Group 1: Market Overview - Investors holding mid-cap stocks have faced challenges due to inflation, higher interest rates, and tariffs impacting revenue and margins [1] - Many mid-cap stocks are trading near 52-week lows but offer dividends that compensate investors for holding [2] Group 2: Reynolds Consumer Products - Reynolds Consumer Products is experiencing pressure from inflation affecting raw material costs, particularly aluminum and resin, along with increased shipping and labor costs [3] - The company's revenue and earnings are under pressure as consumers shift to house brands, leading to a decline in volume and margins expected to continue in 2025 [4] - Analysts maintain a consensus price target of $28.33 for Reynolds, indicating an upside of over 27%, and the stock is trading at a discount with a P/E ratio of 13.21 [5] Group 3: Campbell's Company - Campbell's Company faces similar challenges as Reynolds, including rising aluminum prices and a shift in consumer preferences towards healthier options [6] - The Snacks division reported a 6% decline in net sales and a 29% drop in operating earnings year-over-year [7] - Despite these challenges, Campbell's has maintained a disciplined capital structure and increased its dividend by 5% at the start of the 2025 fiscal year [7] Group 4: J&J Snack Foods - J&J Snack Foods is experiencing increased input costs due to inflation but is largely shielded from tariffs [10] - The stock is trading at a discount to historical averages despite a P/E ratio of 26, with a consensus price target of $142.50 indicating a potential 25% increase [12] - The company's Theater business has been weak, with a 10% decline in North American box office sales impacting margins, but summer blockbusters may drive growth [11][12]

Group 1 - The company reported quarterly earnings of 23 cents per share, meeting analyst consensus estimates, while quarterly sales were $818 million, missing the consensus estimate of $820.39 million [1] - The CEO highlighted the company's resilience in a dynamic consumer and retail environment, stating that they outperformed their categories by two points in the quarter and are effectively navigating macro challenges [2] - The company lowered its FY2025 adjusted earnings guidance from a range of $1.61-$1.68 to $1.54-$1.61 [2] Group 2 - Following the earnings announcement, Reynolds Consumer Products shares fell 1% to trade at $22.78 [3] - Analysts adjusted their price targets for the stock, with UBS maintaining a Neutral rating and lowering the target from $26 to $25, and RBC Capital maintaining a Sector Perform rating and lowering the target from $30 to $25 [8]

Core Insights - Reynolds Consumer Products reported revenue of $818 million for the quarter ended March 2025, reflecting a year-over-year decline of 1.8% and a slight miss of 0.48% against the Zacks Consensus Estimate of $821.94 million [1] - The company's EPS remained unchanged at $0.23 compared to the same quarter last year, aligning with the consensus estimate [1] Revenue Performance by Segment - Reynolds Cooking & Baking generated $259 million, below the average estimate of $265.85 million, marking a year-over-year decline of 1.9% [4] - Hefty Waste & Storage reported $240 million, exceeding the average estimate of $229.58 million, with a year-over-year increase of 4.8% [4] - Unallocated revenues were reported at -$3 million, slightly better than the average estimate of -$3.80 million, but reflecting a significant year-over-year decline of 62.5% [4] - Presto Products achieved $143 million, close to the average estimate of $144.81 million, with no year-over-year change [4] - Hefty Tableware recorded $179 million, falling short of the average estimate of $185.53 million, representing a year-over-year decrease of 12.7% [4] Stock Performance - Over the past month, shares of Reynolds Consumer Products have returned -0.7%, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Reynolds Consumer Products reported quarterly earnings of $0.23 per share, matching the Zacks Consensus Estimate, and the same as the previous year [1] - The company posted revenues of $818 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.48%, and down from $833 million a year ago [2] - The stock has underperformed the market, losing about 12.2% since the beginning of the year compared to the S&P 500's decline of 5.5% [3] 分组2 - The earnings outlook for Reynolds Consumer Products is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $915.73 million, and for the current fiscal year, it is $1.59 on revenues of $3.66 billion [7] - The Consumer Products - Discretionary industry is currently in the bottom 21% of Zacks industries, which may negatively impact stock performance [8]

