Latest news with #ScottHuckins
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
30-04-2025
- Business
- Yahoo
Reynolds (NASDAQ:REYN) Posts Q1 Sales In Line With Estimates
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. On the other hand, next quarter's revenue guidance of $897.5 million was less impressive, coming in 2.2% below analysts' estimates. Its non-GAAP profit of $0.23 per share was in line with analysts' consensus estimates. Is now the time to buy Reynolds? Find out in our full research report. 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 $119.4 million (14.3% margin, 2% 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 $667.6 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: $4.98 billion 'We are executing well in a dynamic consumer and retail environment, outperforming our categories by two points in the quarter,' said Scott Huckins, President and Chief Executive Officer. Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. With $3.68 billion in revenue over the past 12 months, Reynolds carries some recognizable products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. As you can see below, Reynolds struggled to increase demand as its $3.68 billion of sales for the trailing 12 months was close to its revenue three years ago. This is mainly because consumers bought less of its products - we'll explore what this means in the "Volume Growth" section. This quarter, Reynolds reported a rather uninspiring 1.8% year-on-year revenue decline to $818 million of revenue, in line with Wall Street's estimates. Company management is currently guiding for a 3.5% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. This projection is underwhelming and suggests its newer products will not lead to better top-line performance yet. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there's a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive. To analyze whether Reynolds generated its growth (or lack thereof) from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations. Over the last two years, Reynolds's average quarterly volumes have shrunk by 2%. This isn't ideal for a consumer staples company, where demand is typically stable. In the context of its 2.3% average organic sales declines, we can see that most of the company's losses have come from fewer customers purchasing its products. In Reynolds's Q1 2025, sales volumes dropped 4% year on year. This result represents a further deceleration from its historical levels, showing the business is struggling to move its products. We struggled to find many positives in these results. Its gross margin missed and its EBITDA fell short of Wall Street's estimates. Full-year EBITDA guidance missed, and full-year EPS was lowered. Overall, this was a softer quarter. The stock remained flat at $23.70 immediately following the results. Reynolds may have had a tough quarter, but does that actually create an opportunity to invest right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Chicago Tribune
24-04-2025
- Business
- Chicago Tribune
Reynolds Consumer Products CEO pays $3.1M for Lake Forest mansion
Reynolds Consumer Products President and CEO Scott Huckins and his wife, Elizabeth, on March 14 paid $3.125 million for a six-bedroom, 7,541-square-foot mansion in Lake Forest. In January, Huckins was named the CEO of the Lake-Forest based maker of Hefty trash bags and Reynolds aluminum wrap, after previously serving as the company's chief financial officer for a little more than a year. In Lake Forest, the custom-built stone mansion that Huckins bought was built in 2010 and is situated on a 1.69-acre property. The mansion has eight bathrooms, seven fireplaces, a slate roof, hand-scraped wood floors and a family room with a large fireplace and a custom mantel, along with French doors leading to the back yard. Other features include a paneled library with a wood-coffered ceiling, a limestone fireplace and built-ins, along with a custom movie projector and screen. The kitchen has a large island, a Wolf range with a hand-made metal hood, Wolf double ovens and a breakfast room. The home also has a heated sunroom with a fireplace, a large mudroom, an office, a first-floor primary bedroom suite with vaulted ceilings and a fireplace and a full basement with a recreational area and a second kitchen. Outside on the property are a pergola and an expansive patio area. Lori Glattly of Berkshire Hathaway HomeServices Chicago, who represented Huckins, declined to comment on the transaction. The mansion had been listed for a time last year for $3.995 million before it was taken off the market. The property had a $55,994 property tax bill in the 2023 tax year.
