10-Q · May 6, 2026
Reynolds Consumer Products Inc. (REYN) reported Q1 2026 revenues of $877 million, marking a 7% increase from $818 million in the same quarter last year. Net income surged to $59 million, a substantial 90% increase…
Earnings analysis · 10-Q
REYN earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Reynolds Consumer Products delivered modest Q2 sales growth of 1% to $944 million, while gross margin expanded 200 basis points to 26%, operating margin increased 200 basis points to 15%, and EPS rose from $0.35 to…
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Reynolds Consumer Products delivered modest Q2 sales growth of 1% to $944 million, while gross margin expanded 200 basis points to 26%, operating margin increased 200 basis points to 15%, and EPS rose from $0.35 to $0.42. Growth in Cooking & Kitchen Essentials and Storage & Organization offset a 10% decline in Home & Tableware, but lower volume remains a key underlying headwind. First-half free cash flow was approximately $72 million after $101 million of capital spending, while cash declined $81 million and term-loan debt remained $1.536 billion.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $0.42
What stood out
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Revenue returned to modest growth
Q2 net revenue increased $6 million, or 1%, year over year to $944 million. Revenue also rose from an implied $877 million in Q1 2026 (six-month revenue of $1.821 billion less Q2 revenue of $944 million).
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Margins expanded year over year
Gross profit rose $19 million to $245 million and gross margin expanded to 26% from 24%. Operating income increased $20 million to $138 million, lifting operating margin to 15% from 13%.
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Earnings growth exceeded sales growth
GAAP net income rose 22% to $89 million and diluted EPS increased to $0.42 from $0.35. Adjusted EBITDA increased $8 million, or 5%, to $171 million.
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Two segments delivered growth
Cooking & Kitchen Essentials revenue grew 6% to $314 million, including retail revenue up $14 million to $258 million and non-retail revenue up $5 million to $56 million. Storage & Organization revenue rose 5% to $176 million.
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Operating cash flow improved despite capex
First-half operating cash flow increased $26 million to $173 million. Capital expenditures/investing cash outflows were $101 million, implying $72 million of free cash flow and a 5.5% capex-to-revenue intensity on $1.821 billion of first-half revenue.
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Voluntary debt reduction improves maturity profile
The company voluntarily repaid $50 million of term-loan principal in the first half, and has no quarterly term-loan amortization due until December 2031 as a result of voluntary repayments.
What to watch
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Home & Tableware volume weakness
Hefty Home & Tableware revenue declined $25 million, or 10%, to $217 million, principally from lower volume, primarily foam. This was the largest segment revenue decline in Q2 despite Adjusted EBITDA rising $8 million to $43 million.
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Promotions and ramp costs pressured segments
Hefty Waste & Clean-Up revenue declined $3 million to $233 million and Adjusted EBITDA fell $3 million, or 4%, to $69 million, attributed to promotional timing. Storage & Organization EBITDA also declined $3 million, or 10%, to $27 million despite 5% revenue growth.
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Cash draw and sizable term-loan balance
Cash and cash equivalents decreased $81 million in the first six months as $173 million of operating cash flow was more than offset by $101 million of investing outflows and $153 million of financing outflows. The company still had $1.536 billion outstanding under its Term Loan Facility at June 30, 2026.
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Input-cost and volume exposure remains
No material risk-factor changes were reported relative to the 2025 Form 10-K. Nevertheless, management says higher input costs required pricing actions; total Q2 volume/mix reduced revenue by 5 percentage points while pricing added 7 percentage points.
Management's outlook
The 10-Q does not provide explicit quantitative revenue or EPS guidance. Management states that projected cash, operating cash flow and Revolving Facility availability are expected to be sufficient for debt service, capital expenditures and working-capital needs for the foreseeable future.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.