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Reynolds Consumer Products(REYN) - 2025 Q2 - Earnings Call Transcript
2025-07-30 13:02
Financial Data and Key Metrics Changes - In Q2 2025, net revenues were $938 million, an increase from $930 million in the same period last year [17] - Retail revenue was flat at $887 million compared to 2024, with modest retail volume growth excluding foam products [17] - Adjusted EBITDA for Q2 was $100 million, compared to $172 million in the prior year [18] - Adjusted earnings per share (EPS) was $0.39, down from $0.41 in the previous year [18] - The company expects net revenues to decline low single digits compared to 2024, with adjusted EBITDA projected between $650 million and $670 million for the year [19][20] Business Line Data and Key Metrics Changes - The company gained market share in categories such as Hefty waste bags and private label food bags [6][17] - Product innovation contributed significantly to volume and share gains, with new products like Hefty Fabuloso scented waste bags and Reynolds Kitchens air fryer cups driving growth [7][10] Market Data and Key Metrics Changes - U.S. consumer confidence has decreased by 15 points in 2025, impacting consumer behavior [8] - Approximately 15% of U.S. households utilize SNAP benefits, which are being reduced, influencing purchasing decisions [9] Company Strategy and Development Direction - The company is focused on long-term growth and structural margin expansion, emphasizing product innovation and affordability [7][16] - Strategic initiatives include enhancing revenue growth management and onshoring production for smaller product categories [14][15] - The company is investing in automation and high-return projects to support growth and margin expansion beyond 2025 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing pricing strategies to offset higher input costs, despite a challenging operating environment [16][19] - The outlook for 2025 remains positive, with expectations for continued retail volume performance and disciplined cost management [20][22] Other Important Information - The company is adapting to shifts in shopping behavior, with strong performance in online sales [11] - New leadership appointments are expected to enhance commercial and operational performance [15] Q&A Session Summary Question: Investment areas and capital deployment - The company is prioritizing automation capital investments and onshoring manufacturing for smaller product categories [25] Question: Innovation and branding - Continued investment in Hefty scented waste bags and sustainable product offerings like Hefty EcoSafe cutlery is a focus [27] Question: Gross margin and pricing strategy - The company anticipates 2 to 4 points of cost headwinds and corresponding pricing recovery throughout the year [34][42] Question: Consumer purchase patterns and pricing execution - The company has successfully executed price increases and observed stable promotional levels compared to the previous year [48][50] Question: Retail inventory destocking impact - There was no significant impact from destocking in Q2, with a neutral effect on the company overall [60][66] Question: Promotional environment in trash category - The promotional environment remained stable, with share gains attributed to distribution investments and innovation [70] Question: Tariff headwinds - The company continues to face a 2 to 4 point headwind from tariffs, with aluminum costs being a significant factor [73]
Reynolds Consumer Products(REYN) - 2025 Q2 - Earnings Call Transcript
2025-07-30 13:00
Financial Data and Key Metrics Changes - In Q2 2025, net revenues were $938 million, an increase from $930 million in the same period last year [18] - Adjusted EBITDA for Q2 was $100 million, compared to $172 million in the prior year [20] - Adjusted earnings per share (EPS) was $0.39, down from $0.41 in the previous year [20] - The company expects net revenues to decline low single digits compared to 2024, with adjusted EBITDA projected between $650 million and $670 million for the year [21][22] Business Line Data and Key Metrics Changes - Retail revenue was flat at $887 million, with modest volume growth excluding a headwind from foam products [18][19] - Non-retail revenues increased to $51 million [18] - The company gained market share in hefty waste bags, private label food bags, and hefty party cups [6][7] Market Data and Key Metrics Changes - U.S. consumer confidence decreased by 15 points in 2025, impacting consumer behavior [8] - Approximately 15% of U.S. households utilize SNAP benefits, which are being reduced, affecting affordability and value perception [9] Company Strategy and Development Direction - The company is focusing on product innovation, including Hefty Fabuloso scented waste bags and Reynolds Kitchens air fryer cups, to drive volume and share gains [6][7] - Strategic initiatives are in place to enhance revenue growth management and supply chain efficiency, including onshoring production [14][15] - The company is investing in automation and high-return projects to support growth and margin expansion beyond 2025 [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment but expressed confidence in executing pricing strategies to offset input cost increases [16][18] - The company is adapting to shifts in consumer behavior, including increased online shopping and demand for affordable products [10][52] - Management reiterated confidence in 2025 earnings expectations and the potential for long-term growth [24] Other Important Information - The company is adding key members to its team to enhance commercial and operational performance [15] - The gross profit decline is attributed to the timing of pricing actions relative to input cost increases, with expectations for recovery in the latter half of the year [20][40] Q&A Session Summary Question: Investment areas and capital deployment - Management highlighted automation capital pipeline and onshoring manufacturing as new investment opportunities [27] Question: Innovation and branding - Continued investment in Hefty scented waste bags and sustainable product offerings like Hefty EcoSafe cutlery was emphasized [28][29] Question: Gross margin and pricing strategy - Management discussed cost headwinds and pricing recovery, expecting a balance in the latter half of the year [34][36] Question: Consumer purchase patterns and pricing execution - Management noted stable promotional levels and consumer behavior, with confidence in executing price increases [48][52] Question: Retail inventory destocking impact - Management indicated that destocking had a neutral impact in Q2, with no significant changes observed [60][66] Question: Promotional environment in trash category - Management clarified that promotional levels remained consistent year-over-year, attributing share gains to distribution and innovation [70][72]
Reynolds Consumer Products(REYN) - 2025 Q2 - Earnings Call Presentation
2025-07-30 12:00
For additional information on these and other factors that could cause our actual results to materially differ from those set forth herein, please see our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and subsequent filings. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as ...
