Cinemark (NYSE:CNK) Q4 2025 Earnings call February 18, 2026 08:30 AM ET Company ParticipantsChanda Brashears - SVP of Investor RelationsDrew Crum - Managing DirectorEric Wold - Executive Director of Equity ResearchMelissa Thomas - CFOMike Hickey - Managing Director and Tax DirectorOmar Mejias - VP of Equity ResearchSean Gamble - President and CEOStephen Laszczyk - VPConference Call ParticipantsChad Beynon - Managing Director and Senior AnalystDavid Karnovsky - Senior Research AnalystEric Handler - Managing ...

Core Insights - Monster Beverage Corporation (MNST) is utilizing disciplined pricing strategies and supply chain efficiencies to maintain margins despite rising input costs, with gross margin increasing to 55.7% from 53.2% year-over-year in Q3 2025 [1][9]. Pricing Strategy - The company has implemented U.S. pricing changes effective November 1, 2025, which include frontline price increases and reduced promotional allowances by package and channel to manage rising input costs [3]. - Monster Beverage's pricing strategy is characterized by a disciplined revenue growth management framework that considers consumer purchasing patterns, brand strength, channel dynamics, and packaging mix, aiming to optimize revenue while sustaining demand [4]. Cost Pressures - Management has acknowledged ongoing cost pressures, particularly from higher aluminum costs due to tariff-related increases, which are expected to continue affecting the company into Q4 2025 and early 2026 [2]. Market Performance - Over the past six months, MNST shares have increased by 38.8%, significantly outperforming the industry growth of 11.9% [6]. - The Zacks Consensus Estimate indicates a year-over-year earnings growth of 22.8% for the current year and 15.2% for the next year [10]. Valuation - MNST currently trades at a forward price-to-earnings ratio of 33.86X, which is higher than the industry average of 18.20X [8].

Financial Data and Key Metrics Changes - The company achieved a record-breaking top-line growth with a 32% increase in diluted earnings per share for the quarter, driven by strategic initiatives [2] - Net sales for the second quarter of fiscal 2026 increased by 4.6% to $314.8 million, compared to $301.1 million in the same quarter of fiscal 2025 [9] - Gross profit increased by $6.9 million, or 13.2%, to $59.2 million, with gross profit margin rising to 18.8% of net sales from 17.4% in the prior year [11][12] - Net income for the second quarter was $18 million, or $1.53 per diluted share, compared to $13.6 million, or $1.16 per diluted share for the same quarter last year [13] Business Line Data and Key Metrics Changes - The weighted average sales price per pound increased by 15.8%, while sales volume decreased by 9.7% [9] - Sales volume in the consumer distribution channel decreased by 8.4%, primarily due to a 7.9% decline in private brand sales [10] - The contract manufacturing channel saw a significant decline of 26.5% in sales volume, attributed to reduced granola volume processed [11] Market Data and Key Metrics Changes - The snack nut and trail mix category was down 4% in pounds but up 3% in dollars, indicating a price increase of 8% for snack nuts [21] - The recipe nut category experienced a 2% increase in pounds and a 14% increase in dollars, driven by seasonal demand and higher prices [23] - The bar category grew by 6% in pounds and dollars, indicating a rebound in the market [24] Company Strategy and Development Direction - The company is focused on accelerating its snack and energy bar business, particularly in the protein-forward segment [4] - Strategic investments are being made to enhance operational efficiency and expand production capacity [4] - The long-range plan emphasizes growth in private brand business and innovation in product offerings [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from shifting consumer behavior and elevated retail prices impacting overall sales volume [3] - There is cautious optimism for the second half of fiscal 2026, driven by recent commercial momentum and new business secured with important customers [25] - The company remains committed to navigating challenges in the economic environment while focusing on long-term shareholder value [25] Other Important Information - A special dividend of $1 per share was distributed, reflecting the company's strong financial position [4] - The total value of inventories increased by 14.4% year-over-year, primarily due to higher commodity acquisition costs [14][15] Q&A Session Questions and Answers Question: Where do you stand on the equipment delivery and quality assurance? - The company confirmed that 85% of the new equipment is on-site or in transit, with installation and production expected to begin in July 2026 [30][31] Question: How quickly can pricing adjustments be passed through to retailers? - The company typically undergoes a 6-month price review with retailers, followed by a 60-90 day timeline to implement price changes [33]

