Reynolds (REYN) Q2 Revenue Tops 0.9%

Key Points

• GAAP revenue of $938 million for Q2 2025 surpassed analyst expectations, Revenue of $938 million increased approximately 0.9% year over year, surpassing analyst expectations.

• Non-GAAP earnings per share were $0.39 for Q2 2025, beating consensus estimates (EPS non-GAAP, revenue GAAP) Non-GAAP earnings per share were $0.39, beating consensus estimates but down 15.2% compared to Q2 2024.

• Gross margins declined and net income dropped, pressured by higher input costs and CEO transition costs.

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Reynolds Consumer Products (NASDAQ:REYN), the company behind brands like Reynolds Wrap aluminum foil and Hefty trash bags, reported its quarterly earnings for the period ended June 30, 2025, on July 30, 2025. The company posted GAAP revenue of $938 million for Q2 2025, ahead of analyst expectations of $902.8 million, marking a modest year-over-year increase. Adjusted earnings per share reached $0.39, just above the $0.38 estimate, though lower than last year’s $0.46 result. The results slightly outperformed Wall Street expectations despite ongoing pressures from rising input costs, lower retail volumes, and CEO transition-related expenses. Overall, the quarter showed stable topline performance but highlighted profit margin challenges, with management reaffirming its full-year outlook.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Key Business Drivers

Reynolds Consumer Products is a household consumer goods company specializing in food storage, cooking, waste management, and tableware products. Its top brands, including Reynolds and Hefty, are found in 95 % of U.S. homes and hold leading market shares in categories such as aluminum foil, trash bags, and food storage bags.

The company’s recent focus has centered on maintaining category leadership, driving product innovation, and investing in sustainability. Strong retail partnerships, wide U.S. distribution, and a diverse product portfolio are key factors supporting its position. With shifts toward sustainability and value, the introduction of new products like compostable cutlery and recycled foil have complemented these growth strategies.

Quarterly Performance: Highlights and Segment Results

The company’s GAAP revenue rose less than 1% in Q2 2025, as a gain in non-retail revenue offset flat retail net revenue. Retail volume declined 1%, reflecting softer demand in certain categories. Gross profit (GAAP) fell to $226 million from $256 million. This contraction was due mainly to higher input costs—especially from tariffs and commodities like aluminum—and a lag in passing pricing through to customers.

Adjusted EBITDA, a non-GAAP measure of core operating profit that excludes non-recurring items, slid by 5.2% compared to Q2 2024. Net income (GAAP) dropped by nearly 25% to $73 million compared to Q2 2024, impacted by $10 million in after-tax CEO transition costs and ongoing strategic investments. The company trimmed selling, general, and administrative expenses by $20 million compared to Q2 2024, but these savings did not offset margin pressures elsewhere in the business.

Segment-level details reveal diverging trends. The Cooking & Baking unit—which sells aluminum foil and oven bags—grew revenue by $4 million, but saw a $5 million decline in adjusted EBITDA, mainly from weaker retail volume and timing of price increases. Hefty Waste & Storage—known for trash bags and storage solutions—achieved an $11 million rise in GAAP net revenues with retail volume up 6%, although adjusted EBITDA (non-GAAP) stayed flat as new product investments increased operational costs. The Hefty Tableware segment posted a $9 million sales decline; its performance was weighed down by a 5% drop in retail volume attributable to lower foam tableware sales. Meanwhile, Presto Products—maker of store brand food bags and related items—grew sales by $2 million, though profit fell as the group absorbed higher costs linked to expanding distribution.

Product launches remained a theme. Hefty Fabuloso scented trash bags, Hefty Press to Close food bags, and new compostable cutlery joined the assortment, reflecting ongoing investment in innovation and sustainability. Management continues to view U.S.-centric operations and diverse retail channels as advantages, even as omni-channel and club store sales grow in importance. There were no significant regulatory or supply chain disruptions, but tariffs remain a notable cost headwind. The company also realigned its international operations to better match domestic product categories, aiming to support future growth opportunities.

The company maintained its quarterly dividend at $0.23 per share, unchanged from the prior year, continuing a steady payout to shareholders.

Looking Ahead: Guidance and Priorities

Management reiterated its full-year 2025 guidance, expecting net revenues to decline by low single digits compared to FY2024, with adjusted EBITDA (non-GAAP) projected between $650 million and $670 million and adjusted EPS between $1.54 and $1.61. For the next quarter, net revenues are forecast to be down slightly relative to Q3 of the prior year, with adjusted EBITDA (non-GAAP) anticipated in the $160 million to $170 million range and adjusted EPS forecast between $0.37 and $0.41. These projections include up to $35 million pre-tax for CEO transition and strategic costs.

The leadership team stated it is “on track to begin realizing those benefits late this year,” according to the earnings release, and expects future productivity and innovation programs to support improved profitability. Investors should monitor the recovery of gross margins, the impact of cost-saving measures, volume trends in core and declining categories, as well as the effects of new product launches on category share and pricing power. Margin recovery will depend on how quickly price increases flow through and whether operational investments yield the expected returns. The dividend was held steady for the quarter at $0.23 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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