Reynolds Consumer Products(REYN) - 2025 Q2 - Quarterly Results
2025-07-30 10:59
[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section summarizes Reynolds Consumer Products' Q2 and YTD 2025 financial performance and management's strategic commentary [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Reynolds Consumer Products reported mixed financial results for Q2 2025, with Net Income and Adjusted Net Income decreasing due to CEO transition costs, strategic investments, lower retail volume, and pricing actions, while Net Revenues saw a modest increase driven by non-retail sales Second Quarter 2025 Financial Highlights (Amounts in Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :------------ | | Net Revenues | $938 | $930 | +$8 | | Retail Net Revenues | $887 | $887 | Flat | | Non-Retail Revenues | $51 | $39 | +$12 | | Net Income | $73 | $97 | -$24 | | Adjusted Net Income | $83 | $97 | -$14 | | Adjusted EBITDA | $163 | $172 | -$9 | | EPS | $0.35 | $0.46 | -$0.11 | | Adjusted EPS | $0.39 | $0.46 | -$0.07 | - Adjusted EBITDA decreased due to lower retail volume and the timing of pricing actions relative to input cost increases, partially offset by reductions in SG&A[4](index=4&type=chunk) - Net Income included **$10 million** of after-tax CEO transition costs and strategic investments in cost savings and revenue growth initiatives[4](index=4&type=chunk) [Year to Date 2025 Financial Highlights](index=3&type=section&id=Year%20to%20Date%202025%20Financial%20Highlights) For the first half of 2025, the company experienced a decline in Net Income and Adjusted Net Income compared to the prior year, influenced by debt refinancing costs, CEO transition expenses, and strategic investments, with Adjusted EBITDA also decreasing due to lower retail volume, including first-quarter retailer inventory destocking Year to Date 2025 Financial Highlights (Amounts in Millions) | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change (YoY) | | :----------------------- | :------------------ | :------------------ | :------------ | | Net Revenues | $1,756 | $1,764 | -$8 | | Retail Net Revenues | Decreased 2% | N/A | -2% | | Non-retail Revenues | $104 | N/A | Increased | | Net Income | $105 | $145 | -$40 | | Adjusted Net Income | $132 | $145 | -$13 | | Adjusted EBITDA | $279 | $294 | -$15 | | EPS | $0.50 | $0.69 | -$0.19 | | Adjusted EPS | $0.63 | $0.69 | -$0.06 | - Net Income included **$27 million** of after-tax debt refinancing costs, CEO transition costs, and strategic investments[12](index=12&type=chunk) - Retail volume decreased **2%** year-to-date, driven by retailer destocking in the first quarter[19](index=19&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized strong execution in a challenging environment, highlighting investments in long-term potential, growth, margin, and returns, noting progress on programs to strengthen revenue and margin with benefits expected late in the year, and reiterating the full-year 2025 outlook - The Company is executing well in a challenging operating environment while investing in long-term potential, leveraging its US-centric business model for competitive advantage[3](index=3&type=chunk) - Results were in line with expectations, with pricing and other tools used to offset cost inflation[13](index=13&type=chunk) - Progress is being made on programs to strengthen revenue and margin potential, with benefits anticipated to begin late in 2025[13](index=13&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) This section details the financial performance of Reynolds Consumer Products' key segments, highlighting revenue and Adjusted EBITDA trends and their underlying drivers [Reynolds Cooking & Baking](index=2&type=section&id=Reynolds%20Cooking%20%26%20Baking) The Reynolds Cooking & Baking segment experienced a decrease in Adjusted EBITDA due to lower retail volumes and the timing of pricing actions relative to input cost increases, despite a slight increase in Net Revenues Reynolds Cooking & Baking Financials (Amounts in Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :---------------- | :------------------ | :------------------ | :------------ | | Net Revenues | $295 | $291 | +$4 | | Adjusted EBITDA | $49 | $54 | -$5 | - Retail volume decreased **5%** primarily reflecting promotional timing[6](index=6&type=chunk) [Hefty Waste & Storage](index=2&type=section&id=Hefty%20Waste%20%26%20Storage) Hefty Waste & Storage