Financial Data and Key Metrics Changes - The company achieved a record-breaking top-line growth with a 32% increase in diluted earnings per share for the quarter, driven by strategic initiatives [2] - Net sales for the second quarter of fiscal 2026 increased by 4.6% to $314.8 million, compared to $301.1 million in the second quarter of fiscal 2025 [9] - Gross profit increased by $6.9 million, or 13.2%, to $59.2 million, with gross profit margin rising to 18.8% of net sales from 17.4% in the prior year [11][12] - Net income for the second quarter of fiscal 2026 was $18 million, or $1.53 per diluted share, compared to $13.6 million, or $1.16 per diluted share for the same quarter last year [13] Business Line Data and Key Metrics Changes - The consumer distribution channel saw an 8.4% decline in sales volume, primarily due to a 7.9% decline in private brand sales [10] - Sales volume in the contract manufacturing channel decreased by 26.5%, attributed to reduced granola volume processed [11] - The recipe nut category experienced a 2% increase in pounds and a 14% increase in dollars, driven by seasonal impacts and higher prices [23] Market Data and Key Metrics Changes - The snack nut and trail mix category was down 4% in pounds but up 3% in dollars, with snack nut prices rising by 8% [21] - The Orchard Valley Harvest brand saw a 42% decline in pound shipments due to lost distribution at a national specialty retailer [22] - The bar category grew by 6% in pounds and dollars, driven by branded player growth, while private label bar shipments were down 12% [24] Company Strategy and Development Direction - The company is focused on accelerating its snack and energy bar business, particularly in the protein-forward segment [4] - Strategic investments are being made to enhance operational efficiency and expand production capacity [4] - The long-range plan emphasizes growth in private brand business and innovation in product offerings [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from shifting consumer behavior and elevated retail prices impacting overall sales volume [3] - There is cautious optimism for the second half of fiscal 2026, driven by recent commercial momentum and new business secured with important customers [25] - The company remains committed to creating long-term shareholder value through strategic initiatives and operational excellence [25] Other Important Information - A special dividend of $1 per share was distributed, reflecting the company's strong financial position [4] - The total value of inventories increased by 14.4% year-over-year, primarily due to higher commodity acquisition costs [14][15] Q&A Session Questions and Answers Question: Where do you stand on the equipment delivery and quality assurance? - The company confirmed that 85% of the new equipment is on-site or in transit, with installation and production expected to begin in July 2026 [30][31] Question: How quickly can pricing adjustments be passed through due to higher nut costs? - The company typically has a 6-month price review cycle with a 60-90 day timeline to implement price changes [33]

Core Insights - Acuity Brands, Inc. reported strong financial performance in its first-quarter fiscal 2026, with earnings per share (EPS) of $4.69, surpassing expectations of $4.45 [1][6] Financial Performance - The company generated revenue of approximately $1.1 billion, slightly below the estimated $1.144 billion, but achieved a 20% increase in net sales compared to the previous year [2][6] - Operating profit rose to $160 million, a 20% increase, while adjusted operating profit grew by 24% to reach $196 million, reflecting effective cost controls and productivity improvements [3][6] Market Valuation - Acuity's price-to-earnings (P/E) ratio is approximately 28.61, with a price-to-sales ratio of about 2.61, indicating market confidence in its earnings and revenue potential [4] - The enterprise value to sales ratio is around 2.71, and the enterprise value to operating cash flow ratio is approximately 19.61 [4] Financial Health - The company's debt-to-equity ratio is approximately 0.33, suggesting a moderate level of debt relative to equity [5] - A current ratio of about 1.95 indicates Acuity's ability to cover its short-term liabilities with its short-term assets, highlighting a solid financial position [5]

