness in the consumer-packaged-goods industry, supply constraints, particularly tight apple markets in the Pacific Northwest, inflationary pressures, and tariff volatility.
• Ongoing focus on strengthening commercial execution, improving facility utilization, and enhancing financial and operational efficiencies to offset high fixed operating costs and improve performance at our Lancaster facility.

Select Balance Sheet Items, Liquidity, and Debt

• Lower working capital usage on timing of tobacco crop purchases.
• Total debt down $55.5 million at June 30, 2026, compared to June 30, 2025.
• Net debt (non-GAAP) down $51.6 million at June 30, 2026, compared to June 30, 2025.
• Interest expense down $1.3 million in the quarter ended June 30, 2026, compared to the quarter ended June 30, 2025.
• Approximately $1.1 billion of available liquidity, consisting of cash and committed and uncommitted credit lines, as of June 30, 2026.

Additional Items

• Restructuring and impairment costs of $1.1 million in the quarter ended June 30, 2025.
• Income tax benefit of approximately $4.5 million, or 35% of the pre-tax loss, in the quarter ended June 30, 2026, compared to an income tax expense of $5.3 million and consolidated effective tax rate of 27% in the quarter ended June 30, 2025.

Sustainability Update

Universal continues to strengthen the foundation of its business through investments in environmental, health, and safety capabilities that support long-term sustainability and operational resilience. Recent initiatives include the implementation of an enhanced global safety management software platform and a comprehensive Global EHS Management System. The new systems improve visibility across operations, support greater consistency and accountability, and strengthen the Company's approach to risk management across its global footprint. By reinforcing a culture of safety, transparency, and continuous improvement, these investments help position Universal for long-term success.

Other Items

Reconciliation of Certain Non-GAAP Financial Measures

Adjusted operating income (loss), adjusted net income (loss) attributable to Universal Corporation, adjusted diluted earnings (loss) per share, and the total for segment operating income (loss) are non-GAAP financial measures. These measures are not financial measures calculated in accordance with generally accepted accounting principles ("GAAP") and should not be considered as substitutes for operating income (loss), net income (loss) attributable to Universal Corporation, diluted earnings (loss) per share, cash from operating activities or any other operating or financial performance measure calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of adjusted operating income (loss) to consolidated operating (income), adjusted net income (loss) attributable to Universal Corporation to consolidated net income (loss) attributable to Universal Corporation and adjusted diluted earnings (loss) per share to diluted earnings (loss) per share are provided below. In addition, a reconciliation of the total for segment operating income (loss) to consolidated operating income (loss) is provided in Note 3. "Segment Information" to the consolidated financial statements. Management evaluates the consolidated Company and segment performance excluding certain significant charges or credits. Management believes these non-GAAP financial measures, which exclude items that it believes are not indicative of its core operating results, can provide investors with important information that is useful in understanding its business results and trends.

Net debt, net capitalization, and net debt to net capitalization ratio are also non-GAAP financial measures. These measures are not financial measures calculated in accordance with GAAP and should not be considered substitutes for total debt, total capitalization, total debt to total capitalization ratio, or any other operating or financial performance measures calculated in accordance with GAAP, and may not be comparable to similarly-titled measures reported by other companies. Reconciliations of net debt to total debt and net capitalization to total capitalization are provided below. Management believes these non-GAAP measures are meaningful indicators of liquidity and financial position.

The following tables set forth certain non-recurring items included in reported results to reconcile adjusted operating income to consolidated operating income and adjusted net income (loss) attributable to Universal Corporation to net income (loss) attributable to Universal Corporation:

The following table reconciles total debt to net debt and net capitalization:

Investor Conference Call

At 10:00 a.m. (Eastern Time) on August 6, 2026, the Company will host a conference call to discuss these results. Those wishing to listen to the call may do so by visiting www.universalcorp.com at that time. A replay of the webcast will be available at that site through November 6, 2026.

About Universal Corporation

Universal Corporation (NYSE:UVV) is a global agricultural company with over 100 years of experience supplying products and innovative solutions to meet our customers’ evolving needs and precise specifications. Through our diverse network of farmers and partners across more than 30 countries on five continents, we are a trusted provider of high-quality, traceable products. We leverage our extensive supply chain expertise, global reach, integrated processing capabilities, and commitment to sustainability to provide a range of products and services designed to drive efficiency and deliver value to our customers. For more information, visit www.universalcorp.com.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Among other things, these statements include statements made in Mr. Wigner’s quotations, statements regarding expectations with respect to our fiscal year 2027 performance, our strategic plans, ingredients business, tobacco business, including expectations with respect to size, shipments and sales and purchases of tobacco crops. These forward-looking statements are generally identified by the use of words such as we “expect,” “believe,” “anticipate,” “could,” “should,” “may,” “plan,” “will,” “predict,” “estimate,” and similar expressions or words of similar import. These forward-looking statements are based upon management’s current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results, performance, or achievements to be materially different from any anticipated results, prospects, performance, or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: product purchased not meeting quality and quantity requirements; reliance on a few large customers; anticipated levels of demand for and supply of our products and services; tobacco growing conditions and customer requirements; major shifts in customer requirements for leaf tobacco; higher inflation rates, tariffs and other pressures on costs; weather and other conditions; exposure to certain legal, regulatory and financial risks related to climate change; industry-specific risks related to our plant-based ingredients businesses; disruption of our supply chain for our plant-based ingredients; success in pursuing strategic investments or acquisitions and integration of new businesses and the impact of these new businesses on future results; our ability to maintain effective information technology systems and safeguard confidential information; our inability to attract, develop, retain, motivate, and maintain good relationships with our workforce; our dependence on a seasonal workforce; epidemics, pandemics or similar widespread public health concerns; government efforts to regulate the production and consumption of tobacco products; government actions on the sourcing of leaf tobacco; economic and political conditions in the countries in which we and our customers operate, including the ongoing impacts from international conflicts; sustainability considerations from governments and other stakeholders; changes in tax laws in the countries where we do business; failure of our customers or suppliers to repay extensions of credit; changes in exchange rates; changes in interest rates; and low investment performance by our defined benefit pension plan assets and changes in pension plan valuation assumptions. Please also refer to the risks and uncertainties as discussed in Part I, Item 1A. “Risk Factors” of Universal’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026, and related disclosures in other filings that Universal files with the Securities and Exchange Commission (the "SEC"), which are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. Universal cautions investors not to place undue reliance on any forward-looking statements as these statements speak only as of the date when made, and it undertakes no obligation to update any forward-looking statements made, except as required by law.

Universal Corporation Investor Relations:
Phone: (804) 359-9311
Fax: (804) 254-3584
Email: investor@universalleaf.com