Investors with an interest in Consumer Products - Discretionary stocks have likely encountered both Spectrum Brands (SPB) and VIZIO Holding Corp. (VZIO) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out. The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style ...

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Spectrum Brands Holdings Inc. (SPB) reported mixed third-quarter fiscal 2024 results, wherein the top line surpassed the Zacks Consensus Estimate but the bottom line missed. Both metrics rose year over year. Results gained from cost improvements, sturdy e-commerce business and reduced inventory. The company is focused on boosting top-line growth via commercial investments. It has been significantly investing in brand-focused advertising, marketing and innovation. In the reported quarter, it made investments ...

Financial Data and Key Metrics Changes - The company reported a net sales growth of 6% and organic sales growth of 7.1% for the quarter, driven primarily by volume increases across all business units [7][23] - Adjusted EBITDA increased to $106.3 million, up from $99 million a year ago, reflecting strong performance across all three business units [9][24] - Gross profit margin improved to 38.9%, an increase of 310 basis points compared to the prior year, attributed to operational efficiencies and cost savings [10][24] Business Line Data and Key Metrics Changes - Home & Garden business achieved a remarkable 13.1% top-line growth, benefiting from improved weather conditions and increased retail inventory health [7][30] - Global Pet Care organic sales grew by 4.1%, with strong performance in e-commerce contributing to the growth [8][29] - Home & Personal Care reported a 3.5% increase in net sales, with e-commerce sales growing over 33% [34][36] Market Data and Key Metrics Changes - E-commerce sales represented over 21% of total net sales for the quarter, with all business units experiencing double-digit growth in this channel [9][34] - The company noted improved retail inventory levels, which were healthier than the previous year, positively impacting sales alignment with point of sale [8][30] Company Strategy and Development Direction - The company is focused on driving top-line growth through brand-focused advertising, marketing, and innovation investments, with plans to invest approximately $50 million more for the full year [5][15] - The separation of the Home & Personal Care business is being actively pursued, with multiple bids received and a Form 10 registration statement filed for a potential spin-off [17][59] - The company aims to maintain a disciplined cost structure while investing in operational improvements and brand development to support future growth [11][15] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding geopolitical and macroeconomic uncertainties, including rising ocean freight rates and consumer health volatility [21][43] - The company anticipates continued sales growth in the fourth quarter, driven by favorable weather trends and strong e-commerce performance [20][61] - Management remains optimistic about the company's operational efficiency and strong balance sheet, which are expected to support future investments and growth [12][43] Other Important Information - The company repurchased 1.6 million shares during the quarter, returning over $1 billion to shareholders since the close of the HHI transaction [19][25] - The adjusted diluted EPS increased by $0.17 to $1.10, driven by higher adjusted EBITDA and a reduction in shares outstanding [24] Q&A Session Summary Question: What is the heavy lifting left after the HPC separation? - Management indicated that the separation will likely lead to a multiple uplift for the remaining company, and they plan to focus on organic and inorganic growth post-separation [44][46] Question: Can you provide details on the increased marketing spend? - Management noted that approximately half of the $23 million increase in advertising spend was allocated to Home & Garden, with the remainder distributed among other business units [48][49] Question: How did hardware compare to consumables in the Pet segment? - Management highlighted that while durable goods faced challenges, consumables showed growth, particularly in e-commerce, which is expected to continue [51][52] Question: What are the expectations for free cash flow moving forward? - Management expressed confidence that free cash flow will improve significantly as the company continues to manage working capital effectively and reduce interest expenses [63][64]

Financial Performance - Net sales increased by 60% to $7794 million in Q3 FY24 compared to $7355 million in Q3 FY23[12, 27] - Organic sales grew by 71% in Q3 FY24[7, 12] - Adjusted EBITDA increased to $1063 million in Q3 FY24 from $99 million in Q3 FY23[7, 12] Excluding $13 million of investment income, Adjusted EBITDA was $94 million[13] - The company delivered adjusted EBITDA including investment income of $1063 million, up from $99 million, while increasing investments in brands by almost $23 million[7] - GAAP Net Income was $191 million in Q3 FY24[12] Debt and Share Repurchases - The company retired $1174 billion in bonds with no future obligations for any of the HHI proceeds[7] - Issued $350 million, 5-year exchangeable senior, unsecured bonds at 3375%[7] - Net debt at the end of the quarter was $2716 million[7] - The company has approximately $400 million remaining on its $500 million share repurchase plan authorized in May 2024[9, 10] - Repurchased 132 million shares, reducing total shares outstanding by approximately 32%[9] Segment Performance - Global Pet Care (GPC) net sales increased by 36% to $2822 million in Q3 FY24[15, 27] Organic sales increased by 41%[16, 17] - Home & Garden (H&G) net sales increased by 131% to $211 million in Q3 FY24[18, 27] Organic sales increased by 130%[18] - Home & Personal Care (HPC) net sales increased by 35% to $2862 million in Q3 FY24[19, 27] Organic sales increased by 61%[19] FY24 Outlook - The company is targeting flat net sales versus last year and ~20% growth in adjusted EBITDA (without considering the impact of investment income)[21]

