Latest news with #REYN
Yahoo
14-05-2025
- Business
- Yahoo
REYN Q1 Earnings Call: Tariffs, Retail Destocking, and Innovation Shape Outlook
Household products company Reynolds (NASDAQ:REYN) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 1.8% year on year to $818 million. The company expects next quarter's revenue to be around $897.5 million, close to analysts' estimates. Its non-GAAP profit of $0.23 per share was in line with analysts' consensus estimates. Is now the time to buy REYN? Find out in our full research report (it's free). 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, roughly in line with what analysts were expecting 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 Free Cash Flow Margin: 2.1%, down from 8.4% 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: $4.88 billion Reynolds' first quarter results reflected both external and internal pressures as the company navigated a challenging consumer environment. CEO Scott Huckins pointed to retailer destocking, later Easter timing, and softness in the foam category as notable headwinds, but highlighted that Reynolds outperformed its categories by two points in retail share and grew volumes in key segments like household foil and waste bags. Huckins stated, 'We are acting decisively to respond to the changing macro dynamics, and we remain focused on progressing our strategic initiatives.' On the innovation front, management called out product launches such as Hefty Compostable cutlery, leveraging technology from the Atacama acquisition, and expanded distribution for new scents in the Hefty Fabuloso line. Looking ahead, Reynolds' revised guidance incorporates a more cautious outlook, reflecting ongoing cost pressures from tariffs and expectations for continued retailer inventory management. CFO Nathan Lowe explained, 'Our lower EBITDA guide…contemplates really just our lower retail volume expectation. The revenue guide is unchanged, but the pricing component of that really just serves to neutralize both the direct and indirect impact of tariffs.' Management emphasized that the company is offsetting these headwinds through a combination of price increases, productivity initiatives, and cost reductions, while continuing to prioritize investments in automation and supply chain efficiency. Performance in the first quarter was shaped by retailer inventory adjustments and cost headwinds. Management's commentary addressed shifts in consumer behavior, product innovation, and operational responses to tariffs and inflation. Retailer Destocking Impact: Reynolds experienced a headwind from retailer destocking, which management sees as a permanent adjustment in how retail partners manage inventory. This affected retail revenues, particularly in the foam category, but management noted that the company still gained share in core categories like foil and waste bags. Innovation Pipeline Expansion: Management highlighted progress in product innovation, referencing the launch of Hefty Compostable cutlery (utilizing technology from the Atacama acquisition) and new scents for Hefty Fabuloso waste bags. These efforts are part of a broader push to prioritize and resource larger-scale innovation for growth. Category Share Gains: Despite a challenging environment, Reynolds outperformed its categories at retail by two points, driven by distribution gains and the scaling of new products, with no increase in promotional spend compared to last year. Tariff and Cost Pressures: The company is facing $100 million to $200 million in annualized cost headwinds from direct and indirect tariffs, mostly related to commodities like aluminum. Management is deploying price increases and productivity enhancements to offset these pressures. Supply Chain and Automation Investments: Reynolds continues to invest in automation and network optimization to improve manufacturing productivity. Management believes these initiatives will yield financial benefits later in the year, supporting long-term margin expansion. Management's outlook for the remainder of the year is shaped by persistent consumer and retailer caution, ongoing cost inflation, and a focus on operational improvements to protect margins. Tariffs and Pricing Actions: Reynolds expects tariff-related cost headwinds to continue, with price increases and productivity initiatives aimed at maintaining profitability. Management noted that pricing actions are designed to fully offset direct and indirect tariff costs over time. Retail Volume and Category Trends: The company anticipates retail volume to perform at or above category averages, but expects pressure from lower consumer confidence and continued retailer inventory discipline, especially in discretionary categories. Productivity and Supply Chain Optimization: Ongoing investments in supply chain automation and procurement efficiency are expected to drive incremental margin improvement. Management cited early positive results from these initiatives and expects more substantial benefits later in the year. Kaumil Gajrawala (Jefferies): Asked if retailer destocking is a temporary or permanent change. Management replied they assume it is permanent and will flow through the full year. Peter Grom (UBS): Inquired about category growth expectations and the phasing of tariff cost mitigation. Management explained that lower retail volumes and price elasticity drive the guidance, and cost impacts are expected to phase in over two to six months. Lauren Lieberman (Barclays): Sought clarification on the source of tariff pressures and the rationale for segment reporting changes. CFO Nathan Lowe described the split between direct and indirect tariff impacts and the realignment of international reporting by product category. Andrea Teixeira (JPMorgan): Asked about consumption trends exiting the quarter and the role of promotions in supporting price increases. Management noted consumption trends were as expected, with no increase in promotional spend, but anticipate some increase tied to new distribution in Q2. Brian McNamara (Canaccord Genuity): Requested details on pricing mechanics for aluminum foil and the competitive landscape with private label. Management responded that pricing typically flows through in two to six months and store brand share remained stable in Reynolds' largest categories. Looking forward, the StockStory team will monitor (1) the pace and effectiveness of Reynolds' price increases in offsetting tariff-related cost pressures, (2) any stabilization or recovery in retail volumes as consumer confidence evolves, and (3) the realization of manufacturing productivity gains from automation and supply chain projects. The success of new product launches and the impact of distribution wins will also be key signposts for progress on the company's strategic priorities. Reynolds currently trades at a forward P/E ratio of 14.2×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
