Reynolds closed the fourth quarter with sales and profitability measures that broadly met Wall Street’s expectations. Management credited category share gains in core product lines like waste bags, foil, and food storage bags, as well as successful innovation—such as new scents and eco-friendly products—for driving performance despite flat sales volumes. President and CEO Scott Huckins highlighted, “Our strong fourth quarter performance was underpinned by share gains across the overwhelming majority of our categories, including our six largest core categories.” Reynolds also benefited from improved supply chain efficiency and disciplined cost management, which allowed the company to maintain profitability in a challenging retail environment characterized by rising input costs and heightened competition.
Is now the time to buy REYN? Find out in our full research report (it’s free for active Edge members).
Reynolds (REYN) Q4 CY2025 Highlights:
- Revenue: $1.03 billion vs analyst estimates of $1.01 billion (1.3% year-on-year growth, 2.9% beat)
- Adjusted EPS: $0.59 vs analyst estimates of $0.59 (in line)
- Adjusted EBITDA: $220 million vs analyst estimates of $214.5 million (21.3% margin, 2.5% beat)
- Revenue Guidance for Q1 CY2026 is $809.8 million at the midpoint, below analyst estimates of $837.9 million
- Adjusted EPS guidance for the upcoming financial year 2026 is $1.60 at the midpoint, missing analyst estimates by 8.4%
- EBITDA guidance for the upcoming financial year 2026 is $667.5 million at the midpoint, below analyst estimates of $678.5 million
- Operating Margin: 17%, in line with the same quarter last year
- Organic Revenue rose 1% year on year (beat)
- Sales Volumes fell 2% year on year (2% in the same quarter last year)
- Market Capitalization: $4.86 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 Q4 Earnings Call
- Kaumil Gajrawala (Jefferies) asked how the restructuring of Presto and Hefty would improve execution. CEO Scott Huckins explained the move focuses teams on core categories and enhances growth clarity without significant organizational disruption.
- Peter Grom (UBS) questioned the rationale for maintaining current pricing and promotion strategies amid rising competition. Huckins replied that prioritizing brand equity and long-term value outweighs chasing short-term volume gains, with volume headwinds already included in guidance.
- Andrea Teixeira (JPMorgan) probed the impact of private label trends and product mix. Huckins said private label remains stable overall, with growth in Presto food bags and expectations for more branded mix in 2026 as private label pressures are offset.
- Lauren Lieberman (Barclays) sought clarification on SG&A trends and the sustainability of recent cost reductions. CFO Nathan Lowe stated that SG&A savings reflected optimization, not overcutting, and increases in 2026 would support innovation launches.
- Brian McNamara (Canaccord Genuity) inquired about foil elasticity and price points. Huckins noted tighter gaps with private label and gradual price increases have limited elasticity so far, though future hikes may bring more risk.
Catalysts in Upcoming Quarters
As we look ahead, our analysts will monitor (1) Reynolds’ ability to hold or expand category share despite increased promotional pressure, (2) the impact of further automation and manufacturing efficiency projects on costs and margins, and (3) the effectiveness of new product launches and the realigned business structure in accelerating growth. Execution on price adjustments and competitive positioning will also be critical to watch.
Reynolds currently trades at $23.08, up from $21.81 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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