saw strong retail volume growth, driven by new product launches, leading to an increase in Net Revenues, while Adjusted EBITDA remained unchanged as higher revenue benefits were offset by increased operational costs and a slight decrease in pricing due to new product investments Hefty Waste & Storage Financials (Amounts in Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :---------------- | :------------------ | :------------------ | :------------ | | Net Revenues | $255 | $244 | +$11 | | Adjusted EBITDA | $71 | $71 | Unchanged | - Retail volume increased **6%**, with strong growth from Hefty Fabuloso® waste bags, Hefty Press to Close food bags, and other new products[7](index=7&type=chunk) - Investment in new product launches contributed to a **1% decrease** in pricing[7](index=7&type=chunk) [Hefty Tableware](index=2&type=section&id=Hefty%20Tableware) The Hefty Tableware segment experienced declines in both Net Revenues and Adjusted EBITDA, primarily driven by lower foam volume and related costs Hefty Tableware Financials (Amounts in Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :---------------- | :------------------ | :------------------ | :------------ | | Net Revenues | $242 | $251 | -$9 | | Adjusted EBITDA | $35 | $39 | -$4 | - Retail volume decreased **5%**, driven exclusively by foam declines[8](index=8&type=chunk) [Presto Products](index=2&type=section&id=Presto%20Products) Presto Products saw a modest increase in Net Revenues and retail volume, gaining additional share in store brand food bags, but Adjusted EBITDA decreased due to higher operational costs associated with scaling new distribution Presto Products Financials (Amounts in Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :---------------- | :------------------ | :------------------ | :------------ | | Net Revenues | $153 | $151 | +$2 | | Adjusted EBITDA | $33 | $37 | -$4 | - Retail volume increased **1%** as Presto's portfolio gained additional share in store brand food bags[9](index=9&type=chunk) [Components of Change in Net Revenues by Segment](index=8&type=section&id=Components%20of%20Change%20in%20Net%20Revenues%20by%20Segment) The overall 1% increase in total Net Revenues for Q2 2025 was driven by a 1% price increase and a 1% increase in non-retail volume, partially offset by a 1% decrease in retail volume, while year-to-date, total Net Revenues were flat, with a 1% price increase offset by a 2% retail volume decline Components of Change in Net Revenues (Q2 2025 vs. Q2 2024) | Segment | Price | Retail Volume/Mix | Non-Retail | Total | | :------------------------ | :---- | :---------------- | :--------- | :---- | | Reynolds Cooking & Baking | 4% | (5)% | 2% | 1% | | Hefty Waste & Storage | (1)% | 6% | —% | 5% | | Hefty Tableware | 1% | (5)% | —% | (4)% | | Presto Products | —% | 1% | —% | 1% | | **Total RCP** | **1%**| **(1)%** | **1%** | **1%**| Components of Change in Net Revenues (Six Months Ended June 30, 2025 vs. 2024) | Segment | Price | Retail Volume/Mix | Non-Retail | Total | | :------------------------ | :---- | :---------------- | :--------- | :---- | | Reynolds Cooking & Baking | 3% | (4)% | 2% | 1% | | Hefty Waste & Storage | (1)% | 5% | —% | 4% | | Hefty Tableware | 2% | (10)% | —% | (8)% | | Presto Products | 1% | —% | —% | 1% | | **Total RCP** | **1%**| **(2)%** | **1%** | **—%**| [Financial Outlook & Capital Allocation](index=3&type=section&id=Financial%20Outlook%20%26%20Capital%20Allocation) This section presents the company's financial outlook for Q3 and full-year 2025, alongside key balance sheet metrics and dividend information [Full Year 2025 Outlook](index=3&type=section&id=Full%20Year%202025%20Outlook) The company reiterated its full-year 2025 guidance, expecting Net Revenues to be down low single digits, with Adjusted EBITDA between $650 million and $670 million, and Adjusted EPS between $1.54 and $1.61 Full Year 2025 Outlook | Metric | Guidance | | :-------------- | :------------------- | | Net Revenues | Down low single digits | | Adjusted EBITDA | $650M - $670M | | Adjusted EPS | $1.54 - $1.61 | - Expected Adjusted Net Income reflects estimated adjustments including debt refinancing costs and **$25 to $35 million** of pre-tax CEO transition costs and strategic investments[16](index=16&type=chunk) - Full-year 2025 expected Adjusted EBITDA excludes estimated depreciation and amortization of approximately **$130 million**[16](index=16&type=chunk) [Third