Americold Swings to Profit as Cold-Storage Demand Steadies -- WSJ

By Liz Young

Americold Realty Trust, the world's second-largest owner and operator of refrigerated warehouses by capacity, is returning to growth as demand for cold storage stabilizes after years of whiplash.

"We're in a much more stable environment than where we were a year ago or certainly even two years ago," Chief Executive Rob Chambers said in an interview. "We're back into what I would consider the more normalized seasonal trends."

Americold, whose customers range from food producers such as Tyson Foods to retailers including Walmart, said Thursday it swung to a profit of $683 million in the third quarter from a loss of $11 million a year earlier. The growth was primarily due to a one-time gain from the creation of a joint venture with private-equity firm EQT, a deal that brought in about $1.15 billion in cash.

Americold's quarterly revenue increased 4.2% year-over-year to about $692 million, its third consecutive period of growth after revenue had fallen in 10 of the previous 12 quarters.

The turnaround comes after six years of volatile demand for the space used to store goods that range from meat and seafood to fresh flowers and pharmaceuticals.

During the pandemic, food producers, distributors and retailers rushed to take on additional temperature-controlled space to meet surging consumer demand. The heightened activity drew new developers interested in putting up the specialty buildings, which can cost twice as much on average to build as a standard warehouse.

When consumer spending slowed in 2022, many companies paused new leasing -- just as more newly constructed buildings became available.

Mismatched supply and demand pushed the vacancy rate for U.S. cold storage to a 20-year high of 7.7% in the second quarter of this year, according to the most recent data from real-estate services firm Newmark.

Construction of new buildings has slowed more recently, and some companies have started to take on additional space. Industry experts said some businesses might add more warehouse capacity after the cyclospora outbreak this summer and a recent wave of cyberattacks on supermarket freezers in Europe.

"There's not a whole lot of slack in the supply chain right now, and those incidents then are felt a lot faster," said Sara Stickler, chief executive of the Global Cold Chain Alliance, an industry organization. "We are going to see customers starting to look at maybe bringing some slack back into the supply chain."

Americold is looking at additional ways to grow amid an uncertain U.S. retail economy. Consumer spending grew 3.8% in the third quarter, according to the Commerce Department, even as shoppers grappled with inflation and higher gas prices.

"We're really focused on saying, OK, if the environment's going to remain relatively flat-ish, how do we continue to outperform in that environment?" Chambers said.

Those efforts include working to grow business with existing customers as well as win new customers. The company is also targeting growth in sectors such as pharmaceuticals, convenience stores and aerospace.

Americold has taken steps over the past year to strengthen its balance sheet. The company in August closed the joint-venture deal with EQT's active core infrastructure fund, which brought in about $1.15 billion in cash that the cold-storage operator used to pay down debt. Chambers said the partnership will also help fund growth.

Americold is in the process of selling or idling 27 of its less-profitable facilities.

Americold is developing new buildings, but it is focused on projects where a customer is lined up in advance. For example, it is developing a $163 million facility for french-fry maker McCain Foods in Wisconsin under a 20-year deal.

"We have seen over the last couple years incremental capacity come into the market that the industry is still digesting," Chambers said. "We think it's a much healthier and much more rational use of capital to allocate that to bespoke facilities that have long-term agreements tied to them."

Write to Liz Young at liz.young@wsj.com

(END) Dow Jones Newswires

November 05, 2026 06:31 ET (11:31 GMT)