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Introduction & Market Context
Pyxus International Inc (OTC:PYYX) reported a significant decline in first-quarter fiscal 2026 revenue and swung to a net loss, according to the company’s quarterly presentation delivered on August 6, 2025. Despite the weaker results, management maintained its full-year guidance, framing the quarter as part of a return to a "normalized cycle" with business expected to be weighted toward the second half of the fiscal year.
The agricultural company, which trades at around $5 per share, reported a 19.9% year-over-year decline in revenue to $508.8 million and posted a net loss of $15.8 million compared to a profit of $4.6 million in the same period last year.
Quarterly Performance Highlights
Pyxus attributed the revenue decline to an acceleration of significant shipments into the fourth quarter of fiscal 2025, creating a challenging comparison. The company’s gross profit fell 21.8% to $65.6 million, while operating income dropped 48.1% to $21 million.
"We’re off to a solid start in fiscal year 2026, returning to a more normalized cycle with first-half focus on crop purchasing and customer shipments weighted more heavily to the second half," stated CEO Pieter Sikkel during the presentation.
The company highlighted that its average gross profit per kilo remained relatively flat at $0.86 compared to $0.84 in the prior-year period, despite the overall revenue decline.
As shown in the following chart of sales price and gross profit trends:
The cash conversion cycle improved to 160 days from 172 days in the prior-year period, reflecting better working capital management despite challenging market conditions.
Financial Health Analysis
The company’s balance sheet showed mixed signals. Cash and cash equivalents increased 17.6% year-over-year to $96.4 million, while inventories grew 10.6% to $1.12 billion, reflecting the company’s focus on crop purchasing during the quarter.
However, notes payable increased significantly by 29.7% to $880.9 million, and the company’s leverage metrics deteriorated. The Net Debt to Adjusted EBITDA ratio worsened to 6.78x from 5.60x in the prior year, while interest coverage declined to 1.41x from 1.53x.
The following slide illustrates these concerning debt metrics:
Adjusted EBITDA for the quarter came in at $29.5 million, down substantially from $55 million in the first quarter of fiscal 2025. The company did note that net interest expense improved by $3.5 million compared to the prior-year period.
The detailed breakdown of Adjusted EBITDA components reveals:
Adjusted Free Cash Flow deteriorated significantly to negative $458.6 million from negative $225.5 million in the prior-year period, primarily due to increased cash used in operating activities.
Strategic Initiatives
Pyxus emphasized its environmental achievements during the presentation, highlighting recognition as a CDP Supplier Engagement Leader in 2024. The company noted that these environmental efforts are "only achievable with the participation of a strong network of farmers around the world."
The company also stressed its successful crop replenishment strategy, with purchasing complete in South America and the majority complete in Africa. Management pointed to its ability to manage peak working capital as evidence of financial strength, noting an increased seasonal borrowing capacity of $200 million with no outstanding balance compared to $44 million last year.
Forward-Looking Statements
Despite the weaker first-quarter performance, Pyxus reiterated its full-year fiscal 2026 guidance, projecting revenues between $2.3 billion and $2.5 billion and adjusted EBITDA between $205 million and $235 million.
This guidance aligns with the company’s fiscal 2025 performance, when it reported sales of $2.5 billion and adjusted EBITDA of $208.4 million. Management expressed "continued confidence in guidance following in-line first quarter and inventory replenishment."
The maintained guidance suggests management expects significant improvement in the coming quarters, particularly in the second half of the fiscal year. This outlook contrasts with the first quarter’s substantial declines in revenue and profitability, raising questions about the company’s ability to achieve its full-year targets given the deteriorating debt metrics and cash flow.
For investors, the key question remains whether Pyxus can successfully navigate its "normalized cycle" and deliver the projected second-half performance needed to meet its annual guidance, particularly in light of the increased leverage and negative free cash flow demonstrated in the first quarter.
Full presentation:
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