Financial Performance - Total net revenues decreased by 2% to $818 million for the three months ended March 31, 2025, compared to $833 million in the same period in 2024[95]. - Net income decreased by 37% to $31 million for the three months ended March 31, 2025, down from $49 million in the same period in 2024[80]. - Adjusted EBITDA for the three months ended March 31, 2025, was $117 million, a decrease of 4% from $122 million in the same period in 2024[95]. - Total net revenues decreased by $15 million, or 2%, to $818 million, primarily driven by lower volume, partially offset by higher pricing[97]. - Adjusted EBITDA decreased by $5 million, or 4%, to $117 million, due to lower revenue and higher material, manufacturing, and logistics costs[102]. Segment Performance - The Reynolds Cooking & Baking segment generated $259 million in net revenues, while the Hefty Waste & Storage segment generated $240 million[93]. - Reynolds Cooking & Baking segment net revenues increased by $3 million, or 1%, to $259 million, driven by higher non-retail volume and pricing[104]. - Hefty Waste & Storage segment net revenues increased by $6 million, or 3%, to $240 million, primarily due to higher volume[107]. - Hefty Tableware segment net revenues decreased by $29 million, or 14%, to $179 million, due to lower foam product volume[109]. Expenses and Cash Flow - Cost of sales remained relatively stable at $629 million for the three months ended March 31, 2025, compared to $632 million in the same period in 2024[95]. - Selling, general and administrative expenses decreased by 6% to $104 million for the three months ended March 31, 2025, compared to $111 million in the same period in 2024[95]. - Interest expense decreased by 16% to $21 million for the three months ended March 31, 2025, down from $25 million in the same period in 2024[95]. - Net cash provided by operating activities decreased by $43 million to $56 million, driven by reduced working capital benefits and lower net income[116]. - Net cash used in investing activities increased by $10 million to $39 million, attributed to higher capital expenditures[117]. - Net cash used in financing activities increased by $46 million to $96 million, primarily due to $50 million of voluntary principal payments on the Term Loan Facility[118]. Debt and Liquidity - As of March 31, 2025, the outstanding balance under the Term Loan Facility was $1,645 million, with no outstanding borrowings under the Revolving Facility[120]. - Cash dividends of $0.23 per share were declared and paid during the three months ended March 31, 2025, with expectations to continue quarterly payments[135]. - 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[137]. - The company cannot ensure that its business will generate sufficient cash flow from operations or that future borrowings will be available in amounts sufficient to pay indebtedness or fund other liquidity needs[137]. Market and Strategic Considerations - The company holds the 1 market position in the U.S. consumer foil market with Reynolds Wrap, maintaining over 50% market share in most categories[76]. - There are no material changes in the company's exposure to market risk during the three months ended March 31, 2025[141]. - Critical accounting policies and estimates have a material impact on the presentation of the company's financial statements[139]. - The company may incur additional indebtedness and guarantee indebtedness as part of its financial strategy[136]. - The company is subject to various restrictions on its ability to engage in mergers, sell assets, or make investments[136]. - Future performance will depend on numerous factors, many of which are beyond the company's control[137]. - The company has not provided specific guidance on new product development or market expansion strategies in the provided content[136][137][139][141]. - The company has not reported any recent mergers or acquisitions in the provided content[136][137][139][141].

