The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at ...

Core Insights - Reynolds Consumer Products reported quarterly earnings of $0.42 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, and showing a slight increase from $0.41 per share a year ago, resulting in an earnings surprise of +7.69% [1] - The company achieved revenues of $931 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.60% and reflecting a year-over-year increase from $910 million [2] - The stock has underperformed the market, losing approximately 12.2% since the beginning of the year, while the S&P 500 has gained 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $992.49 million, and for the current fiscal year, it is $1.57 on revenues of $3.65 billion [7] - The estimate revisions trend for Reynolds Consumer Products was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Consumer Products - Discretionary industry is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Total net revenues increased by 2% to $931 million for the three months ended September 30, 2025, compared to $910 million in the same period in 2024[88]. - Net income decreased by 8% to $79 million for the three months ended September 30, 2025, down from $86 million in the same period in 2024[89]. - Adjusted EBITDA for the three months ended September 30, 2025, was $168 million, compared to $171 million in the same period in 2024[96]. - Net income for the nine months ended September 30, 2025, decreased by 20% to $184 million, down from $231 million in the same period in 2024[90]. - Adjusted diluted EPS for the three months ended September 30, 2025, was $0.42, compared to $0.41 in the same period in 2024[97]. - Total net revenues for the three months ended September 30, 2025, increased by $21 million, or 2%, to $931 million, primarily driven by higher pricing related to input costs[107]. - Gross profit for the three months ended September 30, 2025, decreased by $6 million, or 3%, to $233 million, with a gross margin of 25%[106]. - Adjusted EBITDA for the three months ended September 30, 2025, decreased by $3 million, or 2%, to $168 million, impacted by lower volume[112]. - For the nine months ended September 30, 2025, total net revenues increased by $12 million, or less than 1%, to $2,687 million[131]. - Total net revenues increased by $12 million, or 0.5%, to $2,687 million, primarily driven by higher pricing related to input costs[132]. - Adjusted EBITDA decreased by $18 million, or 4%, to $447 million, mainly due to lower retail volume and higher material costs[138]. - Cost of sales increased by $62 million, or 3%, to $2,039 million, driven by higher input and manufacturing costs[133]. Segment Performance - The Reynolds Cooking & Baking segment generated $308 million in net revenues for the three months ended September 30, 2025, up from $294 million in 2024[102]. - The Hefty Waste & Storage segment reported net revenues of $266 million for the three months ended September 30, 2025, compared to $253 million in 2024[102]. - The Hefty Tableware segment achieved net revenues of $200 million for the three months ended September 30, 2025, an increase from $222 million in 2024[102]. - Hefty Waste & Storage segment net revenues increased by $13 million, or 5%, to $266 million, attributed to higher volume[116]. - Hefty Tableware segment net revenues decreased by $22 million, or 10%, to $200 million, primarily due to lower foam volume[118]. - Presto Products segment net revenues increased by $13 million, or 9%, to $163 million, driven by higher volume[121]. - Reynolds Cooking & Baking segment net revenues increased by $21 million, or 2%, to $862 million, with retail revenues down by $18 million[140]. - Hefty Waste & Storage segment net revenues increased by $29 million, or 4%, to $761 million, primarily driven by increased volume[142]. - Hefty Tableware segment net revenues decreased by $59 million, or 9%, to $622 million, attributed to lower foam volume[144]. - Presto Products segment net revenues increased by $16 million, or 4%, to $460 million, driven by higher volume[146]. Cash Flow and Dividends - Net cash provided by operating activities decreased by $67 million to $240 million, primarily due to lower net income[151]. - Cash dividends declared during the three and nine months ended September 30, 2025, were $0.23 and $0.69 per share, respectively[171]. - The company expects to continue paying cash dividends quarterly, subject to the discretion of the Board of Directors and dependent on various financial factors[171]. - The company believes its projected cash position and cash flows from operations are sufficient to meet debt service, capital expenditures, and working capital needs for the foreseeable future[173]. Debt and Obligations - As of September 30, 2025, the outstanding balance under the Term Loan Facility was $1,636 million, with no borrowings under the Revolving Facility[155]. - As of September 30, 2025, the amount of obligations outstanding under the Supply Chain Finance program was $10 million, down from $12 million as of December 31, 2024[170]. - Interest expense, net decreased by $4 million, or 16%, to $21 million, due to a lower outstanding principal balance[109]. - Interest expense, net decreased by $13 million, or 17%, to $63 million due to lower outstanding principal balance[135]. Market Position and Sustainability - The company holds the 1 market position in the U.S. consumer foil market with Reynolds Wrap, capturing over 50% market share in most categories[85]. - The company is focused on sustainable solutions, including products made from recycled materials and compostable options across its segments[86]. - There have been no material changes in the company's exposure to market risk during the nine months ended September 30, 2025[178].

