Why Is Energizer (ENR) Up 12.8% Since Last Earnings Report?

Core Viewpoint - Energizer Holdings reported mixed results in its fourth-quarter fiscal 2025 earnings, with net sales exceeding estimates but earnings per share falling short, leading to concerns about future performance and organic sales decline [2][3][12]. Financial Performance - Adjusted earnings per share were $1.05, missing the Zacks Consensus Estimate of $1.12, and decreased by 13.9% year over year [2]. - Net sales reached $832.8 million, surpassing the Zacks Consensus Estimate of $831 million, and increased by 3.4% from the previous year [3]. - Organic net sales declined by 2.2% year over year, primarily due to a 2.9% decrease in volumes linked to softer consumer demand in North America [4]. Segment Performance - The Batteries & Lights segment saw net sales increase by 3.9% to $677.2 million, but segment profit decreased by 15.4% to $151.8 million [5]. - The Auto Care segment's net sales rose by 1% to $155.6 million, with segment profit increasing by 29% to $25.8 million [5]. Margin and Cost Analysis - Adjusted gross profit was $320.3 million, down 5.7% year over year, with adjusted gross margin contracting by 370 basis points to 38.5% due to higher input costs and production inefficiencies [6]. - Adjusted SG&A expenses increased by 4.2% year over year to $128.2 million, driven by additional costs from the APS business and higher investments in digital transformation [8]. - Adjusted EBITDA was $171.2 million, down 8.6% year over year, with the adjusted EBITDA margin decreasing by 260 basis points to 20.6% [9]. Financial Health - As of September 30, 2025, cash and cash equivalents were $236.2 million, with long-term debt at $3.41 billion and shareholders' equity of $169.9 million [11]. - Operating cash flow for the fiscal fourth quarter was $147.1 million, and free cash flow was $63.2 million [11]. Future Outlook - For fiscal 2026, the company anticipates organic net sales to be flat to slightly higher, with a modest decline in gross margin expected [12]. - Adjusted earnings per share are projected to range from $3.30 to $3.60, with adjusted EBITDA expected between $580 million and $610 million [13]. - The first quarter is expected to reflect a difficult sales comparison, with organic net sales anticipated to decline by a high single-digit percentage [13]. Market Position - Estimates for Energizer have trended downward, leading to a Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [16]. - In comparison, National Vision, a peer in the consumer products industry, has seen a 14.9% increase in stock price over the past month, with positive earnings growth [17].