05-05-2025
- Business
- Yahoo
3 Hated Stocks That Concern Us
Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap? At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead. One-Month Return: +1.4% Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste. Why Do We Pass on REYN? Declining unit sales over the past two years show it's struggled to move its products and had to rely on price increases Projected sales decline of 1.4% for the next 12 months points to an even tougher demand environment ahead Free cash flow margin dropped by 6.1 percentage points over the last year, implying the company became more capital intensive as competition picked up Reynolds's stock price of $23.31 implies a valuation ratio of 14.2x forward P/E. Dive into our free research report to see why there are better opportunities than REYN. One-Month Return: -4.6% Founded in 1932, Universal Logistics (NASDAQ:ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia. Why Do We Think ULH Will Underperform? Customers postponed purchases of its products and services this cycle as its revenue declined by 5.1% annually over the last two years Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term Free cash flow margin shrank by 9.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive Universal Logistics is trading at $23.41 per share, or 7.4x forward P/E. Check out our free in-depth research report to learn more about why ULH doesn't pass our bar. One-Month Return: -1.2% With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE:MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally. Why Are We Cautious About MMS? Demand will likely fall over the next 12 months as Wall Street expects flat revenue Underwhelming 12.3% return on capital reflects management's difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam Eroding returns on capital from an already low base indicate that management's recent investments are destroying value At $66.52 per share, Maximus trades at 10.7x forward P/E. If you're considering MMS for your portfolio, see our FREE research report to learn more. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
30-04-2025
- Business
- Yahoo
Reynolds Consumer Products: Q1 Earnings Snapshot
LAKE FOREST, Ill. (AP) — LAKE FOREST, Ill. (AP) — Reynolds Consumer Products Inc. (REYN) on Wednesday reported first-quarter profit of $31 million. On a per-share basis, the Lake Forest, Illinois-based company said it had profit of 15 cents. Earnings, adjusted for non-recurring costs, came to 23 cents per share. The results matched Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was also for earnings of 23 cents per share. The company posted revenue of $818 million in the period, which fell short of Street forecasts. Three analysts surveyed by Zacks expected $821.9 million. For the current quarter ending in June, Reynolds Consumer Products expects its per-share earnings to range from 35 cents to 39 cents. The company expects full-year earnings in the range of $1.54 to $1.61 per share. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on REYN at Sign in to access your portfolio
Yahoo
15-04-2025
- Business
- Yahoo
3 of Wall Street's Favorite Stocks with Red Flags
Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it's worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover. Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are three stocks where Wall Street's estimates seem disconnected from reality and some better opportunities to consider. Consensus Price Target: $31.22 (18.7% implied return) Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste. Why Should You Sell REYN? Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth Demand will likely fall over the next 12 months as Wall Street expects flat revenue Capital intensity has ramped up over the last year as its free cash flow margin decreased by 4.4 percentage points At $23.97 per share, Reynolds trades at 13.7x forward price-to-earnings. Read our free research report to see why you should think twice about including REYN in your portfolio, it's free. Consensus Price Target: $18.06 (3.1% implied return) Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE:BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms. Why Should You Dump BALY? Lackluster 4.2% annual revenue growth over the last two years indicates the company is losing ground to competitors Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders Bally's stock price of $15.09 implies a valuation ratio of 1.2x forward EV-to-EBITDA. If you're considering BALY for your portfolio, see our FREE research report to learn more. Consensus Price Target: $45.63 (47.6% implied return) Founded in California in 1982, Malibu Boats (NASDAQ:MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts. Why Do We Think MBUU Will Underperform? Performance surrounding its boats sold has lagged its peers Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 29% annually Eroding returns on capital from an already low base indicate that management's recent investments are destroying value Malibu Boats is trading at $26.91 per share, or 8.2x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than MBUU. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