Quarter 2025 Outlook](index=3&type=section&id=Third%20Quarter%202025%20Outlook) For the third quarter of 2025, Net Revenues are projected to be down low single digits compared to Q3 2024, with Adjusted EBITDA expected in the range of $160 million to $170 million, and Adjusted EPS between $0.37 and $0.41 Third Quarter 2025 Outlook | Metric | Guidance | | :-------------- | :------------------- | | Net Revenues | Down low single digits | | Adjusted EBITDA | $160M - $170M | | Adjusted EPS | $0.37 - $0.41 | [Balance Sheet and Cash Flow Highlights](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Highlights) As of June 30, 2025, the company maintained a healthy balance sheet with Net Debt within its target leverage range, indicating effective management of its debt obligations Balance Sheet Highlights (June 30, 2025) (Amounts in Millions) | Metric | Amount | | :---------------------- | :---------------- | | Cash and cash equivalents | $57 | | Debt | $1,633 | | Net Debt | $1,576 | | Net Debt to TTM Adjusted EBITDA | 2.4x | - Net Debt to Trailing Twelve Months Adjusted EBITDA was **2.4x**, which is within the Company's target leverage range[13](index=13&type=chunk) [Quarterly Dividend](index=3&type=section&id=Quarterly%20Dividend) The Board of Directors approved a quarterly dividend of $0.23 per common share, payable on August 29, 2025, to shareholders of record as of August 15, 2025 - A quarterly dividend of **$0.23 per common share** was approved[17](index=17&type=chunk) - The dividend is expected to be paid on August 29, 2025, to shareholders of record as of August 15, 2025[17](index=17&type=chunk) [Company Overview & Forward-Looking Statements](index=4&type=section&id=Company%20Overview%20%26%20Forward-Looking%20Statements) This section introduces Reynolds Consumer Products' business profile and outlines the nature and limitations of forward-looking statements [About Reynolds Consumer Products Inc.](index=4&type=section&id=About%20Reynolds%20Consumer%20Products%20Inc.) Reynolds Consumer Products is a leading provider of household essentials, offering trusted solutions for cooking, cleanup, and food storage, with a portfolio of iconic brands like Reynolds Wrap® and Hefty® holding No. 1 or No. 2 market share in most categories it serves - Reynolds Consumer Products is a leading provider of household essentials, found in **95% of U.S. homes**[20](index=20&type=chunk) - The portfolio features iconic brands such as Reynolds Wrap® aluminum foil and Hefty® trash bags and disposable tableware[20](index=20&type=chunk) - The Company holds the **No. 1 or No. 2 market share** in most of the categories it serves[20](index=20&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines the nature of forward-looking statements within the press release, emphasizing that they are predictions based on current expectations and subject to risks, uncertainties, and assumptions, cautioning investors against undue reliance, and stating the company undertakes no obligation to update these statements - The press release contains forward-looking statements reflecting views about future performance, identifiable by words like 'believe,' 'expect,' 'will,' and 'outlook'[21](index=21&type=chunk) - These statements are predictions based on current expectations and are subject to important factors that could cause actual results to differ materially[21](index=21&type=chunk) - The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise[22](index=22&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section provides the company's consolidated statements of income, balance sheets, and cash flows, reflecting its financial position and operational results [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statements of income show a decrease in Net Income for both the three and six months ended June 30, 2025, compared to the prior year, primarily driven by higher cost of sales and increased other expenses, despite a slight increase in total net revenues Consolidated Statements of Income (Amounts in Millions, Except Per Share Data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------- | :------ | :------ | :------- | :------- | | Total net revenues | $938 | $930 | $1,756 | $1,764 | | Cost of sales | $(712) | $(674) | $(1,341) | $(1,306) | | Gross profit | $226 | $256 | $415 | $458 | | Selling, general and administrative expenses | $(96) | $(116) | $(201) | $(227) | | Other