Financial Data and Key Metrics Changes - Third quarter net revenues were $931 million, an increase of more than 2% from $910 million in the year-ago period [16] - Adjusted EBITDA was $168 million compared to $171 million in the year-ago period, reflecting improved results in all operating segments [17] - Adjusted EPS was $0.42 versus $0.41 in the year-ago period, reflecting lower interest costs and tax initiatives [17] Business Line Data and Key Metrics Changes - Retail revenue of $864 million increased 1% compared to the third quarter of 2023, with retail volume growing 1% excluding foam products [16] - Reynolds Wrap retail sales were up 7%, with volumes outperforming the category [9] - Hefty brand, a nearly $2 billion brand, continues to lead in the scented waste bag segment, driving growth in the waste bag category [11][12] Market Data and Key Metrics Changes - The operating environment remains challenging, with low and middle-income consumers under pressure and retailers facing cost inflation [8] - The company noted that inflation remains above the Fed's target, impacting consumer sentiment negatively [34] Company Strategy and Development Direction - The company is focusing on innovation and revenue growth management to drive share gains and profitability [39] - New leadership, including a Chief Commercial Officer and Chief Operations Officer, is expected to enhance operational capabilities and drive growth [14][39] - The company is investing in high-return projects to support growth and improve margins [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the promotional environment and addressing consumer pressures [31][34] - The company anticipates a flat to down 1% revenue outlook for the full year compared to 2024, with adjusted EBITDA guidance of $655 million to $665 million [19] - Management highlighted the importance of maintaining cost discipline and leveraging U.S.-centric manufacturing advantages [8][19] Other Important Information - The company is making progress in managing manufacturing, supply chain, and SG&A costs while driving market share [7] - New product innovations, such as Reynolds Kitchens Air Fryer Liners, have been recognized for their growth potential [10] Q&A Session Summary Question: How do you see the setup for the important holiday season in terms of promotional intensity and consumer behavior? - Management noted increased promotional activity in waste and food bags but feels confident in navigating the environment, with Hefty Waste Bags outperforming the category [31][32][34] Question: Why did you flag the risk of retailers shifting store brands to other suppliers? - Management indicated that economic challenges and tariff uncertainties could lead retailers to seek value through private label business, but they expect to win more than they lose as a U.S.-centric manufacturer [35] Question: Can you discuss the long-term strategy related to operational capabilities and growth? - Management emphasized the focus on innovation, revenue growth management, and driving additional share at the customer level as key components of their strategy [39][40] Question: What is the outlook for the tableware business and foam headwinds? - Management stated that foam headwinds are expected to lessen next year, and they are pleased with how profitability is being managed despite volume declines [45] Question: Can you comment on the promotional impact in the Hefty Waste and Storage segment? - Management acknowledged increased promotional intensity but highlighted that their promotional activity aligns with overall company levels, contributing to strong performance [48] Question: What is the current state of consumer behavior and its impact on Reynolds Cooking and Baking? - Management noted modest tailwinds from increased cooking at home but also acknowledged the impact of rising prices in the marketplace [66]

