Financial Data and Key Metrics Changes - The company reported a strong third quarter with results exceeding expectations, reflecting efforts to strengthen the business and restore margins [7][11] - Adjusted EPS is now expected to be between $3.55 and $3.65, with adjusted EBITDA projected between $630 million and $640 million [11] - The company returned $84 million to shareholders through dividends and share repurchases in the quarter [10] Business Line Data and Key Metrics Changes - The battery category performed well, while auto care was softer due to mild weather; however, the new podium series is performing strongly [8][14] - Organic sales were strong, with battery category growth contributing positively, while auto care showed a slight decline [18] Market Data and Key Metrics Changes - The impact of tariffs on the business has improved significantly, with current rates lower than previously guided [8] - The company expects production credits to contribute $35 million to $40 million annually to gross margin, net earnings, and free cash flow [9][19] Company Strategy and Development Direction - The company is focused on restoring margins, investing in growth, and building a more agile operation [7] - The acquisition of Advanced Power Solutions is expected to enhance manufacturing capabilities and mitigate tariff impacts [10][29] - The company is prioritizing debt reduction while also evaluating opportunities for share repurchase and capital allocation [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering fiscal 2025 outlook and continued earnings growth into fiscal 2026 [11] - The company noted that consumer behavior is cautious, but the battery category remains resilient [90] Other Important Information - The company has made significant investments in production and digital transformation, with expectations of generating 10% to 12% free cash flow compared to sales over the next couple of years [32][38] - The company has seen a stable competitive landscape, with private label shares remaining flat [44] Q&A Session Summary Question: Key fundamental drivers for the quarter and next - Management highlighted organic growth, gross margin improvement, and earnings growth as key drivers [14][15] Question: Details on production credits - Production credits are expected to contribute significantly to earnings without requiring additional investment [22] Question: Impact of the Advanced Power Solutions acquisition - The acquisition is part of a broader strategy to enhance manufacturing capabilities and optimize costs [29][30] Question: Capital allocation outlook - The company plans to prioritize debt reduction while remaining flexible in capital allocation strategies [35][36] Question: Competitive landscape and holiday outlook - Management noted stable market shares and a normal holiday season is anticipated, with adjustments for earlier shopping patterns [44][46] Question: Consumer inventory levels - Retailer inventory levels are slightly elevated, while consumer inventory levels are lighter due to stretched purchase cycles [88] Question: Pricing impact from tariffs - Pricing adjustments related to tariffs have been negotiated with retailers and are expected to show benefits in Q4 [68][92]

Core Insights - Energizer Holdings, Inc. reported strong financial performance for the third fiscal quarter ended June 30, 2025, exceeding expectations in net sales, adjusted gross margin, and adjusted earnings per share [1][2] - The company has improved its outlook for full-year net sales, adjusted EBITDA, and adjusted earnings per share, projecting a growth of 7% to 10% in adjusted earnings per share for fiscal year 2025 [1][2] Financial Performance - Net sales for the quarter reached $725.3 million, a 3.4% increase from $701.4 million in the prior year [3][4] - Organic net sales growth was modest at 0.1%, primarily driven by the acquisition of Advanced Power Solutions NV, which contributed $20.8 million to net sales [4][5] - Gross margin percentage improved significantly to 55.1% from 39.5% in the prior year, aided by $112.4 million in production credits related to U.S. battery production [5][8] Earnings and Adjusted Metrics - Reported earnings per share (EPS) was $2.13, compared to a loss of $0.61 in the prior year, while adjusted EPS increased by 43% year-over-year to $1.13 [11][12] - Adjusted EBITDA for the quarter was $171.4 million, up from $149.7 million in the previous year [11] Cost Management and Expenses - Selling, General and Administrative (SG&A) expenses were 17.0% of net sales, totaling $123.6 million, slightly up from 16.9% in the prior year [9] - Advertising and Promotion (A&P) expenses increased to 6.0% of net sales, driven by investments in the launch of the Podium Series [10] Future Outlook - The company has raised its fiscal 2025 guidance for adjusted earnings per share to a range of $3.55 to $3.65, with adjusted EBITDA expected between $630 million and $640 million [15][16] - For the fourth quarter, reported net sales growth is anticipated to be between 2% and 4%, with organic net sales expected to be flat to down 2% [16]