Why Is Energizer (ENR) Down 5.2% Since Last Earnings Report?

Core Viewpoint - Energizer Holdings reported strong Q3 fiscal 2025 results, with both net sales and earnings exceeding estimates, indicating potential for future growth despite recent stock underperformance [2][3]. Financial Performance - Adjusted earnings per share were $1.13, surpassing the Zacks Consensus Estimate of 61 cents, and increased by 43% year-over-year [3]. - Net sales reached $725.3 million, exceeding the Zacks Consensus Estimate of $702 million, and grew by 3.4% compared to the previous year [3]. - Organic net sales saw a modest increase of 0.1% year-over-year, driven by a 1.7% growth in volume, primarily from the Battery & Lights category [4]. Segment Performance - The Batteries & Lights segment net sales increased by 5.1% year-over-year to $535.1 million, with segment profit rising by 22.7% to $158.8 million [5]. - Conversely, the Auto Care segment experienced a 1.1% decline in net sales to $190.2 million, with segment profit decreasing by 10.1% to $24.1 million [5]. Margin and Cost Analysis - Adjusted gross profit was $325.0 million, an 11.7% increase year-over-year, with adjusted gross margin expanding by 330 basis points to 44.8% [6]. - Adjusted SG&A expenses rose by 4.4% year-over-year to $123.6 million, influenced by costs from the APS NV acquisition and investments in digital transformation [7]. - Adjusted EBITDA was $171.4 million, reflecting a 14.5% year-over-year increase, with the adjusted EBITDA margin increasing by 230 basis points to 23.6% [9]. Financial Health - As of June 30, 2025, cash and cash equivalents stood at $171.1 million, with long-term debt of $3.22 billion and shareholders' equity of $183.2 million [10]. - Operating cash flow for the fiscal third quarter was $85.6 million, and free cash flow was $16.5 million [10]. - The company repurchased 2.8 million shares for $62.6 million during the third quarter, with additional repurchases following the quarter [10]. Future Outlook - For fiscal year 2025, Energizer expects net sales growth of 1% to 3%, including $40 to $50 million from the APS NV acquisition [11]. - The company raised its full-year adjusted earnings per share guidance to $3.55 to $3.65, up from the previous estimate of $3.30 to $3.50 [12]. - For Q4, reported net sales growth is projected between 2% and 4%, while organic net sales are expected to be flat to down 2% [13]. Market Sentiment - Recent estimates for Energizer have trended downward, with a consensus estimate shift of -21.04% [14]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [16].