Household products company Reynolds (NASDAQ: REYN) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 2.3% year on year to $931 million. On top of that, next quarter’s revenue guidance ($1.05 billion at the midpoint) was surprisingly good and 6.3% above what analysts were expecting. Its non-GAAP profit of $1.05 per share was significantly above analysts’ consensus estimates.
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: $1.05 vs analyst estimates of $0.39 (significant 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 $653.4 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: $5.25 billion
StockStory’s Take
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.”
Looking ahead, Reynolds’ updated guidance is influenced by continued investments in innovation, new leadership hires, and the expectation that recent retail trends will persist. The company is banking on further cost reductions, automation, and targeted growth initiatives led by its new Chief Commercial Officer and Chief Operations Officer. CFO Nathan Lowe stated that the higher full-year outlook reflects, “confidence in our retail trends and the programs we are implementing to drive near and longer-term results,” though he cautioned that consumer sentiment remains weak and the operating environment is dynamic.
Key Insights from Management’s Remarks
Management attributed the quarter’s outperformance to retail share gains, effective pricing, and ongoing cost savings initiatives, while addressing challenges from a pressured consumer environment and tariff-driven supplier costs.
-
Broad-based share gains: Reynolds increased market share in key categories like Hefty Waste Bags, Reynolds Wrap, store brand food bags, and party cups. These gains were fueled by both product innovation and execution at retail, with Reynolds Wrap volumes outperforming the broader foil category.
-
Effective pricing and value: The company implemented aluminum foil price increases as planned, narrowing the price gap with store brands and offering consumers a stronger value proposition. This approach helped drive volume for Reynolds Wrap during a period of rising input costs.
-
Cost discipline and productivity: Management highlighted progress in manufacturing productivity, supply chain efficiency, and SG&A cost reductions. These efforts included applying lean principles and expanding automation, which have begun to deliver margin benefits despite a challenging cost environment.
-
Innovation and new products: Reynolds pointed to the success of new launches, such as Reynolds Wrap Fun Foil and Reynolds Kitchens Air Fryer Liners, as well as Hefty ECOSAVE compostable cutlery and scented waste bags. These products align with consumer trends toward customization, convenience, and sustainability.
-
Leadership changes drive execution: The addition of Chief Commercial Officer Carlen Hooker and Chief Operations Officer Scott Vail is intended to accelerate growth programs, improve revenue management, and strengthen manufacturing initiatives, supporting both near-term performance and long-term strategy.
Drivers of Future Performance
Reynolds expects future performance to be shaped by retail channel momentum, ongoing cost initiatives, and a cautious stance on consumer spending and input costs.
-
Retail trends and innovation: The company believes its category leadership and pipeline of new products, including expanded distribution of Air Fryer Liners and Fun Foil, will support continued share gains and offset softer sales volumes in certain segments.
-
Cost and margin management: Management is prioritizing further automation, technology investment, and lean manufacturing to mitigate margin pressures from commodity costs and tariffs. They expect these efforts to gradually improve earnings and profitability, even as operating margin remains below prior-year levels.
-
Consumer and retailer dynamics: Reynolds is closely watching consumer sentiment, which remains subdued, and anticipates ongoing promotional activity and potential shifts in store brand relationships as retailers seek more value amid inflation and tariffs. CEO Scott Huckins noted the company is positioned to win private label contracts due to its U.S.-centric supply chain but flagged the risk of increased retailer bidding.
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 $24.55, up from $23.72 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 for active Edge members).
High Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