expense, net | $(12) | — | $(21) | — | | Income from operations | $118 | $140 | $193 | $231 | | Interest expense, net | $(22) | $(25) | $(42) | $(51) | | Debt refinancing expense | — | — | $(13) | — | | Income before income taxes | $96 | $115 | $138 | $180 | | Income tax expense | $(23) | $(18) | $(33) | $(35) | | Net income | $73 | $97 | $105 | $145 | | Diluted EPS | $0.35 | $0.46 | $0.50 | $0.69 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of June 30, 2025, shows a slight decrease in total assets and total liabilities compared to December 31, 2024, with cash and cash equivalents decreasing significantly while inventories increased Consolidated Balance Sheets (Amounts in Millions) | Asset/Liability/Equity | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Cash and cash equivalents | $57 | $137 | | Accounts receivable | $333 | $337 | | Inventories | $630 | $567 | | Total current assets | $1,063 | $1,101 | | Property, plant and equipment, net | $787 | $758 | | Goodwill | $1,895 | $1,895 | | Intangible assets, net | $958 | $972 | | Total assets | $4,861 | $4,873 | | Accounts payable | $393 | $319 | | Total current liabilities | $575 | $539 | | Long-term debt | $1,617 | $1,686 | | Total liabilities | $2,713 | $2,731 | | Total stockholders' equity | $2,148 | $2,142 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities decreased compared to the prior year, cash used in investing activities increased primarily due to higher acquisition of property, plant, and equipment, and financing activities saw significant proceeds and repayments related to term loan refinancing Consolidated Statements of Cash Flows (Amounts in Millions) | Cash Flow Activity | YTD 2025 | YTD 2024 | | :----------------------------- | :------- | :------- | | Net income | $105 | $145 | | Depreciation and amortization | $65 | $63 | | Inventories (change) | $(63) | $(60) | | Accounts payable (change) | $49 | $92 | | Net cash provided by operating activities | $147 | $183 | | Acquisition of property, plant and equipment | $(79) | $(48) | | Net cash used in investing activities | $(79) | $(48) | | Repayment of long-term debt | $(54) | $(50) | | Dividends paid | $(96) | $(96) | | Proceeds from term loan refinancing | $743 | — | | Repayments of existing term loan | $(743) | — | | Net cash used in financing activities | $(148) | $(149) | | Net decrease in cash and cash equivalents | $(80) | $(14) | | Cash and cash equivalents at end of period | $57 | $101 | [Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA and Net Debt, to their GAAP equivalents for enhanced financial analysis [Use of Non-GAAP Financial Measures](index=9&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company utilizes several non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Net Debt, and Net Debt to Trailing Twelve Months Adjusted EBITDA, to provide additional insights into its operating performance, liquidity, and debt servicing capabilities, excluding certain non-recurring or non-operational items - Adjusted EBITDA is defined as net income plus income tax expense, net interest expense, debt refinancing expense, depreciation and amortization, costs to execute strategic initiatives, and CEO transition costs[36](index=36&type=chunk) - Adjusted Net Income and Adjusted EPS exclude the after-tax impact of debt refinancing expense, strategic initiative costs, and CEO transition costs[36](index=36&type=chunk) - These non-GAAP measures are used by management to evaluate operating performance, generate future plans, and make strategic decisions, providing useful information to investors[37](index=37&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) This section provides a reconciliation of GAAP Net Income to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024, detailing the adjustments made for income tax, interest, depreciation, and specific non-recurring costs Reconciliation of Net Income to Adjusted EBITDA (Amounts in Millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------- | :------ | :------ | :------- | :------- | | Net income – GAAP | $73 | $97 | $105 | $145 | | Income tax expense | $23 | $18 | $33 | $35 | | Interest expense, net | $22 | $25 | $42 | $51 | | Debt refinancing expense | — | — | $13 | — | | Depreciation and amortization | $33 | $32 | $65 | $63 | | Costs to execute strategic initiatives | $8 | — | $13 | — | | CEO transition costs | $4 | — | $8 | — | | **Adjusted