Quad/Graphics Inc., which still relies heavily on revenue from commercial printing, anticipates a fourth consecutive year of sales declines in 2025 as sales and profits face headwinds including a postal rate increase and possible tariffs on paper from Canada.
The Sussex-based printing and marketing firm (NYSE: QUAD) continues diversifying its business from shrinking commercial printing segments, such as magazines and newspaper inserts, to higher-margin targeted print products and Quad’s marketing and advertising businesses.
Quad executives told analysts and investors in late 2024 the company would see continued sales declines until 2027 or 2028, when revenue is expected to increase and cash flow to improve.
For the near term, the company last week increased its quarterly dividend by 50% to 7.5 cents per share per quarter, or 30 cents per share annually.
Chairman and CEO Joel Quadracci told analysts Thursday that Quad expects U.S. postal rate increases to continue outpacing the overall inflation rate. That adds to customer costs and causes some customers to reduce the volume of printed products they’re planning to mail, he said.
Quadracci said he expects another postal rate increase of up to 13% in July. The latest rate hikes were planned under outgoing Postmaster General Louis DeJoy, but Quadracci said he expects the U.S. Postal Service to implement the rate hike regardless of the organization’s leadership.