Financial Data and Key Metrics Changes - The company reported net revenues of $818 million for Q1 2025, with retail revenues of $767 million, reflecting a decrease of $28 million compared to Q1 2024 due to retailer destocking and declines in the foam category [13][14] - Adjusted EBITDA was $117 million, down from $122 million in the prior year, primarily driven by lower retail sales [14] - Adjusted earnings per share (EPS) remained unchanged at $0.23 compared to Q1 2024 [14] - The company expects 2025 net revenues to decline low single digits compared to 2024 and adjusted EBITDA in the range of $650 million to $670 million [14][15] Business Line Data and Key Metrics Changes - The company outperformed its categories by two points at retail, capturing share in household foil, waste bags, food bags, and non-foam disposable tableware [7] - Non-retail revenues increased by $12 million [14] - The company introduced new products, including hefty compostable cutlery and Reynolds Kitchen air fryer cups, to drive innovation and connect with younger consumers [7][12] Market Data and Key Metrics Changes - Retail volumes are expected to be down 2% to 5% in Q2 2025 compared to Q2 2024, driven by lower volumes and partially offset by pricing [17] - The company anticipates more pressure on its categories, with lower consumer confidence and retailers managing inventory levels contributing to the challenges [15][31] Company Strategy and Development Direction - The company is focused on driving growth at or above its categories, expanding margins, and investing in a more stable earnings growth model [6][7] - Strategic initiatives include targeted distribution gains, prioritizing larger scale innovation, and reallocating promotional spend to higher return opportunities [11][12] - The company is adapting to a dynamic macro environment by investing in high return programs and leveraging competitive advantages [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted that retailer destocking is expected to be a permanent change rather than a temporary adjustment [23][24] - The company is not altering its strategic direction despite recent tariff announcements and a challenging retail environment, emphasizing the need to control its own destiny through innovation and distribution gains [12] - Management expressed confidence in the innovation pipeline, highlighting new product launches and the potential for growth [62] Other Important Information - The company successfully refinanced its term loan facility, enhancing financial flexibility [19] - The updated segment reporting now reflects the international business based on product category alignment [18] Q&A Session Summary Question: Can you discuss the retailer destocking piece? - Management indicated that retailer destocking is expected to be a permanent change and will flow through the balance of the year [23][24] Question: Can you clarify the strategic expenses related to revenue growth management? - Management explained that strategic investments focus on evaluating revenue growth management, cost out work, and supply chain efficiency [25][26] Question: What is the guidance for category growth? - The guidance now contemplates a greater quantum of pricing due to lower expectations of retail volumes, with retailer destocking being a significant factor [30][31] Question: Can you elaborate on the tariff pressure? - Management noted that direct tariff exposure is a single-digit percentage of overall COGS, with significant indirect impacts from commodities like aluminum [38][39] Question: How has consumption performed exiting the quarter? - Management reported that retail business performed as expected, with destocking impacting the P&L, but March showed better performance than January and February [49][50] Question: How is the innovation pipeline looking for this year? - Management expressed confidence in the innovation pipeline, highlighting new product launches and the potential for growth [62]

Financial Data and Key Metrics Changes - The company reported net revenues of $818 million for Q1 2025, with retail revenues of $767 million, reflecting a decrease of $28 million compared to Q1 2024, primarily due to retailer destocking and declines in the foam category [13][14] - Adjusted EBITDA for the quarter was $117 million, down from $122 million in the prior year, driven by lower retail sales [14] - Adjusted earnings per share (EPS) remained unchanged at $0.23 compared to Q1 2024 [14] Business Line Data and Key Metrics Changes - The company outperformed its categories by two points at retail, capturing market share in household foil, waste bags, food bags, and non-foam disposable tableware [7][8] - Non-retail revenues increased by $12 million, indicating growth in segments outside traditional retail channels [14] Market Data and Key Metrics Changes - The company anticipates net revenues for 2025 to decline by low single digits compared to 2024, with adjusted EBITDA expected in the range of $650 million to $670 million [15][16] - The impact of tariffs is estimated to create cost headwinds of $100 million to $200 million annually, with pricing strategies expected to offset these costs [16][38] Company Strategy and Development Direction - The company is focused on driving growth above category levels, expanding margins, and investing in a stable earnings growth model [6][7] - Strategic initiatives include targeted distribution gains, prioritizing larger-scale innovations, and optimizing supply chain efficiencies [11][12] - The company has updated its segment reporting to better align international business with product categories, reflecting a shift in strategy to enhance growth [18][40] Management's Comments on Operating Environment and Future Outlook - Management noted that retailer destocking is expected to persist throughout the year, impacting revenue expectations [23][24] - The company remains committed to innovation and distribution gains, despite challenges from tariffs and a dynamic retail environment [12][20] - Management expressed confidence in the underlying health of the business and the ability to recover gross profit through pricing and productivity measures [9][10] Other Important Information - The company successfully refinanced its term loan facility, enhancing financial flexibility and supporting strategic priorities [19] - Capital spending is expected to increase by $20 million to $40 million in 2025 to drive growth and margin expansion [19] Q&A Session Summary Question: Can you discuss the retailer destocking impact? - Management indicated that retailer destocking is expected to be a permanent adjustment rather than a temporary phenomenon, affecting the full year outlook [23][24] Question: What is the guidance for category growth? - The guidance reflects lower expectations for retail volumes due to destocking and consumer pressure, with pricing adjustments factored in [30][31] Question: Can you elaborate on tariff pressures? - Direct tariff exposure is a single-digit percentage of overall COGS, with significant indirect impacts from commodities like aluminum [36][38] Question: How is the innovation pipeline looking? - The company is optimistic about its innovation pipeline, with new product launches such as hefty compostable cutlery and additional scents in existing product lines [63][64] Question: What are the pricing mechanics and impact of destocking? - Pricing adjustments typically take two to six months to reflect in retail, and destocking has altered the usual timeline for pricing realization [67][71]

