Reynolds reported third quarter results that surpassed Wall Street’s expectations, with management crediting broad-based market share gains and execution on cost discipline as key drivers. CEO Scott Huckins highlighted that retail share increased across multiple product lines, including Hefty Waste Bags and Reynolds Wrap, which benefited from improved pricing and a narrower price gap versus store brands. Management also pointed to advancements in manufacturing productivity and supply chain efficiency, noting, “We are operating with increased agility, outperforming our categories and driving improved financial results.”
Is now the time to buy REYN? Find out in our full research report (it’s free for active Edge members).
Reynolds (REYN) Q3 CY2025 Highlights:
- Revenue: $931 million vs analyst estimates of $900.8 million (2.3% year-on-year growth, 3.4% beat)
- Adjusted EPS: $0.42 vs analyst estimates of $0.39 (6.8% beat)
- Adjusted EBITDA: $168 million vs analyst estimates of $165 million (18% margin, 1.8% beat)
- Revenue Guidance for Q4 CY2025 is $1.05 billion at the midpoint, above analyst estimates of $989.7 million
- Management raised its full-year Adjusted EPS guidance to $1.62 at the midpoint, a 2.9% increase
- EBITDA guidance for the full year is $660 million at the midpoint, above analyst estimates of $653.5 million
- Operating Margin: 13.2%, down from 15.2% in the same quarter last year
- Organic Revenue rose 2% year on year vs analyst estimates of 1.1% declines (308.7 basis point beat)
- Sales Volumes fell 2% year on year (0% in the same quarter last year)
- Market Capitalization: $5.17 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 From Reynolds’s Q3 Earnings Call
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Robert Ottenstein (Evercore ISI) asked about holiday season promotional intensity and consumer affordability. CEO Scott Huckins explained that promotional activity is steady with pre-pandemic levels, and the company is prepared to serve both value-focused and brand-loyal consumers.
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Kaumil Gajrawala (Jefferies) inquired about the strategic impact of new leadership hires. Huckins stated that the addition of a Chief Commercial Officer and Chief Operations Officer directly supports innovation, revenue management, and cost reduction initiatives.
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Lauren Lieberman (Barclays) questioned the outlook for the tableware business amid volume declines. Huckins clarified that foam headwinds drove most of the decline but expressed confidence that these headwinds would lessen next year, with profitability improving despite lower volumes.
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Andrea Teixeira (JPMorgan Chase) sought detail on promotional strategy and distribution gains for Hefty. Huckins emphasized that innovation and high supply chain fill rates drive growth more than promotion, with scented waste bags and private label offerings both performing well.
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Peter Grom (UBS) asked if the effectiveness of promotions has changed. Huckins said that Reynolds is focused on optimizing promotional spend through revenue growth management tools but has not seen a structural change in trade effectiveness.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be closely monitoring (1) the pace and sustainability of retail share gains in Reynolds’ core categories, (2) the impact of automation and lean initiatives on margins and cost structure, and (3) how successfully the management team navigates retailer dynamics and private label bidding amid inflation and tariffs. Execution on new product launches and the ability to manage input cost volatility will also be important signposts for ongoing performance.
Reynolds currently trades at $24.64, up from $23.72 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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