The first quarter of 2026 has been more challenging than O-I Glass anticipated, the company disclosed on Feb. 25.
In the few weeks since its fourth-quarter and full-year earnings call, the company foresaw additional pressures on earnings “due to recent developments, with results likely below the previously communicated estimate that the first quarter would contribute 12-16% of full-year 2026 adjusted earnings per share.”
That same day, O-I’s CFO John Haudrich unpacked some of those trends at the BofA Securities 2026 Global Agriculture and Materials Conference, in conversation with BofA Securities Analyst George Staphos.
O-I pointed to commercial headwinds in Europe, including from ongoing soft demand and temporary supply chain costs associated with three factory closures in the region.
There’s also some unexpected pricing pressure there in the wine sector. “Usually, those negotiations happen from kind of mid-November to early-to-mid-February. It's extending more. And some of those agreements that were previously set are being reopened against a competitive environment,” Haudrich explained.
Meanwhile, O-I is still undertaking major changes with its footprint rationalization and broader Fit to Win cost savings program.
“Two years ago, we were sold out and we were actually air-freighting glass containers and for spirits customers at different places,” Haudrich told Staphos. “Obviously, now we’re in a different world where it's much softer,” he said, calling out affordability challenges plus policy changes around tariffs and immigration.
O-I has said it needs glass to compete better against aluminum. According to Haudrich, the cost margin is closing. He said there’s approximate parity between the two now in Europe. In the U.S., the 25% to 30% premium for glass has shrunk to about 10%.
O-I also described during an earnings call last month efforts to reorient its portfolio to categories like premium spirits and non-alcoholic beverages.
Using innovation to stimulate demand will be key, Haudrich said. This process involves learning from past challenges.
“Glass kind of missed a couple of important trends,” he said, noting it did not capitalize with hard seltzers. “We need to be able to be in a position to jump on these newer trends that are coming up with innovative different design of products that actually stimulate growth in the market and drive that brand image that our customers are looking for.”
Diversifying beyond and within alcohol is also part of the equation.
“The fact is, there is less alcohol consumption, but people are drinking something, right?” Haudrich said. Even with that reduction, there’s a draw to more premium products — a fine cocktail or glass of wine, “even if maybe they don't have three of them,” he said.
This necessitates the push “upstream into the more premium categories, because that's where the experience is going to be when you do consume alcohol.”
Despite the Q1 headwinds, O-I kept its full-year guidance, which was for adjusted earnings before interest, taxes, depreciation and amortization of up to $1.3 billion, free cash flow of $200 million and $275 million in benefits from the Fit to Win program.
O-I also last week announced the departure of Arnaud Aujouannet as chief sales and marketing officer.