Q1 2025 Earnings Call April 30, 2025 This presentation contains statements reflecting our views about our future performance that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including our second quarter and fiscal year 2025 guidance. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "intends," "outlook," "forecast", "position", "committed," "plans," "anticipate ...

Financial Performance - Net Income decreased to $31 million in Q1 2025 from $49 million in Q1 2024, impacted by $10 million in refinancing costs and $8 million in CEO transition costs[4] - Net Revenues were $818 million in Q1 2025, down 1.8% from $833 million in Q1 2024, with Retail Net Revenues decreasing 3% to $767 million[7] - Adjusted EBITDA decreased to $117 million in Q1 2025 from $122 million in Q1 2024, reflecting lower volume and higher operational costs[4] - Net income for the three months ended March 31, 2025, was $31 million, down from $49 million in the same period of 2024, representing a decrease of 36.7%[35] - Total revenues for the three months ended March 31, 2025, were $818 million, a decrease of 1.8% compared to $833 million in the same period of 2024[37] - Adjusted EBITDA for the three months ended March 31, 2025, was $117 million, down from $122 million in the same period of 2024, reflecting a decrease of 4.1%[47] - The company reported a net cash provided by operating activities of $56 million for the three months ended March 31, 2025, compared to $99 million in the same period of 2024, a decline of 43.4%[35] Future Guidance - The Company expects 2025 Net Revenues to decline low single digits compared to 2024, with Adjusted EBITDA projected between $650 million and $670 million[20] - Second quarter 2025 Net Revenues are anticipated to decrease by 2% to 5% compared to Q2 2024, with Adjusted EBITDA expected to be between $155 million and $165 million[21] - Adjusted EPS for 2025 is expected to be between $1.54 and $1.61, with two to four points of positive pricing anticipated to offset cost increases[20] - Future guidance for fiscal year 2025 indicates expected adjustments for Adjusted EBITDA and Adjusted EPS, but specific reconciliations cannot be provided at this time due to uncertainties[44] Debt and Cash Management - Cash and cash equivalents were $58 million as of March 31, 2025, with total debt at $1,637 million, resulting in Net Debt of $1,579 million[17] - The Company refinanced $1.645 billion of its term loan, extending maturity to 2032 and enhancing financial flexibility[5] - The company executed a debt refinancing in March 2025, incurring a debt refinancing expense of $13 million[47] - Net debt as of March 31, 2025, was $1,579 million, with a Net Debt to Trailing Twelve Months Adjusted EBITDA ratio of 2.3x[54] Segment Performance - The Reynolds Cooking & Baking segment generated revenues of $259 million, a slight increase of 1.2% from $256 million in the same period of 2024[37] - The Hefty Waste & Storage segment saw a revenue increase of 2.6% to $240 million from $234 million in the same period of 2024[37] - The Hefty Tableware segment experienced a revenue decline of 13.5%, with revenues of $179 million compared to $208 million in the same period of 2024[37] Dividends - The Company declared a quarterly dividend of $0.23 per common share, payable on May 30, 2025[23]

Core Viewpoint - Reynolds Consumer Products (NASDAQ: REYN) is a manufacturer of waste and storage, cooking, and tableware products, which has been trading at high multiples since its listing. The company has recently released guidance that is below market expectations, leading to a focus on investment ideas that involve companies paying healthy dividends while awaiting capital appreciation [1]. Group 1 - The company is identified as a potential investment opportunity due to its ability to reward shareholders through dividends and capital appreciation [1]. - The current market turmoil has resulted in the company's shares being temporarily undervalued compared to its fundamentals, peers, and historical levels [1]. - There is an emphasis on finding businesses with high odds for capital appreciation, preferably driven by foreseeable catalysts [1].