Reynolds Consumer Products Inc. REYN posted second-quarter 2026 adjusted earnings of 42 cents per share, up 7.7% year over year, and beating the Zacks Consensus Estimate of 41 cents by 2.4%. Manufacturing efficiencies and supply-chain productivity supported the earnings improvement.
Reynolds Consumer Products Inc. Price and Consensus
Reynolds Consumer Products Inc. price-consensus-chart | Reynolds Consumer Products Inc. Quote
Net revenues rose 0.6% year over year to $944 million, surpassing the consensus estimate of $942 million by 0.2%. Retail volumes declined 5%, but the drop narrowed to 2% excluding foam products. Adjusted EBITDA increased 4.9% to $171 million.
REYN Benefits From Margin Expansion
Gross profit increased 8.4% year over year to $245 million. Gross margin expanded 180 basis points to 26%, reflecting manufacturing efficiencies and broader supply-chain productivity initiatives.
Selling, general and administrative expenses rose 11.5% to $107 million. Still, operating income advanced 16.9% to $138 million as gross-profit growth more than offset the higher expenses. Net income climbed 21.9% to $89 million.
Reynolds' Q2 Segment Details
Reynolds Cooking & Kitchen Essentials revenues increased 6.4% year over year to $314 million. Pricing contributed 19 percentage points as the company sought to offset elevated commodity costs, while retail volumes declined 8%. Promotional timing differences in foil weighed on volumes. However, Reynolds parchment paper, oven bags and slow-cooker liners gained market share. Adjusted EBITDA rose 8.2% to $53 million, aided by manufacturing efficiency gains despite lower volumes.
Hefty Waste & Clean-Up revenues slipped 1.3% year over year to $233 million. Retail volumes were flat as branded gains offset previously disclosed private-label distribution losses. The Hefty waste brand maintained share despite heightened promotional activity. Adjusted EBITDA for the segment declined 4.2% to $69 million due to lower revenues. Management noted that Hefty branded waste achieved low-double-digit distribution growth during the first half, while branded volumes and sales each increased 2%.
Hefty Home & Tableware revenues decreased 10.3% year over year to $217 million. Retail volumes fell 14%, largely due to continued weakness in foam products. Excluding foam, volumes declined 8%. Despite the top-line pressure, adjusted EBITDA increased 22.9% to $43 million. Manufacturing productivity and lower promotional spending offset the impact of weaker volumes. Hefty party cups also delivered market-share gains during the quarter.
Hefty Storage & Organization revenues advanced 5.4% to a second-quarter record of $176 million. Retail volumes grew 8%, supported by strength in Hefty and store-brand food bags and expanded distribution at key retailers. Adjusted EBITDA declined 10% to $27 million. The decrease primarily reflected costs tied to ramping up new business and promotional spending behind distribution gains. Management said Hefty food-bag e-commerce sales increased approximately 30% from the prior-year period.
Reynolds Generates Stronger Operating Cash Flow
Operating cash flow increased to $173 million in the first six months of 2026 from $147 million a year earlier, supported by higher net income. Capital expenditures rose 27.8% to $101 million as Reynolds invested in automation, growth and cost-reduction projects.
At quarter-end, cash and cash equivalents totaled $66 million, while debt stood at $1.53 billion. Net debt was $1.46 billion, and the net debt-to-adjusted EBITDA ratio remained at 2.1 times. The company also made a voluntary $50 million debt repayment during the first half.
Reynolds’ Q3 & 2026 Outlook
Reynolds increased its 2026 net revenue outlook to growth of 1-3% from the prior guidance midpoint of a 1% decline. The revision reflects additional pricing to recover commodity inflation and better-than-expected first-half retail volumes.
The company reiterated adjusted earnings guidance of $1.57-$1.63 per share and adjusted EBITDA guidance of $660-$675 million. Management now expects roughly $400 million in annualized commodity headwinds, up from the $200 million cited in April.
For the third quarter of 2026, net revenues are expected to remain approximately flat compared with $931 million in the year-ago period. Adjusted earnings are projected between 37 cents and 39 cents per share.
Adjusted EBITDA is anticipated in the range of $160-$165 million, compared with $168 million a year earlier. Management expects second-half pricing to support revenues, though related demand elasticity could pressure volumes and reported margin rates.
The Zacks Rank #3 (Hold) company's shares have gained 23.7% in the past three months compared with the industry’s 8.3% growth.
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