Industry Overview - The Zacks Metal Products - Procurement and Fabrication industry is experiencing strong demand across various end markets, with improvements in order levels and strategic pricing expected to help maintain margins despite tariff impacts [1][2][4] - The industry primarily includes metal processing and fabrication service providers that transform metal into parts and components used in sectors such as construction, aerospace, automotive, and more [3] Current Trends - The Institute for Supply Management's manufacturing index showed a slight increase to 49.1% in September from 48.7% in August, indicating a potential recovery in the industry [4] - The Production Index registered 50.3%, reflecting growth in fabricated metal products, while new orders showed renewed demand momentum despite overall contraction in the New Orders Index [4] Strategic Initiatives - Companies are implementing strategic pricing adjustments, cost-reduction initiatives, and productivity enhancements to tackle rising labor, freight, and fuel costs [5] - Diversification of supplier bases and modifications to supply chains are also being pursued to mitigate tariff impacts [5] Growth Catalysts - Emphasis on automation and cost-effective technical solutions is positioning the industry for future growth, with expected demand increases in manufacturing, aerospace, and automotive sectors [6] - Rapid industrialization in developing economies presents additional long-term growth opportunities [6] Industry Performance - The Zacks Metal Products - Procurement and Fabrication industry ranks 19, placing it in the top 8% of 243 Zacks industries, indicating positive near-term prospects [7] - Over the past year, the industry has grown 15.4%, lagging behind the sector's 20.5% rise but outperforming the Zacks S&P 500 composite's 3.5% increase [10] Valuation Metrics - The industry is currently trading at a trailing 12-month EV/EBITDA ratio of 17.38X, compared to the S&P 500's 17.93X and the Industrial Products sector's 19.57X [13] Company Highlights - **Century Aluminum (CENX)**: Investing $50 million to restart over 50,000MT of idled production, expected to boost U.S. aluminum production by nearly 10% [19] - **Ardagh Metal Packaging (AMBP)**: Anticipating 3% growth in shipments and has raised its adjusted EBITDA guidance for 2025 to $720-$735 million [24] - **TriMas Corporation (TRS)**: Forecasting consolidated sales growth at the higher end of the 8-10% range for full-year 2025, driven by strong demand in its packaging segment [28] - **GrafTech International (EAF)**: Sales volume rose 9% year-over-year, with a strong focus on the U.S. market and an expected 8-10% increase in sales volume for 2025 [32]

Financial Data and Key Metrics Changes - Revenue increased by 7% year over year, exceeding $1.1 billion [3][4] - Adjusted EPS was $0.85, surpassing the high end of the projected range by $0.10 [3] - Adjusted EBITDA totaled $225 million, with $215 million excluding oil and gas rights, marking a 19% year-over-year improvement [14][3] - Adjusted EBITDA margin exceeded 20%, the highest since the pandemic [3][4] - Cash generated from operations year to date reached $299 million, a $273 million improvement from last year [4][14] Business Line Data and Key Metrics Changes - High Performance Materials & Components (HPMC) segment margins were above 24%, while Advanced Alloys & Solutions (AANS) segment margins were above 17% [4][15] - Aerospace and Defense (A&D) revenue rose 21% year over year, accounting for 70% of total revenue [5][6] - Jet engine revenue, which constitutes 39% of total revenue, grew 19% year over year [6][8] - Airframe sales increased by 9% year over year, supported by Boeing and Airbus production ramps [7][8] - Defense revenue surged 51% year over year, reflecting broad-based strength across various defense programs [9][10] Market Data and Key Metrics Changes - Jet engine growth is expected to exceed 20% for the full year, with Q4 growth anticipated in the high single to low double digits [6][8] - Airframe revenues are expected to finish modestly above 2024 levels, with high single-digit growth anticipated next year [8] - Defense markets are projected to continue record performance due to modernization and replenishment programs [10][12] Company Strategy and Development Direction - The company is focused on high-value materials and markets, with 70% of revenue now coming from aerospace and defense [12][20] - Strategic pricing and mix optimization are key levers for growth, with long-term agreements supporting future investments [20][21] - Operational excellence and productivity improvements are driving margin expansion and cash generation [21][22] - The company is committed to disciplined capital deployment, prioritizing high-return investments [13][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand in core markets, particularly aerospace and defense [5][20] - The outlook for Q4 and 2026 remains positive, with expectations of sustained growth in A&D [27][60] - The company is well-positioned to capitalize on long-term growth opportunities, supported by strong customer relationships and proprietary materials [12][20] Other Important Information - The company plans to continue monetizing non-core assets while maintaining disciplined capital investments [15][18] - The CFO, Don Newman, is set to retire after Q4, with a search for his successor underway [19] Q&A Session Summary Question: What has changed since Q2 to drive the revised outlook and guidance increase? - Management noted stronger than expected A&D performance, particularly in defense, contributing to the guidance increase [26][27] Question: What is being done to manage melt capacity for nickel alloys? - The company is focusing on productivity, reliability, and selective expansion of melt capacity to meet growing demand [29][30] Question: What does being the number one source of flat rolled titanium products to Airbus mean for the P&L? - This status translates to increased revenue and higher margins from premium titanium products, with a significant revenue increase expected next year [34][35] Question: What is the expected growth in airframe sales for 2026? - Airframe sales are anticipated to grow at a high single-digit rate, with continued strength in jet engine demand expected [60] Question: How is the company managing working capital improvements? - Improvements in accounts receivable management and inventory efficiencies have contributed to better working capital performance [52][53]

