Financial Performance - Net sales increased by 1.2% to $700.2 million compared to $692.2 million[65, 59] - Organic net sales grew by 1.9%[16] - Adjusted EBITDA improved by 26.9% excluding investment income[16] - Gross margins increased by 140 basis points[16] - Net leverage is under 1.1x[16] Share Repurchases - The company repurchased 15.3 million shares[20] - Total shares outstanding were reduced by approximately 36.6%[20] - $1.2 billion was spent on share repurchases[20] - The company entered into a $150 million 10b5-1 share repurchase plan in Q1 FY25[21] Segment Performance - Global Pet Care (GPC) net sales decreased by 6.1%[37] and organic sales decreased by 6.4%[38] - Home & Garden (H&G) net sales increased by 27.9%[41] and organic sales increased by 27.9%[43] - Home & Personal Care (HPC) net sales increased by 1.4%[45] and organic sales increased by 3.1%[45] FY25 Outlook - The company is targeting low single-digit net sales growth[57] - The company is targeting mid-to-high single-digit adjusted EBITDA growth (excluding investment income)[57] - The company is targeting approximately 50% adjusted free cash flow conversion as a percentage of adjusted EBITDA[57]

Financial Data and Key Metrics Changes - Net sales increased by 1.2%, with organic net sales up 1.9% excluding unfavorable foreign exchange impacts [12][40] - Adjusted EBITDA was $77.8 million, a decrease of 7.7% or $6.5 million driven by prior year investment income [43] - Gross profit increased by $12.9 million, with gross margins at 36.8%, up 140 basis points [41] - Operating income improved by $19.7 million to $44.7 million, driven by gross margin improvement and lower operating expenses [42] Business Line Data and Key Metrics Changes - **Global Pet Care (GPC)**: Reported net sales decreased by 6.1%, with organic sales down 6.4% due to a prior quarter's sales pull forward [49][50] - **Home and Garden (H&G)**: Net sales increased by 27.9%, driven by seasonal inventory builds by retailers [62] - **Home and Personal Care (HPC)**: Reported net sales increased by 1.4%, with organic net sales up 3.1% [75] Market Data and Key Metrics Changes - E-commerce sales accounted for over 30% of HPC's quarterly global sales, significantly outpacing brick-and-mortar sales [76] - GPC's e-commerce sales were relatively flat, impacted by a major retailer's capacity issues [55] - Sales in North America for GPC declined low double digits, while EMEA saw mid-single-digit growth [52][78] Company Strategy and Development Direction - The company is focusing on brand-driven investments to drive long-term growth, with increased spending on advertising, marketing, and R&D [19][20] - Strategic investments are being made in e-commerce capabilities to enhance sales growth [20] - The company is moving production out of China to mitigate tariff impacts, with plans to source 35% to 40% of U.S.-bound appliance products outside of China by the end of the fiscal year [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational performance and the potential for growth despite a dynamic environment influenced by tariffs and foreign exchange headwinds [90][91] - The company expects cautious consumer behavior and is prepared for potential impacts on pricing and inflation [91] - Future sales growth is anticipated to be low single digits, driven by brand-building investments [85] Other Important Information - The company repurchased approximately 800,000 shares during the first quarter, with a total of 2.1 million shares repurchased year-to-date [31][32] - The company maintains a strong balance sheet with net leverage under 1.1 turns, allowing for continued investments and shareholder returns [18][35] Q&A Session Summary Question: How committed are retailers to the garden category this year? - Management noted that retailers show a similar level of commitment as last year, with some incremental off-shelf seasonal space coming to their categories [105][106] Question: Could the delay in the HPC segment be a blessing in disguise? - Management acknowledged the delay but emphasized the importance of improving fundamentals and the potential for higher multiples in the future [116][120] Question: What is the growth rate of the e-commerce business in GPC? - Management indicated that online sales continue to grow double digits, despite some capacity issues with a major retailer [125][126] Question: What are the current thoughts on M&A? - Management is cautious about M&A, focusing on acquiring higher-growing assets while maintaining discipline and patience [145] Question: What actions are being taken to reduce tariff exposure? - Management highlighted that the home and garden business is less impacted by tariffs due to domestic sourcing, while efforts are ongoing to dual-source products in the pet segment [149]

For the quarter ended December 2024, Spectrum Brands (SPB) reported revenue of $700.2 million, up 1.2% over the same period last year. EPS came in at $1.02, compared to $0.78 in the year-ago quarter.The reported revenue represents a surprise of -0.19% over the Zacks Consensus Estimate of $701.54 million. With the consensus EPS estimate being $0.91, the EPS surprise was +12.09%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determi ...

