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Reynolds Consumer Products Inc. (REYN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $938M, up $8M YoY and a clear beat vs S&P Global consensus $902.7M; Adjusted EPS of $0.39 also modestly beat consensus $0.375, while diluted GAAP EPS was $0.35 . Estimates values retrieved from S&P Global.*
  • Adjusted EBITDA of $163M landed at the high end of management’s $155–$165M guide, as SG&A reductions offset gross profit pressure from input cost inflation and pricing timing .
  • FY 2025 outlook reiterated: net revenues down low-single digits, Adjusted EBITDA $650–$670M, Adjusted EPS $1.54–$1.61; Q3 2025 guide calls for Adjusted EBITDA $160–$170M and Adjusted EPS $0.37–$0.41 .
  • Segment performance mixed: Hefty Waste & Storage volumes +6% with continued innovation (Fabuloso, Press to Close), while Tableware declined on foam weakness; non-retail (aluminum) sales rose to $51M, supporting revenue growth .
  • Tactical catalysts: ongoing price actions to fully recover commodity/tariff cost headwinds (2–4 pts), revenue growth management programs, and innovation in cooking and sustainable tableware; management emphasized brand pricing power and stable promo backdrop .

What Went Well and What Went Wrong

What Went Well

  • Share and volume gains in Hefty waste bags and store brand food bags; retail volume +6% in Waste & Storage, with strong traction from Hefty Fabuloso waste bags and Press to Close food bags . “We gained share in multiple areas including Hefty waste bags, private label food bags, and Hefty party cups” .
  • Adjusted EBITDA at the high end of the guide, supported by SG&A reductions despite cost inflation and pricing lag; CFO: “Second quarter adjusted EBITDA of $163 million was at the high end of our range” .
  • Non-retail (aluminum) revenues increased $12M to $51M, aiding overall net revenues; Cooking & Baking revenues +$4M with higher non-retail mix .

What Went Wrong

  • Gross profit declined to $226M (vs $256M YoY), with pressure from elevated aluminum and tariff impacts and the timing of pricing recovery; management expects pricing to fully recover cost increases but phasing weighed on Q2 .
  • Tableware segment down on foam: Net Revenues -$9M to $242M and Adjusted EBITDA -$4M to $35M, as foam declines continued to pressure mix .
  • Adjusted EBITDA fell YoY to $163M (vs $172M), driven by lower retail volume and input cost timing; adjusted EPS normalized excludes non-recurring items (CEO transition, strategic initiatives) .

Financial Results

Quarterly trend vs prior quarter

MetricQ4 2024Q1 2025Q2 2025
Total Net Revenues ($USD Millions)$1,021 $818 $938
Net Income ($USD Millions)$121 $31 $73
Diluted EPS ($USD)$0.58 $0.15 $0.35
Adjusted EBITDA ($USD Millions)$213 $117 $163
Adjusted EPS ($USD)$0.58 $0.23 $0.39

Year-over-year comparison (Q2)

MetricQ2 2024Q2 2025
Total Net Revenues ($USD Millions)$930 $938
Net Income ($USD Millions)$97 $73
Diluted EPS ($USD)$0.46 $0.35
Adjusted EBITDA ($USD Millions)$172 $163
Adjusted EPS ($USD)$0.46 (incl. $0.05 discrete tax) $0.39

Actual vs S&P Global consensus (Q2 2025)

MetricConsensus*ActualSurprise
Revenue ($USD Millions)$902.7*$938 +$35.3
Primary EPS ($USD)$0.375*$0.39 +$0.015

Estimates values retrieved from S&P Global.*

Segment breakdown (revenues and profitability)

SegmentQ2 2024 Revenues ($M)Q2 2025 Revenues ($M)Q2 2024 Adj. EBITDA ($M)Q2 2025 Adj. EBITDA ($M)
Reynolds Cooking & Baking$291 $295 $54 $49
Hefty Waste & Storage$244 $255 $71 $71
Hefty Tableware$251 $242 $39 $35
Presto Products$151 $153 $37 $33
Unallocated$(7) $(7) $(29) $(25)
Total$930 $938 $172 $163

KPIs and balance sheet

KPIQ2 2025
Cash and Cash Equivalents ($M)$57
Net Debt ($M)$1,576
Net Debt / TTM Adjusted EBITDA (x)2.4x
Cash from Operations (YTD, $M)$147
Capital Expenditure (YTD, $M)$79
Quarterly Dividend per Share ($)$0.23 (paid Aug 29, 2025)