Financial Data and Key Metrics Changes - Revenue increased by 7% year over year, exceeding $1.1 billion [3][4] - Adjusted EPS was $0.85, $0.10 above the high end of the projected range [3] - Adjusted EBITDA totaled $225 million, with $215 million excluding oil and gas rights, exceeding guidance by $5 million [4][14] - Adjusted EBITDA margin exceeded 20%, the highest since the pandemic [3][4] - Cash generated from operations year to date reached $299 million, a $273 million improvement from last year [4][15] Business Line Data and Key Metrics Changes - High Performance Materials & Components (HPMC) segment margins were above 24% [4][15] - Advanced Alloys & Solutions (AANS) segment margins improved to 17.3% [15] - Aerospace and Defense (A&D) revenue rose 21% year over year, now accounting for 70% of total revenue [5][11] - Jet engine revenue grew 19% year over year, representing 39% of total revenue [5][6] - Airframe sales grew 9% year over year, supported by Boeing and Airbus production ramps [6][7] - Defense revenue increased 51% year over year, reflecting broad-based strength across various programs [8][9] Market Data and Key Metrics Changes - Jet engine MRO represented about 50% of total engine sales, indicating strong aftermarket demand [5][39] - Boeing's production rate increased to 42 per month for the 737, and Airbus targets 75 per month by 2027 [7] - Defense markets are expected to continue strong growth, with three consecutive years of double-digit growth [9][11] Company Strategy and Development Direction - Company strategy focuses on differentiated, high-value materials, with 70% of revenue from aerospace and defense [11][20] - Investments in nickel and titanium capacity are aimed at expanding competitive advantages without negatively impacting pricing [12][20] - Operational excellence and disciplined execution are emphasized to drive productivity and margin expansion [9][21] Management's Comments on Operating Environment and Future Outlook - Management expects strong demand in core markets, particularly in aerospace and defense, to continue through 2026 [5][28] - The company is well-positioned for continued share gains and profitable growth through the aerospace cycle [6][11] - Management highlighted the importance of long-term agreements and customer partnerships in supporting growth [11][20] Other Important Information - The company plans to raise full-year guidance for adjusted EBITDA to between $848 million and $858 million [4][16] - Cash generated from sales of non-core assets totaled approximately $30 million year to date [17] - The CFO is set to retire after the fourth quarter, with a search for a successor underway [19] Q&A Session Summary Question: What changed since Q2 to drive the revised outlook and guidance increase? - Management noted stronger than expected A&D performance, particularly in defense, contributing to the guidance increase [26][27] Question: What are you doing to manage melt capacity? - The company is focusing on productivity, reliability, and higher melt yields to meet record demand for premium nickel alloys [29][30] Question: What is the status of the zirconium supply chain? - The supply chain for zirconium products remains stable, with stockpiles built to manage potential disruptions [63][65] Question: How do you anticipate growth in the specialty energy market? - Growth is expected to accelerate in the specialty energy market, particularly in gas turbine and nuclear applications [82][84]