Financial Performance - Net sales for the three-month period ended December 29, 2024, increased to $700.2 million, up from $692.2 million in the same period last year, representing a growth of 1.5%[15] - Gross profit rose to $257.8 million, compared to $244.9 million in the prior year, reflecting an increase of 5.5%[15] - Operating income significantly improved to $44.7 million, up from $25.0 million, marking an increase of 78.8%[15] - Net income from continuing operations was $24.6 million, compared to $17.5 million, which is a year-over-year increase of 40.0%[15] - Basic earnings per share from continuing operations increased to $0.87, up from $0.51, representing a growth of 70.6%[15] - Net income for the three-month period ended December 29, 2024, was $23.8 million, a decrease of 18.5% compared to $29.2 million for the same period in 2023[18] - Comprehensive loss for the three-month period ended December 29, 2024, was $(25.6) million, a significant decline from a comprehensive income of $45.5 million in the same period of 2023[18] - Total segment adjusted EBITDA increased to $87.5 million for the three months ended December 29, 2024, compared to $78.7 million for the same period in 2023, representing an increase of 10.9%[81] - Net income from continuing operations attributable to controlling interest was $24.3 million for the three months ended December 29, 2024, up from $17.4 million in the prior year, reflecting a growth of 39.7%[84] Assets and Liabilities - Total assets decreased to $3,614.6 million as of December 29, 2024, down from $3,842.3 million at the end of the previous quarter[13] - Total liabilities decreased to $1,586.0 million from $1,700.6 million, indicating a reduction of 6.7%[13] - The company’s total shareholders' equity as of December 29, 2024, was $2,028.5 million, a decrease from $2,300.8 million as of December 31, 2023[20] - Total debt as of December 29, 2024, is $575.1 million, a decrease from $577.7 million on September 30, 2024[44] Cash Flow - Cash flows from operating activities from continuing operations showed a net cash used of $(71.9) million for the three-month period ended December 29, 2024, compared to a net cash provided of $18.1 million in the same period of 2023[24] - Total cash, cash equivalents, and restricted cash at the end of the period was $182.0 million, down from $445.4 million at the end of the same period in 2023[24] - The company reported a net cash used by financing activities of $(97.3) million for the three-month period ended December 29, 2024, compared to $(439.8) million in the same period of 2023[24] - Cash flows from operating activities decreased by $90.0 million to $(71.9) million, primarily due to increased working capital needs[116] - Cash flows from investing activities dropped by $139.5 million, attributed to reduced short-term investment activity[117] - Cash flows from financing activities increased by $342.5 million, mainly due to lower debt repayment and share repurchase activity[118] Inventory and Expenses - Inventories increased to $507.4 million from $462.1 million, reflecting a rise of 9.8%[13] - Selling, general & administrative expenses decreased to $213.1 million, representing 30.4% of net sales, down from 31.8% in the prior year[105] - The company reported depreciation expenses of $14.0 million for the three-month period ended December 29, 2024, slightly down from $14.4 million in the same period of 2023[24] - The Company incurred total costs of $4.8 million related to strategic transactions and restructuring initiatives for both December 29, 2024, and December 31, 2023[95] - Exit and disposal costs for the three months ended December 29, 2024, were $0.5 million, primarily related to severance and contract termination[96] Segment Performance - The GPC segment reported net sales of $260.0 million, down from $276.9 million, indicating a decline of about 6.3% year-over-year[76] - The H&G segment experienced a significant increase in net sales, rising to $92.1 million from $72.0 million, reflecting a growth of approximately 27.9%[76] - The HPC segment's net sales remained relatively stable, increasing slightly to $348.1 million from $343.3 million, a growth of about 1.4%[76] - The GPC segment reported adjusted EBITDA of $51.5 million for the three months ended December 29, 2024, slightly down from $52.7 million in the prior year[81] - The H&G segment showed a significant improvement with adjusted EBITDA of $9.3 million for the three months ended December 29, 2024, compared to a loss of $0.7 million in the same period of 2023[81] - The HPC segment maintained adjusted EBITDA at $26.7 million for both periods, indicating stable performance[81] Shareholder Returns - The company declared a dividend of $0.47 per share, an increase from $0.42 per share in the previous year[15] - The company made cash dividend payments of $13.2 million, or $0.47 per share, down from $14.1 million, or $0.42 per share, in the prior year[118] Other Financial Metrics - The effective tax rate for the three-month period ended December 29, 2024, was 32.5%, a decrease from 41.6% for the same period in 2023[67] - Interest expense significantly decreased by 67.7% to $6.2 million from $19.2 million due to reduced debt borrowings[100] - Adjusted EBITDA decreased to $77.8 million for the three months ended December 29, 2024, from $84.3 million in the same period of 2023, a decline of 7.7%[92] - Adjusted EBITDA margin was 11.1% for the three months ended December 29, 2024, down from 12.2% in the prior year[92] Legal and Regulatory Matters - The company is currently evaluating the impact of recently issued accounting standards on its consolidated financial statements, including ASU 2023-07 and ASU 2023-09, which will be effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively[29][31] - The company continues to assess the impact of the OECD's Pillar Two framework, which introduces a global minimum corporate income tax of 15%[68] - The company is actively engaged in litigation related to the Tristar Business acquisition, which has resulted in significant operational challenges and increased costs[72]