Financial Data and Key Metrics Changes - Third quarter net revenues were $931 million, an increase of more than 2% from $910 million in the year-ago period [16] - Adjusted EPS was $0.42 compared to $0.41 in the year-ago period, reflecting lower interest costs and tax initiatives [17] - Consolidated adjusted EBITDA was $168 million compared to $171 million in the year-ago period [17] Business Line Data and Key Metrics Changes - Retail revenue of $864 million increased 1% compared to the third quarter of 2023, with retail volume growing 1% excluding foam products [16] - Reynolds Wrap retail sales were up 7%, with volumes outperforming the category [9] - Hefty Waste Bags saw retail takeaways increase by 9%, outperforming the category by 10 points [31] Market Data and Key Metrics Changes - The operating environment remains challenging, particularly for low and middle-income consumers facing cost inflation [8] - The company noted that inflation remains around 3%, above the Fed's target of 2% [33] - Consumer sentiment has declined, with double-digit decreases year to date heading into the holidays [33] Company Strategy and Development Direction - The company is focusing on innovation and revenue growth management to drive share gains and profitability [39] - A new Chief Commercial Officer is leading growth programs to enhance market share across major customers [9] - The company is investing in high-return projects to support growth and drive margin improvements [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in retail trends and the effectiveness of implemented programs to drive near and long-term results [19] - The company anticipates net revenues to be flat to down 1% for the full year compared to 2024 [19] - Management highlighted the importance of maintaining cost discipline in all areas, including SG&A [19] Other Important Information - The company is making progress in managing manufacturing, supply chain, and SG&A costs while driving market share [7] - New product innovations, such as Reynolds Kitchens Air Fryer liners, have been recognized for their growth potential [10] - The company is positioned well within its target leverage range of 2x-2.5x EBITDA, allowing for continued investment in growth opportunities [21] Q&A Session Summary Question: How do you see the setup for the important holiday season in terms of promotional intensity and consumer behavior? - Management noted increased promotional activity in waste and food bags but feels confident in navigating the promotional environment [31][32] - Consumer sentiment remains under pressure, with inflation and cooling labor markets impacting lower-income demographics [33][34] Question: Can you elaborate on the risk of retailers shifting store brands to other suppliers? - Management flagged this risk due to economic challenges and uncertainty in supply chains, but expects to win more than lose as a US-centric manufacturer [34] Question: What is the grand plan related to operational capabilities and long-term growth? - The company is focused on driving growth through innovation, revenue growth management, and share gains at the customer level [39] Question: What is the outlook for the tableware business and foam products? - The tableware business is down primarily due to foam headwinds, but profitability has increased despite volume declines [42][43] Question: How is the Hefty Waste and Storage segment performing in terms of profitability and distribution? - The segment continues to perform well, with significant volume growth and effective management of promotional activities [46][47] Question: What is the current state of consumer behavior regarding dining out versus cooking at home? - There are modest tailwinds from increased cooking at home, but rising prices in the marketplace are also a factor [64]

Financial Data and Key Metrics Changes - Third quarter net revenues were $931 million, an increase of more than 2% from $910 million in the year-ago period [15] - Adjusted EBITDA was $168 million compared to $171 million in the year-ago period, reflecting improved results in all operating segments [16] - Adjusted EPS was $0.42 versus $0.41 in the year-ago period, reflecting lower interest costs and tax initiatives [16] Business Line Data and Key Metrics Changes - Retail revenue of $864 million increased 1% compared to the third quarter of 2023, with retail volume growing 1% excluding foam products [15] - Hefty Waste Bags and Reynolds Wrap aluminum foil were highlighted as strong performers, with Hefty Waste Bags year-to-date retail takeaways up 9% [26][10] - The tableware business grew EBITDA despite sales volumes being down 13%, demonstrating increasing success in driving profitability [16][39] Market Data and Key Metrics Changes - The operating environment remains challenging, particularly for low and middle-income consumers facing cost inflation [6][28] - The company noted a shift in