EBITDA (Non-GAAP)** | **$163**| **$172**| **$279** | **$294** | [Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20and%20EPS%20to%20Adjusted%20Net%20Income%20and%20Adjusted%20EPS) This section reconciles GAAP Net Income and EPS to their adjusted non-GAAP counterparts for the three and six months ended June 30, 2025 and 2024, by accounting for the after-tax impact of debt refinancing, strategic initiatives, and CEO transition costs Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS (Q2 2025 vs. Q2 2024) (Amounts in Millions, Except Per Share Data) | Metric (Q2) | Net Income | Shares | Diluted EPS | | :--------------------------- | :--------- | :----- | :---------- | | As Reported - GAAP (2025) | $73 | 210.3 | $0.35 | | Adjustments (2025) | $10 | — | $0.05 | | **Adjusted (Non-GAAP) (2025)** | **$83** | **210.3**| **$0.39** | | As Reported - GAAP (2024) | $97 | 210.2 | $0.46 | | Adjustments (2024) | — | — | — | | **Adjusted (Non-GAAP) (2024)** | **$97** | **210.2**| **$0.46** | Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS (YTD 2025 vs. YTD 2024) (Amounts in Millions, Except Per Share Data) | Metric (YTD) | Net Income | Shares | Diluted EPS | | :--------------------------- | :--------- | :----- | :---------- | | As Reported - GAAP (2025) | $105 | 210.3 | $0.50 | | Adjustments (2025) | $27 | — | $0.13 | | **Adjusted (Non-GAAP) (2025)** | **$132** | **210.3**| **$0.63** | | As Reported - GAAP (2024) | $145 | 210.2 | $0.69 | | Adjustments (2024) | — | — | — | | **Adjusted (Non-GAAP) (2024)** | **$145** | **210.2**| **$0.69** | [Reconciliation of Trailing Twelve Months Net Income to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Trailing%20Twelve%20Months%20Net%20Income%20to%20Adjusted%20EBITDA) This section provides the reconciliation of Trailing Twelve Months (TTM) GAAP Net Income to TTM Adjusted EBITDA as of June 30, 2025, and December 31, 2024, showing the adjustments for non-operating and non-recurring items Reconciliation of TTM Net Income to TTM Adjusted EBITDA (Amounts in Millions) | Metric | TTM Ended June 30, 2025 | TTM Ended Dec 31, 2024 | | :------------------------- | :---------------------- | :--------------------- | | Net income – GAAP | $312 | $352 | | Income tax expense | $97 | $99 | | Interest expense, net | $90 | $98 | | Debt refinancing expense | $13 | — | | Depreciation and amortization | $131 | $129 | | Costs to execute strategic initiatives | $13 | — | | CEO transition costs | $8 | — | | **Adjusted EBITDA (Non-GAAP)** | **$664** | **$678** | [Reconciliation of Total Debt to Net Debt and Net Debt to TTM Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Total%20Debt%20to%20Net%20Debt%20and%20Net%20Debt%20to%20TTM%20Adjusted%20EBITDA) This section details the calculation of Net Debt from Total Debt and its ratio to Trailing Twelve Months Adjusted EBITDA, providing a key indicator of the company's leverage and financial health as of June 30, 2025, and December 31, 2024 Reconciliation of Total Debt to Net Debt and Net Debt to TTM Adjusted EBITDA (Amounts in Millions) | Metric | As of June 30, 2025 | As of Dec 31, 2024 | | :----------------------------------- | :------------------ | :----------------- | | Current portion of long-term debt | $16 | — | | Long-term debt | $1,617 | $1,686 | | Total debt | $1,633 | $1,686 | | Cash and cash equivalents | $(57) | $(137) | | **Net debt (Non-GAAP)** | **$1,576** | **$1,549** | | TTM Adjusted EBITDA (Non-GAAP) | $664 | $678 | | **Net Debt to TTM Adjusted EBITDA** | **2.4x** | **2.3x** |
These Analysts Cut Their Forecasts On Reynolds Consumer Products Following Q1 Results
Benzinga· 2025-05-01 17:54
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]
Reynolds Consumer Products (REYN) Q1 Earnings: Taking a Look at Key Metrics Versus Estimates
ZACKS· 2025-04-30 14:35
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]
Reynolds Consumer Products (REYN) Matches Q1 Earnings Estimates
ZACKS· 2025-04-30 13:26
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]
Reynolds Consumer Products(REYN) - 2025 Q1 - Quarterly Report
2025-04-30 13:15
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].
Reynolds Consumer Products(REYN) - 2025 Q1 - Earnings Call Transcript
2025-04-30 12:00
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]
Reynolds Consumer Products(REYN) - 2025 Q1 - Earnings Call Transcript
2025-04-30 12:00
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]