Financial Data and Key Metrics Changes - Net sales increased by 1.2%, with organic net sales up 1.9% excluding unfavorable foreign exchange impacts [9][27] - Adjusted EBITDA was $77.8 million, a decrease of 7.7% driven by prior year investment income and increased brand-focused investments [29] - Gross margins improved by 140 basis points to 36.8%, supported by cost improvements and operational efficiencies [28] Business Line Data and Key Metrics Changes - Global Pet Care reported a net sales decrease of 6.1%, with organic sales down 6.4% due to a strategic pull forward of sales from the previous quarter [31] - Home and Garden net sales increased by 27.9%, driven by seasonal inventory builds and a warm fall season [38] - Home and Personal Care saw reported net sales increase by 1.4%, with organic net sales up 3.1% [44] Market Data and Key Metrics Changes - E-commerce sales accounted for over 30% of Home and Personal Care's quarterly global sales, significantly outpacing brick-and-mortar sales [44] - In North America, consumer trade downs impacted premium brands in the pet category, leading to low double-digit sales declines [33] - EMEA markets experienced high single-digit growth in both personal care and home appliances, with strong e-commerce performance [45] Company Strategy and Development Direction - The company is focusing on brand-driven investments to drive long-term growth, particularly in advertising, marketing, and R&D [14] - Strategic investments are being made in inventory to support sales growth, especially in e-commerce [15] - The company is actively working to mitigate tariff impacts by moving production out of China and redesigning supply chains [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the start of fiscal 2025, highlighting strong operational performance and healthy inventory levels [55] - The company anticipates cautious consumer behavior due to the evolving international trade environment and potential price implications [53] - Future sales growth is expected to be low single digits, driven by brand-building investments despite geopolitical and economic pressures [49] Other Important Information - The company repurchased approximately 800,000 shares in the first quarter, with a total of $1.2 billion returned to shareholders since the close of the HHI transaction [22][23] - The company plans to launch new products in the pet care segment, including health and wellness products, to capture market growth [16][90] Q&A Session Summary Question: Retailer commitment to the Home and Garden category - Management noted that retailers appear committed to the category, with incremental off-shelf seasonal space being allocated [61][66] Question: Potential delay in HPC business - Management acknowledged the delay but emphasized the importance of improving the business fundamentals and the potential for higher valuations in the future [70][72] Question: E-commerce growth in Global Pet Care - Management reported double-digit growth in POS for e-commerce, despite some capacity issues with a major retailer impacting shipments [76][78] Question: M&A strategy and needs - Management has been evaluating numerous transactions but is cautious about price points, focusing on organic growth and maintaining discipline in M&A [87][90] Question: Tariff impacts and competitive dynamics - Management highlighted the limited tariff impact on Home and Garden and the ongoing efforts to reduce exposure in the HPC segment [95][98]

