Flavor and fragrance producer IFF (NYSE:IFF) missed Wall Street’s revenue expectations in Q2 CY2026, with sales falling 29.3% year on year to $1.95 billion. The company’s full-year revenue guidance of $7.5 billion at the midpoint came in 30.2% below analysts’ estimates. Its non-GAAP profit of $0.82 per share was 26.6% below analysts’ consensus estimates.
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International Flavors & Fragrances (IFF) Q2 CY2026 Highlights:
- Revenue: $1.95 billion vs analyst estimates of $2.61 billion (25% miss)
- Adjusted EPS: $0.82 vs analyst expectations of $1.12 (26.6% miss)
- Adjusted EBITDA: $408 million vs analyst estimates of $529 million (20.9% margin, 22.9% miss)
- The company dropped its revenue guidance for the full year to $7.5 billion at the midpoint from $10.65 billion, a 29.6% decrease
- EBITDA guidance for the full year is $1.57 billion at the midpoint, below analyst estimates of $2.11 billion
- Operating Margin: 8.1%, in line with the same quarter last year
- Free Cash Flow Margin: 14.6%, up from 5.3% in the same quarter last year
- Organic Revenue rose 6% year on year (beat)
- Market Capitalization: $20.57 billion
Company Overview
Responsible for the scents in your favorite perfumes and the flavors in your daily snacks, International Flavors & Fragrances (NYSE:IFF) creates and manufactures ingredients for food, beverages, personal care products, and pharmaceuticals used in countless consumer goods.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $9.98 billion in revenue over the past 12 months, International Flavors & Fragrances is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. To expand meaningfully, International Flavors & Fragrances likely needs to tweak its prices, innovate with new products, or enter new markets.
As you can see below, International Flavors & Fragrances struggled to generate demand over the last three years. Its sales dropped by 5.6% annually, a tough starting point for our analysis.
This quarter, International Flavors & Fragrances missed Wall Street’s estimates and reported a rather uninspiring 29.3% year-on-year revenue decline, generating $1.95 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 5% over the next 12 months. Although this projection indicates its newer products will catalyze better top-line performance, it is still below the sector average.
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Cash Is King
Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.
International Flavors & Fragrances has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 5.2% over the last two years, slightly better than the broader consumer staples sector.
International Flavors & Fragrances’s free cash flow clocked in at $286 million in Q2, equivalent to a 14.6% margin. This result was good as its margin was 9.4 percentage points higher than in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends are more important.
Key Takeaways from International Flavors & Fragrances’s Q2 Results
We were impressed by how significantly International Flavors & Fragrances blew past analysts’ gross margin expectations this quarter. We were also excited its organic revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $80.50 immediately following the results.
International Flavors & Fragrances didn’t show its best hand this quarter, but does that create an opportunity to buy the stock right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).