Sonoco Products

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 26 Feb 2026, plus the 10-Q filed 28 Jul 2026 and 7 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Risks Related to the Domestic and Global Economies and to Doing Business Globally

  Could happen

  In addition, in response to the United States-Mexico-Canada Agreement (“USMCA”), other countries may change their own trade policies, including the imposition of additional tariffs and quotas, which could also adversely affect our business outside the United States. If further tariffs are imposed on a broader range of imports, further retaliatory trade measures are taken by countries in response to tariffs, or efforts are made to withdraw from or substantially modify such agreements, then we may be required to raise our prices or incur additional expenses, which may result in the loss of customers and harm our sales, earnings, business, financial condition, and results of operations. Furthermore, the duty preferential treatment for goods that qualify for the USMCA was temporarily exempted from the United States 25% tariff on Mexican and Canadian goods, and although Canada imposed retaliatory tariffs on goods coming from the United States that did not originally exempt USMCA-qualified goods, Canada lifted many of its retaliatory tariffs in September 2025, apart from those on steel, aluminum, and autos. Some of the enumerated goods subject to these tariffs include products and materials shipped to Sonoco’s plants in Canada, and the Company may be unable to claim end-use exemptions to mitigate the impact of such tariffs. These or any future retaliatory measures, the removal of the exemption by the United States, or other changes to the USMCA or other trade arrangements, could impact our operations by increasing the cost of imported raw materials and finished goods from Canada and Mexico.

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• Risks Related to Information Technology and Cybersecurity

  Could happen

  We have continued to explore AI use cases in our operations, but there is no guarantee that our investment in such technologies will result in improvements in productivity, efficiency, or other anticipated benefits. While we are continuing to analyze potential risks arising from our use of AI, because AI technology is highly complex and rapidly developing, we may not be able to predict all of the risks that may arise relating to our current or any future use of AI.

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• Risks Related to the Domestic and Global Economies and to Doing Business Globally

  Already happened

  We continue to face uncertainty with respect to trade relations between the United States and many of its trading partners. For example, during 2025, the U.S. government announced, delayed, re-imposed and revised a series of broad-based, as well as country-, bloc- and sector-specific, tariffs on imports, as well as other trade policy changes. In August 2025, the U.S. government set firmly established reciprocal tariff rates for various countries that were, for the most part, incremental increases over the previously established baseline rate of 10%. Some countries announced retaliatory actions or plans for retaliatory actions, which gave rise to further escalations of trade measures by the United States and impacted countries. Such tariffs and other trade restrictions, and uncertainty related thereto, have had, and may in the future have, an adverse direct effect on our costs of products sold and margins and have had, and may in the future have, an adverse indirect effect due to reduced demand for our products or other impacts to our customers, suppliers or other business partners. On February 20, 2026, the U.S. Supreme Court invalidated certain of the tariffs implemented by the U.S. government. This ruling and any future changes in tariffs or other trade policies may result in additional changes and have further direct and indirect adverse effects on our consolidated financial 10 FORM 10-K SONOCO 2025 ANNUAL REPORT condition and results of operations. The Company is continuing to monitor and evaluate the full impact of the U.S. Supreme Court ruling and changing trade policies and regulations.

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• Risks Related to Accounting, Human Resources, Financial, and Business Matters and Taxation

  Could happen

  On January 5, 2026, the OECD announced the implementation of a side-by-side (“SbS”) system, which allows U.S.-parented multinationals to be exempt from certain components of the GMT due to having an eligible taxation system already in place under existing U.S. tax rules. The SbS system is effective for fiscal years beginning on or after January 1, 2026. As each country in which we operate evaluates their alignment with the recommendations and enacts GMT rules, the ultimate impact of any such changes on our effective tax rate remains uncertain.

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• Risks Related to the Domestic and Global Economies and to Doing Business Globally

  Tariff increases have in the past had, and we expect that such measures and any additional measures will in the future have, an adverse effect on our costs of products sold and margins, including by increasing the cost of imported raw materials, which costs we may be unable to pass on to our customers without affecting demand, and potentially disrupting supply chains, causing delays and logistical challenges. In order to mitigate the impact of these trade-related increases on our costs of products sold, we have increased, and may further increase in the future, prices in certain markets and, over the longer term, make changes in our supply chain and potentially, our global manufacturing strategy. For example, in 2025, the U.S. government announced the expansion of Section 232 tariffs on steel and aluminum imported into the United States (“Section 232 Tariffs”). As a result, imported steel and aluminum originating from most foreign countries is currently subject to a 50% duty. A portion of the steel and aluminum we purchase for our metal packaging and industrial paper packaging businesses is sourced from outside the United States, and although we generally negotiate agreements to share tariff costs with brokers from which we purchase certain raw materials and have the contractual ability to pass on cost increases due to tariffs to our customers, we may be unable to maintain such cost sharing and cost pass-on practices, and any price increases may cause our customers to find alternative suppliers and result in reduced demand for our products. If we are unable to successfully reduce or pass on these costs through price increases, adjust our supply chain without incurring significant costs, or locate alternative suppliers for raw materials or finished goods at acceptable costs or in a timely manner, our net sales, costs, and margins could be adversely affected.

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