IFF · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

INTERNATIONAL FLAVORS & FRAGRANCES INC · 2026-08-04 · Importance 49 · Surprise 32 · No source text

Second-quarter gross profit increased $29 million, or 4%, to $853 million, and gross margin expanded 80 basis points to 43.7% from 42.9%. Six-month gross profit increased to $1.682 billion from $1.676 billion, while gross margin rose 140 basis points to 43.6%. Volume growth, productivity gains, and tariff refunds improved gross profit, partially offset by portfolio mix changes from divestitures.

Key facts

• Gross profit in the second quarter of 2026 increased $29 million, or 4%, to $853 million (43.7% of sales) compared to $824 million (42.9% of sales) in the 2025 period. source
• Cost of sales in Q2 2026 increased $6 million to $1,101 million (56.3% of sales) compared to $1,095 million (57.1% of sales) in Q2 2025. source
• Cost of sales for the first six months of 2026 decreased $115 million to $2,178 million (56.4% of sales) compared to $2,293 million (57.8% of sales) in the 2025 period primarily driven by the impact of divestitures of approximately $250 million and the benefit of tariff refunds recognized during the period. source
• The increase in gross profit was primarily driven by volume increases and productivity gains and the benefit of tariff refunds received and recognized during the quarter offset in part by the change in business portfolio mix due to divestitures. source

Impact estimates