WestRock misses sales estimates as weak consumer spending hurt containerboard demand

WestRock Co

01/02/2024 12:33

Feb 1 (Reuters) - WestRock  WRK.N  reported its
first-quarter sales on Thursday that fell short of market
expectations, as the company grapples with weakening consumer
demand for its containerboards and paperboard products. 
    The demand for corrugated containers and containerboard,
which are crucial for packing items like food, beverages and
medicines, took a hit from consumers pulling back on
non-essential spending.
    This led to retailers destocking packaging boxes and
reducing orders for these products, impacting paper packaging
companies such as WestRock, Packaging Corp of America  PKG.N 
and International Paper  IP.N . 
    WestRock's revenue fell 6.2% to $4.6 billion in the quarter
ended Dec. 31, missing analysts' estimates of $4.8 billion, as
per LSEG data.
    A shift to in-store purchases from pandemic-driven online
shopping has also impacted the sector.  
    Revenue from the company's corrugated packaging segment rose
2.41%, while the global paper unit saw an 18.3% fall in sales,
impacted by prior year mill and interior partition divestitures.
    The paper packager, which was bought by Irish counterpart
Smurfit Kappa  SKG.I  for $11 billion, posted an adjusted profit
of 20 cents per share, missing estimates of 35 cents per share,
according to LSEG data. 
    "Although there were external containerboard shipments,
there was a lower paperboard market demand," CEO David Sewell
said. 
    The company's shares fell 1% in premarket trading.

 (Reporting by Annett Mary Manoj in Bengaluru; Editing by Shweta
Agarwal)
 ((AnnettMary.Manoj@thomsonreuters.com))