Reynolds started the year with results that met Wall Street’s expectations, but the market responded negatively due to underlying volume declines and macro uncertainty. Management highlighted that retailer destocking weighed on sales, especially in its core retail channels, and that this impact is likely to persist for the remainder of the year. CEO Scott Huckins noted, “We delivered our earnings guide in spite of unanticipated retailer destocking in a very dynamic macro environment.” Additionally, the company gained share in key categories such as household foil, waste bags, and food bags, driven by innovation and distribution wins without increased promotional activity.
Is now the time to buy REYN? Find out in our full research report (it’s free).
Reynolds (REYN) Q1 CY2025 Highlights:
- Revenue: $818 million vs analyst estimates of $820.3 million (1.8% year-on-year decline, in line)
- Adjusted EPS: $0.23 vs analyst estimates of $0.23 (in line)
- Adjusted EBITDA: $117 million vs analyst estimates of $119.7 million (14.3% margin, 2.3% miss)
- Revenue Guidance for Q2 CY2025 is $897.5 million at the midpoint, below analyst estimates of $918.1 million
- Management lowered its full-year Adjusted EPS guidance to $1.58 at the midpoint, a 4.3% decrease
- EBITDA guidance for the full year is $660 million at the midpoint, below analyst estimates of $666.2 million
- Operating Margin: 9.3%, down from 10.8% in the same quarter last year
- Organic Revenue fell 2% year on year (-5% in the same quarter last year)
- Sales Volumes fell 4% year on year (-3% in the same quarter last year)
- Market Capitalization: $4.54 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Reynolds’s Q1 Earnings Call
- Kaumil Gajrawala (Jefferies) asked if retailer destocking is a temporary or permanent shift; CEO Scott Huckins replied it is assumed to be permanent for the full year.
- Peter Grom (UBS) inquired about the phasing and magnitude of cost headwinds from tariffs; CFO Nathan Lowe explained most costs flow through in two to six months, with pricing actions designed to offset these impacts.
- Lauren Lieberman (Barclays) questioned the specific sources of tariff pressure; Lowe clarified that about half comes from higher commodity costs (notably aluminum), with the rest from direct tariffs on imported goods and packaging.
- Andrea Teixeira (JPMorgan) probed the interplay between lower EBITDA guidance, volume assumptions, and promotional support; Lowe indicated reduced EBITDA is linked to lower volume expectations, while price increases are meant to neutralize tariff impacts.
- Brian McNamara (Canaccord Genuity) asked about the timing of price realization and private label market share; Huckins said private label share was stable and pricing changes typically take two to six months to reach shelves.
Catalysts in Upcoming Quarters
In the months ahead, our analysts will track (1) the pace and effectiveness of Reynolds’ pricing increases to offset tariff-driven cost inflation, (2) evidence of stabilization or improvement in retail volumes amid ongoing destocking, and (3) the impact of new product launches and automation investments on category share and margins. The evolution of consumer demand and retailer inventory strategies will also be key indicators for the rest of the year.
Reynolds currently trades at $21.60, down from $23.71 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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