consumer behavior, with more affluent consumers tending to be brand loyalists while lower-income demographics are more value-oriented [28][45] Company Strategy and Development Direction - The company is focusing on innovation, revenue growth management, and driving additional share at the customer level [33] - New leadership, including a Chief Commercial Officer and Chief Operations Officer, is expected to enhance growth programs and operational efficiency [8][12] - The company is investing in high-return projects to support growth and drive margin improvements [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the continued pressure on consumers and the potential for increased promotional activity in certain categories [28][26] - The company remains confident in its ability to navigate the promotional environment and expects to leverage its U.S.-centric manufacturing footprint as a competitive advantage [6][29] - For the full year, the company expects net revenues to be flat to down 1% compared to 2024, with adjusted EBITDA guidance of $655 million to $665 million [18] Other Important Information - The company is making progress in managing manufacturing, supply chain, and SG&A costs while driving market share [5][12] - The company has implemented pricing actions to recover commodity and tariff impacts, with gross profit showing sequential improvement [16][17] Q&A Session Summary Question: How do you see the setup for the holiday season in terms of promotional intensity and consumer behavior? - Management noted increased promotional activity in waste bags and food bags but feels confident in navigating the promotional environment, with retail takeaways for Hefty Waste Bags up 9% year-to-date [26][28] Question: Why did you flag the risk of retailers shifting store brands to other suppliers? - Management indicated that in a challenging economic climate, retailers may seek to drive value for consumers by shifting to private label business, but expects to win more than lose as a U.S.-centric manufacturer [29] Question: Can you discuss the impact of operational changes on long-term growth? - Management highlighted the addition of key executives aimed at driving growth through innovation and revenue growth management tools, with a focus on optimizing promotional spending [33][60] Question: What is the outlook for the tableware business and foam products? - Management stated that 80% of the decline in tableware was due to foam headwinds, but they are managing profitability effectively despite volume declines [39] Question: How is the Hefty Waste and Storage segment performing in the current environment? - Management noted that innovation and being a performance brand are driving success in the Hefty Waste and Storage segment, with significant volume growth [58]

Q3 2025 Financial Performance - Net Revenues reached $931 million[16] - Adjusted EBITDA was $168 million[16] - Adjusted EBITDA margin was 18%[16] Segment Performance (Q3 2025) - Reynolds Cooking & Baking: Net Revenues of $308 million, Adjusted EBITDA of $53 million, with a 17% margin[16] - Hefty Waste & Storage: Net Revenues of $266 million, Adjusted EBITDA of $74 million, with a 28% margin[16] - Hefty Tableware: Net Revenues of $200 million, Adjusted EBITDA of $29 million, with a 15% margin[16] - Presto Products: Net Revenues of $163 million, Adjusted EBITDA of $35 million, with a 21% margin[16] Year-to-Date (YTD) 2025 Financials - Net Revenues totaled $2,687 million[18] - Adjusted EBITDA amounted to $447 million[18] - Adjusted EBITDA margin was 17%[18] Q4 2025 Outlook - Net Revenues are expected to decrease by 1% to 5%[21] - Net Income is projected to be between $110 million and $118 million[21] - Adjusted EBITDA is forecasted to be between $208 million and $218 million[21] Full Year 2025 Outlook - Net Revenues are expected to be flat to down 1%[22] - Net Income is projected to be between $294 million and $302 million[22] - Adjusted EBITDA is forecasted to be between $655 million and $665 million[22]

