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In Q1 2026, revenues declined across most sectors versus Q4 2025's holiday-driven results with Apparel & Luxury (-10%) most impacted. Top-line weakness contributed to a challenging margin environment although Health & Beauty performed well via ongoing cost actions and optimizing price/mix to offset volume declines. Sector-level margin bifurcation between top quartile and median players suggests a widening gap between those with pricing power and cost discipline versus those relying on promotions to defend volume. As inflation hits its highest level since May 2023 (3.8%) due to higher input and transportation costs, further P&L margin pressure will likely be the story for 2026 as many CPG companies focus on accelerating productivity to fund growth.
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