Guidance Changes

MetricPeriodPrevious Guidance (Apr 30, 2025)Current Guidance (Jul 30, 2025)Change
Net Revenues (YoY)FY 2025Down low single digits Down low single digits Maintained
Adjusted EBITDA ($M)FY 2025$650–$670 $650–$670 Maintained
Adjusted EPS ($)FY 2025$1.54–$1.61 $1.54–$1.61 Maintained
Net RevenuesQ3 2025N/ADown low single digits vs $910M base New Q3 guide
Adjusted EBITDA ($M)Q3 2025N/A$160–$170 New Q3 guide
Adjusted EPS ($)Q3 2025N/A$0.37–$0.41 New Q3 guide
Quarterly Dividend ($/sh)Q2/Q3 2025$0.23 (May 30, 2025) $0.23 (Aug 29, 2025) Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Pricing power & promoMargin strength; retail volume acceleration, normalizing promos Outperformance without increased promo; price pack architecture work Pricing to fully recover cost headwinds; promo broadly stable YoY Stable promo; pricing stepped up in H2
Tariffs/commoditiesHigher operational costs noted; set up for 2025 $100–$200M annualized tariff/indirect cost headwind; 2–4 pts pricing contemplated 2–4 pts cost headwinds from commodities/tariffs; equivalent pricing recovery Headwind consistent; recovery progressing
Supply chain/onshoringIncreased automation investments Automation pipeline prioritized; network optimization Onshoring smaller product offerings; predictive maintenance gains Accelerating execution
Innovation & sustainabilityProduct innovation momentum (Reynolds Wrap, portfolio) Hefty Fabuloso scents; compostable cutlery (Atacama tech) Air Fryer Cups and Parchment Cooking Bags launched; Hefty ECOSAVE compostable cutlery rollout Broadening slate; scaling in market
Channel trendsRetail volumes accelerated; balanced mix Club and online gaining share; omnichannel high-teens penetration Club growth strongest among lower-income; online growth across demographics Value-seeking channels growing
DestockingN/ARetailer destocking headwind in Q1; assumed persistent Q2 destocking neutral; Q1 impact flows through year Normalizing

Management Commentary

  • CEO perspective: “We are executing well in a challenging operating environment while also investing in the long-term potential of our business… implementing programs to drive additional growth, margin and returns” . “We gained share in multiple areas including Hefty waste bags, private label food bags, and Hefty party cups… innovation remained a major contributor” .
  • Cost and pricing cadence: CFO noted “Second quarter adjusted EBITDA of $163 million was at the high end of our range… lower retail volume and timing of pricing actions relative to input cost increases were partially offset by reductions in SG&A” . He reiterated full recovery of increased commodity and tariff costs via pricing over the year .
  • Strategy and investments: “Onshoring of production of smaller product offerings… revenue growth management… trialing replanned promotions… Hefty ECOSAVE Cutlery… proprietary technology from Atacama” .

Q&A Highlights

  • Capital deployment priorities: multi-year automation pipeline; incremental opportunities to onshore manufacturing of smaller imported categories .
  • Gross margin trajectory: majority of YoY gross profit decline tied to timing of price recovery vs cost increase; expect better gross profit in Q3 with similar EBITDA to Q2 guide .
  • Promotional environment: trash category promotions broadly consistent with prior year; share gains not driven by stepped-up promos .
  • Tariff headwind sizing: still ~2–4 percentage points in 2025; aluminum now a larger component as tariff rates settled lower; net headwind consistent with April view .
  • Destocking: neutral in Q2; Q1 destocking viewed as a one-week supply reduction persisting through year but not worsening .

Estimates Context

  • Q2 2025 beat: Revenue $938M vs consensus $902.7M*; Adjusted/Primary EPS $0.39 vs consensus $0.375*; 6 revenue estimates and 7 EPS estimates contributed to consensus.* Actuals match company-reported figures . Estimates values retrieved from S&P Global.*
  • FY 2025 consensus EPS is $1.631*, modestly above the company’s $1.54–$1.61 guide midpoint, implying potential downward revisions if cost recovery slips or if elasticities weigh on volumes more than planned.* Estimates values retrieved from S&P Global.*

Key Takeaways for Investors

  • Revenue and EPS beats alongside reiterated full-year guidance support the near-term narrative of pricing power and disciplined cost control despite commodity/tariff headwinds .
  • Expect sequential price realization to improve margin trajectory into H2 as implemented pricing fully offsets 2–4 pts of cost inflation; monitor gross profit recovery pace vs guidance .
  • Mixed segment backdrop continues: Waste & Storage strength (innovation, share gains) offsets foam-driven Tableware pressure; watch foam mix and operational cost trends .
  • Non-retail aluminum sales provide a helpful revenue lever but can amplify exposure to aluminum pricing; track store brand foil pricing gap narrowing as a competitive dynamic .
  • Strategic initiatives (RGM, automation, onshoring) are likely to underpin structural margin expansion beyond 2025; capex is ramping to fund high-return projects .
  • Channel shifts to club and online reflect value-seeking behavior, particularly among lower-income demographics; RCP’s price-pack architecture and distribution gains align with this trend .
  • Dividend maintained at $0.23/sh, supported by leverage at 2.4x and solid YTD operating cash flow; balance sheet flexibility allows investment and shareholder returns concurrently .

Estimates values retrieved from S&P Global.*