Net revenues of $9,967,000,000 missed the API Ninjas estimate of $9,983,359,000, while GAAP diluted EPS of $1.02 beat the $0.708 estimate. Adjusted EPS was $0.78, up 5.5% on a constant currency basis, and organic net revenue grew 2.1%.
Full-year 2026 guidance was reaffirmed: organic net revenue growth of at least 2 percent, adjusted EPS growth of flat to 5 percent at constant currency, and free cash flow of approximately $3 billion, with currency adding about 1.5 percent to revenue growth and $0.04 to adjusted EPS.
Margin is the highlight: adjusted gross profit margin rose 380 basis points to 34.2 percent and adjusted operating income margin 190 basis points to 13.9 percent, on lower raw material costs and productivity; adjusted operating income rose 17.0% at constant currency to $1,384 million.
Growth was volume-led but uneven: volume/mix contributed 1.8 pp of the 2.1% organic growth, with AMEA up 7.7% organically on 5.5 pp of volume/mix while Europe fell 2.1% on 3.7 pp lower pricing.
The one thing that matters: the real improvement is in margin, not revenue. Adjusted operating income grew 17.0% at constant currency on 2.1% organic sales as input costs eased, but tax, interest and lower equity income held adjusted EPS growth to 5.5%, and GAAP EPS is inflated by derivative gains.
Key metrics
Metric
Reported
Prior year
Change
Organic Net Revenue growth
+2.1%
—
—
Volume/Mix
+1.8%
—
—
Adjusted EPS growth (constant currency)
+5.5%
—
—
Adjusted Gross Profit margin
34.2 percent
—
380 basis points
Adjusted Operating Income margin
13.9 percent
—
190 basis points
Year-to-date Free Cash Flow
$1.7 billion
—
—
Guidance changes
Item
New guidance
Prior guidance
2026 Organic Net Revenue growth
at least 2 percent
—
2026 Adjusted EPS growth (constant currency)
flat to 5 percent
—
2026 Free Cash Flow
approximately $3 billion
—
2026 currency translation impact on net revenue growth
approximately 1.5 percent
—
2026 currency translation impact on Adjusted EPS
$0.04
—
Quality of earnings
GAAP EPS is flattered by derivative marks. Of the $1.02 diluted EPS, $0.34 came from $543 million of pretax mark-to-market gains on commodity and currency derivatives; adjusted EPS was $0.78.
Below-the-line items absorb the operating gain. Adjusted operating income grew 18.2% but adjusted net earnings only 4.5% to $992 million, with an adjusted effective tax rate of 27.0%; fewer shares, 1,280 million diluted against 1,296 million, helped per-share growth.
Cash conversion improved. Year-to-date operating cash flow rose to $2,606 million from $2,117 million and free cash flow to $1,659 million from $1,236 million, though year-to-date capital expenditures of $947 million excluded $355 million accrued but unpaid.
Gotchas & watch items
The full-year EPS guide needs a strong fourth quarter: year-to-date adjusted EPS of $2.18 is down 4.1% at constant currency against a reaffirmed flat to 5 percent full-year growth range.
Europe is shrinking on price: organic net revenue in the largest region, $3,552 million of revenue, fell 2.1% with pricing down 3.7 pp.
North America has no volume: organic growth of 1.6% came entirely from pricing, with volume/mix flat.
Recurring costs sit outside adjusted profit: ERP System Implementation costs of $66 million and restructuring charges of $55 million were excluded in the quarter, and year-to-date ERP costs reached $174 million.