Financial Performance - Net Revenues for Q3 2025 were $931 million, a 2% increase from $910 million in Q3 2024, with Retail Net Revenues up 1% to $864 million[5]. - Adjusted Net Income for Q3 2025 was $88 million, compared to $86 million in Q3 2024, while Net Income decreased to $79 million from $86 million in the prior year[4]. - Adjusted EBITDA for Q3 2025 was $168 million, down from $171 million in Q3 2024, reflecting lower volumes but improved pricing alignment[4]. - Year-to-date 2025 Adjusted Net Income was $220 million, down from $231 million in the comparable prior year period, impacted by a discrete tax benefit in 2024[11]. - Net income for the nine months ended September 30, 2025, was $184 million, a decrease of 20.3% compared to $231 million for the same period in 2024[28]. - Total revenues for the nine months ended September 30, 2025, reached $2,687 million, up from $2,675 million in 2024, representing a growth of 0.4%[30]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $447 million, down from $465 million in 2024, indicating a decline of 3.9%[40]. - The company projects Q4 2025 net income guidance between $110 million and $118 million, with adjusted EBITDA guidance ranging from $208 million to $218 million[48]. - For the fiscal year 2025, net income guidance is set between $294 million and $302 million, with adjusted net income projected between $337 million and $345 million[53]. Debt and Equity - The Company reported a Net Debt of $1,576 million, with a Net Debt to Trailing Twelve Months Adjusted EBITDA ratio of 2.4x as of September 30, 2025[12]. - As of September 30, 2025, total debt was $1,629 million, with net debt calculated at $1,576 million, resulting in a net debt to trailing twelve months adjusted EBITDA ratio of 2.4x[47]. - The company executed a term loan refinancing, resulting in proceeds of $743 million and repayments of existing term loans of the same amount[28]. - The total stockholders' equity rose to $2,180 million as of September 30, 2025, from $2,142 million as of December 31, 2024, reflecting an increase of 1.8%[26]. - The company reported a decrease in interest expense from $98 million in 2024 to $86 million in 2025[45]. Operational Metrics - Retail volume for Reynolds Cooking & Baking decreased 3%, while Hefty Waste & Storage saw a 5% increase in retail volume driven by distribution gains[6][7]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $240 million, a decrease of 21.8% from $307 million in 2024[28]. - Inventories increased to $639 million as of September 30, 2025, compared to $567 million as of December 31, 2024, marking an increase of 12.7%[26]. - The company incurred $10 million in debt refinancing expenses and $33 million in CEO transition and strategic initiatives costs for the fiscal year 2025[53]. Future Outlook - The Company expects full-year 2025 Net Revenues to be flat to down 1% compared to 2024's $3,695 million, with Adjusted EBITDA projected between $655 million and $665 million[13]. - The Company anticipates Q4 2025 Net Revenues to decline by 1% to 5% compared to Q4 2024's $1,021 million, with Adjusted EBITDA expected between $208 million and $218 million[14]. - The company anticipates continued focus on strategic initiatives and cost savings to enhance future performance[38]. - The diluted shares outstanding for the fiscal year 2025 is projected at 210.3 million, with diluted EPS guidance between $1.40 and $1.44[53]. Dividend Information - The Board of Directors approved a quarterly dividend of $0.23 per common share, expected to be paid on November 28, 2025[17]. Depreciation and Amortization - Depreciation and amortization expenses increased slightly from $129 million in 2024 to $133 million in 2025[45].

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Qualifications - The analyst is a certified FMVA and FPWMP, which provides expertise in financial statement analysis, valuation modeling, and investment portfolio construction [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst holds a degree in Finance from Alexandria University, graduating in 2024 with a CGPA of 3.6, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors, including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].

Core Viewpoint - Reynolds Consumer Products (REYN), a manufacturer of kitchen consumables such as aluminum foil, cling film, and garbage bags, saw a 4% increase in its stock price following its selection for inclusion in the S&P SmallCap 600 Index, effective September 24, reflecting the company's strong market performance [1]. Group 1 - Reynolds Consumer Products was selected for inclusion in the S&P SmallCap 600 Index [1]. - The inclusion is set to take effect on September 24 [1]. - The stock price of Reynolds Consumer Products increased by 4% in early trading [1].