For the quarter ended June 2024, Spectrum Brands (SPB) reported revenue of $779.4 million, up 6% over the same period last year. EPS came in at $1.10, compared to $0.75 in the year-ago quarter. The reported revenue represents a surprise of +3.48% over the Zacks Consensus Estimate of $753.16 million. With the consensus EPS estimate being $1.35, the EPS surprise was -18.52%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine t ...

Spectrum Brands (SPB) came out with quarterly earnings of $1.10 per share, missing the Zacks Consensus Estimate of $1.35 per share. This compares to earnings of $0.75 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -18.52%. A quarter ago, it was expected that this holding company would post earnings of $0.49 per share when it actually produced earnings of $1.62, delivering a surprise of 230.61%. Over the last four quarters, t ...

In its upcoming report, Spectrum Brands (SPB) is predicted by Wall Street analysts to post quarterly earnings of $1.35 per share, reflecting an increase of 80% compared to the same period last year. Revenues are forecasted to be $753.16 million, representing a year-over-year increase of 2.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe. Be ...

Core Viewpoint - Spectrum Brands Holdings, Inc. (SPB) is anticipated to show significant bottom-line growth in its upcoming third-quarter fiscal 2024 results, with earnings per share expected to reach $1.35, reflecting an 80% increase year-over-year, despite a projected revenue decline of 2.4% to $753.2 million [1]. Group 1: Earnings Performance - In the last reported quarter, Spectrum Brands achieved an earnings surprise of 230.6%, with an average earnings surprise of 108.3% over the past four quarters [2]. - The Zacks Consensus Estimate for the upcoming quarter indicates a bottom-line growth, with earnings per share expected to be $1.35, up 80% from the previous year [1]. Group 2: Factors Influencing Results - The company's quarterly results are expected to benefit from the Global Productivity Improvement Plan, which focuses on enhancing operational efficiency and effectiveness through consumer insights and growth-enabling functions such as technology and marketing [3]. - Increased pricing, cost improvements, effective promotional activities, and a favorable product mix are likely to have positively impacted margins [4]. Group 3: Challenges and Market Conditions - Despite the anticipated growth, Spectrum Brands has been facing soft consumer demand, particularly in the small kitchen appliance category and North American aquatics, which may negatively affect top-line performance [5]. - The Home & Personal Care segment's sales are projected to decline by 1.8% year-over-year, indicating ongoing challenges in the market [5]. Group 4: Earnings Prediction Model - The Zacks model does not predict a definitive earnings beat for Spectrum Brands this time, as the company has an Earnings ESP of 0.00% and a Zacks Rank of 3 [6].

Core Insights - Spectrum Brands Holdings Inc. (SPB) is positioned for growth due to strategic efforts, including increased pricing, cost improvements, and a favorable product mix [1][8] - The company has faced challenges such as soft demand in small kitchen appliances and volume declines in certain pet channels, impacting its second-quarter fiscal 2024 results [2][10] - Despite these challenges, SPB projects flat reported sales year over year for fiscal 2024, with adjusted EBITDA expected to grow in the low-double digits [3] Financial Performance - In the second quarter of fiscal 2024, Spectrum Brands' top line fell by 1.5% year over year, while organic net sales dipped by 1.6% [2] - The Zacks Consensus Estimate for fiscal 2024 sales is $2.92 billion, indicating a growth of 0.1% year over year, while earnings per share (EPS) is estimated at $4.68, reflecting a significant growth of 205.9% [11] Strategic Initiatives - The company is implementing its Global Productivity Improvement Plan (GPIP) to enhance operational efficiency and effectiveness, focusing on consumer insights and growth-enabling functions [3][9] - Spectrum Brands is committed to improving operational efficiencies, streamlining its organizational structure, and solidifying liquidity while transforming into a pure-play global Pet and Home & Garden business [7] Market Position - Spectrum Brands has gained 9.6% in stock value over the past year, outperforming the industry, which saw a decline of 3.8% [12] - The company has been proactive in cost management, including fixed cost reductions and decreased advertising spending, to drive margins [8]