Reynolds’ second quarter was marked by stable sales volumes and flat year-on-year revenue, which nevertheless surpassed Wall Street’s expectations. The market responded positively, reflecting confidence in Reynolds’ ability to manage a mixed operating environment. CEO Scott Huckins credited volume gains across waste bags, private label food bags, and party cups, highlighting the impact of new products like Hefty Fabuloso scented waste bags and ECOSAVE compostable cutlery. Management emphasized that product innovation and targeted value offerings were central to share gains, even as consumer confidence declined.
Is now the time to buy REYN? Find out in our full research report (it’s free).
Reynolds (REYN) Q2 CY2025 Highlights:
- Revenue: $938 million vs analyst estimates of $901.9 million (flat year on year, 4% beat)
- Adjusted EPS: $0.39 vs analyst estimates of $0.38 (3.9% beat)
- Adjusted EBITDA: $163 million vs analyst estimates of $159.8 million (17.4% margin, 2% beat)
- Revenue Guidance for Q3 CY2025 is $887.3 million at the midpoint, below analyst estimates of $897.2 million
- Management reiterated its full-year Adjusted EPS guidance of $1.58 at the midpoint
- EBITDA guidance for the full year is $660 million at the midpoint, above analyst estimates of $653.1 million
- Operating Margin: 12.6%, down from 15.1% in the same quarter last year
- Organic Revenue rose 1% year on year (-1% in the same quarter last year)
- Sales Volumes rose 1% year on year (0% in the same quarter last year)
- Market Capitalization: $4.74 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Reynolds’s Q2 Earnings Call
- Kaumil Gajrawala (Jefferies) asked about new capital deployment opportunities; CFO Nathan Lowe emphasized automation and domestic manufacturing, while CEO Scott Huckins highlighted continued investment in product innovation, citing Hefty Fabuloso waste bags and ECOSAVE cutlery.
- Andrea Teixeira (JPMorgan) inquired about gross margin recovery and elasticity; Lowe described ongoing cost headwinds and pricing actions, while Huckins explained that price gaps with store brands are narrowing and elasticity assumptions are built into guidance.
- Robert Ottenstein (Evercore ISI) questioned confidence in executing price increases amid greater value-seeking and promotions; Huckins noted brand strength and stable promotional levels, with no significant trade-down observed between branded and store brands.
- Peter Grom (UBS) asked if category growth expectations had changed; Huckins replied that consumer and category trends remain as expected, with no material impact from retail inventory destocking in the quarter.
- Jim Abbott (Barclays) probed the role of promotions in share gains and the impact of tariffs; Huckins explained that promotional activity was consistent year-over-year and that aluminum now comprises a larger share of cost headwinds as tariff rates have moderated.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will closely monitor (1) the pace and effectiveness of pricing actions to offset rising input costs, (2) the impact of automation and production reshoring on operational efficiency, and (3) the adoption and performance of new sustainable and value-oriented products. We will also track whether recent executive appointments accelerate progress in revenue management and innovation.
Reynolds currently trades at $22.54, up from $21.55 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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