Group 1: Earnings Performance - Spectrum Brands reported quarterly earnings of $1.02 per share, exceeding the Zacks Consensus Estimate of $0.91 per share, and up from $0.78 per share a year ago, representing an earnings surprise of 12.09% [1] - The company posted revenues of $700.2 million for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.19%, but up from $692.2 million year-over-year [2] - Over the last four quarters, Spectrum has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Spectrum shares have declined approximately 1.9% since the beginning of the year, while the S&P 500 has gained 3.1% [3] - The current consensus EPS estimate for the upcoming quarter is $1.52 on revenues of $724.64 million, and for the current fiscal year, it is $5.17 on revenues of $2.98 billion [7] - The estimate revisions trend for Spectrum is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Consumer Products - Discretionary industry, to which Spectrum belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Financial Performance - Net sales increased by 1.2% to $700.2 million, with organic sales growth of 1.9% after excluding unfavorable foreign exchange impacts of $5.1 million[4] - Net income from continuing operations rose to $24.6 million, a 40.6% increase compared to the previous year, while diluted earnings per share increased by 70.6% to $0.87[5] - Adjusted EBITDA decreased by 7.7% to $77.8 million, with an adjusted EBITDA margin of 11.1%, down 110 basis points from the prior year[5] - The Home & Garden segment saw a significant sales increase of 27.9% to $92.1 million, driven by an extended fall selling season and seasonal inventory builds[9] - Global Pet Care net sales decreased by 6.1% to $260.0 million, impacted by a strategic pullforward of approximately $10 million in sales due to the S/4Hana ERP implementation[7] - Home & Personal Care segment reported a 1.4% increase in net sales to $348.1 million, with organic sales growth of 3.1% after excluding foreign currency impacts[11] - Operating income rose significantly to $44.7 million, up from $25.0 million, indicating a year-over-year increase of 78.8%[31] - Net income from continuing operations was $24.6 million, compared to $17.5 million in the previous year, marking an increase of 40.0%[31] - Basic earnings per share from continuing operations increased to $0.87, up from $0.51, representing a growth of 70.6%[31] - Total net sales increased to $700.2 million for the three months ended December 29, 2024, up 1.2% from $692.2 million in the same period last year[35] - The adjusted EBITDA for the three months ended December 29, 2024, was $77.8 million, down from $84.3 million in the prior year, resulting in an adjusted EBITDA margin of 11.1% compared to 12.2%[38] - Diluted EPS from continuing operations, as adjusted, increased to $1.02 for the three months ended December 29, 2024, compared to $0.63 for the same period in 2023[42] Cash Flow and Liquidity - As of the end of the quarter, the company had a cash balance of $180 million and total liquidity of $670.7 million, with net debt of approximately $395.2 million[13] - Cash, cash equivalents, and restricted cash decreased to $182.0 million at the end of the period from $445.4 million at the end of the previous year[32] - Net cash used by operating activities from continuing operations was $(71.9) million for the three months ended December 29, 2024, compared to $18.1 million for the same period in 2023[32] Strategic Initiatives - The company maintains its fiscal 2025 earnings framework, expecting low single-digit net sales growth and mid to high single-digit adjusted EBITDA growth[14] - The company is focusing on minimizing tariff impacts by pivoting production out of China and working with suppliers and retailers to offset tariff headwinds[4] - The company anticipates continued focus on strategic initiatives to improve financial performance and operational efficiency[25] - The company aims to optimize its operations and may pursue acquisitions or divestitures to enhance business performance[28] Inventory and Assets - Inventories rose to $507.4 million as of December 29, 2024, compared to $462.1 million as of September 30, 2024, indicating a 9.8% increase[33] - Total assets decreased to $3,614.6 million as of December 29, 2024, down from $3,842.3 million as of September 30, 2024[33] - The total current liabilities decreased to $587.2 million as of December 29, 2024, from $687.1 million as of September 30, 2024[33] Risks and Challenges - Future operations may be impacted by various risks, including economic conditions and geopolitical events, which could affect financial results[27]

Spectrum Brands Holdings, Inc. (SPB) is expected to register top and bottom-line growth when it reports first-quarter fiscal 2025 results on Feb. 6, 2025, before the opening bell. The Zacks Consensus Estimate for SPB’s revenues is pegged at $701.5 million, indicating a rise of 1.4% from the year-ago quarter's actual.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The Zacks Consensus Estimate for Spectrum Brands’ earnings per share (EPS) is pegged at 91 cents, indicating an increase ...

Spectrum Brands Holdings Inc. (SPB) is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 15.78X, higher than the industry average of 12.48X. This premium valuation raises concerns about whether SPB can meet investor expectations, especially considering its low Value Score of D, which suggests that it may not be a strong value proposition at current levels.SPB Stock's P/E Performance Image Source: Zacks Investment Research Spectrum Brands shares have declined 2.4% over the past three m ...

Spectrum Brands Holdings Inc. (SPB) reported fourth-quarter fiscal 2024 results, wherein the top line surpassed the Zacks Consensus Estimate but the bottom line missed. While sales increased year over year, earnings dipped.SPB’s shares fell more than 8% in trading hours today on soft earnings results in the reported quarter. Shares of this Zacks Rank #4 (Sell) company have lost 2.9% in the past three months against the industry's 1.3% rise.The company’s businesses reverted to growth in the second half of th ...