Financial Data and Key Metrics Changes - Sales increased by 3% to $161.8 million compared to $157 million last year, with adjusted operating profit more than doubling to $7 million from $2.6 million despite a $2.2 million impact from U.S. tariff expenses [5][17] - Gross profit margin was 54.1% compared to 54.3% in the same quarter last year, primarily affected by increased tariffs and unfavorable foreign exchange [18][19] - Net income for the quarter was $5.3 million or $0.23 per diluted share, up from $3.5 million or $0.15 per diluted share in the prior year [20] Business Line Data and Key Metrics Changes - The company's owned brands experienced a 5.6% sales decline, while licensed brands grew by 6.5% on a constant currency basis or 9.5% on a reported basis [7][12] - The Movado brand saw a return to growth in wholesale distribution, with a 6% growth in its own e-commerce site [10] - The outlet stores segment grew by 2.4% for the quarter, indicating positive trends in that channel [9] Market Data and Key Metrics Changes - U.S. net sales declined by 1.6%, while international net sales increased by 6.9% or 3.9% on a constant currency basis, with strong performances in Europe, Latin America, and India [8][18] - The Middle East market is currently being rebuilt, which has impacted overall performance [8] Company Strategy and Development Direction - The company is focused on returning to growth and profitability, expecting approximately $10 million in annualized savings from actions taken to reduce operating expenses [6][7] - New product launches and marketing campaigns are planned for the second half of the year, targeting both women's and men's watch categories [11][14] - The company is closely monitoring the tariff situation and developing mitigation plans while maintaining a strong balance sheet with over $180 million in cash and no debt [6][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resurgence in the fashion watch market and the potential for growth in the mini and micro watch categories, particularly among younger consumers [27][28] - The company is not providing a fiscal 2026 outlook due to ongoing uncertainties around tariffs and the broader retail environment [25] Other Important Information - The company has built a strong inventory position of Swiss-made watches in the U.S. to mitigate tariff impacts [6][24] - Capital expenditures for the first six months were $2.8 million, and approximately 100,000 shares were repurchased under the share repurchase program [24] Q&A Session Summary Question: Insights on consumer habits regarding mini watches - Management noted a trend of smaller watches gaining popularity again, particularly among young women, driven by social media and layering with jewelry [27][28] Question: Performance during Prime Day - The company observed strong performance in its digital business during Prime Day, particularly in Europe, indicating a positive trend across its brand portfolio [29] Question: Inventory increase due to tariffs - Management explained that inventory was rebuilt after being low at year-end, with expectations to align inventory levels by year-end while managing tariff impacts [30][33] Question: Future of restructuring charges - Management indicated that restructuring charges are predominantly done, with expectations for a significant reduction in future expenses [36]

Core Insights - Kraft Heinz Company is redefining the consumer goods space through a blend of tech-driven efficiency, product innovations, sustainable packaging, and a focused growth strategy [1] - The company is leveraging strategic pricing actions to boost performance, with a 0.7 percentage point increase in pricing year over year during Q2 2025, primarily driven by price increases in coffee [2] - Kraft Heinz's innovation strategy focuses on delivering high-quality, convenient solutions that meet evolving consumer needs, emphasizing family-friendly meals that can be prepared quickly [3][5] Product Innovation - The company is enhancing core products with globally inspired flavors, focusing on popular items like Mac & Cheese, Lunchables, and Mayo [4][11] - Kraft Heinz is pursuing a multi-pronged growth strategy centered on innovation and relevance, renovating its core portfolio while introducing bold flavors to appeal to modern tastes [5] Financial Performance - Kraft Heinz shares have decreased by 0.7% over the past three months, compared to a 3.4% dip in the industry [8] - The company trades at a forward price-to-earnings ratio of 10.52X, significantly lower than the industry average of 15.67X [9] - The Zacks Consensus Estimate for KHC's 2025 EPS indicates a year-over-year decline of 15.7%, while the estimate for 2026 shows growth of 2.9% [12]