01—Abstract
Summary
Summary of the 10-Q filed August 4, 2026. Cited figures are marked; the original filing is the authoritative source.
International Flavors & Fragrances Inc. reported second-quarter 2026 net sales of $1.954 billiona, up from $1.919 billion in the prior-year period, with the filing stating comparable currency neutral sales rose 6%.
Operating profit increased to $158 millionb from $142 million, while net income attributable to IFF shareholders fell to $50 million from $599 million, the prior-year quarter having benefited from a $488 million gain on debt extinguishment. Income from continuing operations before taxes was $64 million versus $438 million, and the effective tax rate rose to 48.4%, driven mainly by increased non-deductible regulatory costs. Six-month net sales declined to $3.860 billion from $3.969 billion on divestitures, and six-month net income attributable to IFF shareholders was $219 million compared with a loss of $419 million a year earlier.
The company has classified its Food Ingredients business, together with the Soy Crush, Concentrates and Lecithin business, as discontinued operations. The Food Ingredients sale to funds advised by CVC Capital Partners is priced at estimated proceeds of $3.832 billionc, with IFF retaining a 10% minority stake and closing expected by the end of the second quarter of 2027. The SCL divestiture closed on March 2, 2026.
Subsequent to quarter-end, IFF agreed on July 20, 2026 to sell its Botanical Extracts, Vitamins & Minerals, and Food Enhancement Products portfolio, which it expects to produce a pre-tax loss of approximately $200 million to $300 milliond. On August 4, 2026, the Board authorized an enhanced share repurchase program totaling $2.5 billion, including a $500 million accelerated repurchase expected in the second half of 2026.
The company also entered into a $1.0 billion delayed draw term loan to refinance its €800 million notes due September 2026. At June 30, 2026, net debt to credit adjusted EBITDA was 2.51 to 1.0, and cash and cash equivalents totaled $569 million.
02—Key points
Key Highlights
- Q2 2026 net sales rose 2% to $1.954 billion, with comparable currency neutral sales up 6% per the filing.
- Q2 2026 operating profit was $158 million versus $142 million; net income attributable to IFF shareholders was $50 million versus $599 million, which included a $488 million debt extinguishment gain in the prior year.
- Food Ingredients business sale to CVC Capital Partners carries estimated proceeds of $3.832 billion, with IFF retaining a 10% equity interest; closing expected by end of Q2 2027.
- Board authorized a $2.5 billion enhanced share repurchase program on August 4, 2026, including a $500 million accelerated repurchase.
- A $1.0 billion delayed draw term loan was entered into on June 23, 2026 to refinance €800 million of 1.800% notes due September 25, 2026.
- Pending sale of Botanical Extracts, Vitamins & Minerals, and Food Enhancement Products is expected to produce a pre-tax loss of $200 million to $300 million.
- A $27 million loss on assets held for sale was recorded for the CitraSource business, which closed July 1, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, International Flavors & Fragrances kept $0.03.
- Revenue$1.95B100.0%
- Cost of revenue−$1.10B56.3%
- Gross profit$853.0M43.7%
- Operating costs−$695.0M35.6%
- Operating income$158.0M8.1%
- Interest, other & tax−$107.0M5.5%
- Net income$51.0M2.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 4, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.95B$1.92B | +1.8% |
| Cost of Revenue | $1.10B$1.09B | +0.5% |
| Gross Profit | $853.00M$824.00M | +3.5% |
| R&D Expenses | $170.00M$170.00M | 0.0% |
| SG&A Expenses | $437.00M$409.00M | +6.8% |
| Operating Income | $158.00M$142.00M | +11.3% |
| Interest Expense | $46.00M$61.00M | −24.6% |
| Net Income | $51.00M$599.00M | −91.5% |
| EPS (Basic) | $0.20$2.34 | −91.5% |
| EPS (Diluted) | $0.20$2.33 | −91.4% |
| Shares Outstanding (Basic) | 255.00M256.00M | −0.4% |
| Shares Outstanding (Diluted) | 257.00M257.00M | 0.0% |
05—Questions
Frequently Asked Questions
Why did net income attributable to IFF shareholders drop so sharply in the second quarter?
Net income attributable to IFF shareholders was $50 million in Q2 2026 compared with $599 million in Q2 2025. The prior-year quarter included a $488 million gain on extinguishment of debt, and the 2026 quarter's continuing operations pre-tax income of $64 million was reduced by a $27 million loss on assets held for sale and a 48.4% effective tax rate.
What is the status of the Food Ingredients divestiture?
IFF agreed on May 29, 2026 to sell the Food Ingredients disposal group to funds advised by CVC Capital Partners for estimated proceeds of $3.832 billion, less $98 million of remaining costs to sell. IFF will retain an approximate 10% equity interest. The transaction is expected to close by the end of the second quarter of 2027, subject to customary conditions and regulatory approvals.
How will the company fund its new share repurchases?
The filing states IFF plans to fund repurchases from cash provided by operating activities, short-term debt, and net cash proceeds from the Food Ingredients divestiture. The $500 million accelerated repurchase is expected in the second half of 2026, and the remaining $2.0 billion is expected after the Food Ingredients closing, with completion targeted by the end of 2027.
What do the ongoing antitrust and regulatory matters mean for investors?
The filing states IFF is cooperating with investigations by the European Commission, UK CMA, Swiss Competition Commission, Mexican Competition Commission and others concerning fragrance businesses, and that it has recognized provisions based on best estimates. IFF states it cannot predict the duration or outcome, and that an adverse outcome could result in significant fines or payments and could have a material adverse effect.
How did the company's debt position change?
Total debt was $5.699 billion at June 30, 2026, compared with $5.992 billion at December 31, 2025. The company was in compliance with all covenants, with a net debt to credit adjusted EBITDA ratio of 2.51 to 1.0 against a covenant maximum of 3.75 to 1.00 under the revolving credit agreement, and had no borrowings under its $2 billion revolving credit facility.
06—Continue