Core Insights - Energizer Holdings, Inc. (ENR) reported strong third-quarter fiscal 2025 results, with both net sales and earnings exceeding the Zacks Consensus Estimate, and showing year-over-year growth [1][3] - The company's Project Momentum, aimed at enhancing margins and operational agility, has been effective, contributing to organic sales growth and improved gross margins [2][9] Financial Performance - Adjusted earnings per share (EPS) for the third quarter were $1.13, surpassing the Zacks Consensus Estimate of 61 cents, and reflecting a 43% increase from the previous year [3][9] - Net sales reached $725.3 million, exceeding the Zacks Consensus Estimate of $702 million, and representing a 3.4% year-over-year increase [3][9] - Organic net sales saw a slight increase of 0.1% year over year, driven by a 1.7% growth in volume, primarily from the Battery & Lights category [4][3] Segment Performance - The Batteries & Lights segment reported a 5.1% increase in net sales to $535.1 million, with segment profit rising 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 for the third quarter was $325.0 million, an 11.7% increase year over year, with adjusted gross margin expanding by 330 basis points to 44.8% [6][10] - The margin improvement was attributed to $33.9 million in production credits and approximately $12 million in cost savings from Project Momentum, despite higher product costs and operational inefficiencies [6][10] SG&A and Advertising Expenses - Adjusted Selling, General and Administrative (SG&A) expenses rose 4.4% year over year to $123.6 million, influenced by costs from the APS NV acquisition and investments in digital transformation [7][8] - Advertising and Promotion (A&P) expenses increased by $5.5 million, accounting for 6% of net sales, up from 5.4% in the previous year [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, with organic net sales anticipated to be flat to up 2% [14][15] - The company has raised its full-year adjusted EPS guidance to a range of $3.55 to $3.65, compared to the previous estimate of $3.30 to $3.50 [15] - Fourth-quarter net sales growth is projected between 2% and 4%, with organic net sales expected to be flat to down 2% [16][17]

Financial Data and Key Metrics Changes - The company reported a flat net sales for the second quarter, while organic revenue increased by 1.4%, marking the fourth consecutive quarter of organic growth [12][7] - Adjusted earnings per share (EPS) reached $0.67, at the upper end of the guidance range [7][14] - Adjusted gross margin increased by 30 basis points to 40.8%, driven by project momentum savings [13] - Free cash flow declined by $44.1 million year over year, primarily due to investments in inventory and capital expenditures [14][15] Business Line Data and Key Metrics Changes - The battery business experienced a strong performance with 3% organic growth, benefiting from distribution wins in the U.S. and strong international results [9][12] - Auto care saw strong growth in appearance and air freshener segments, with the appearance business delivering 5.5% organic growth, driven by the new Podium Series product line [10][12] - Overall, the auto business declined approximately 2.5% organically, attributed to a shift in refrigerant shipment timing [10][12] Market Data and Key Metrics Changes - The battery category is expected to deliver low single-digit growth over the long term, although weakened consumer confidence may pressure volumes in the short term [23] - In auto care, consumer caution is anticipated to have mixed impacts, with some consumers shifting to DIY categories while others prioritize spending in less discretionary categories [23] Company Strategy and Development Direction - The company is focused on distribution, innovation, digital commerce, pricing and revenue management, and market expansion to drive growth [8] - Strategic acquisitions have been made to enhance manufacturing capabilities and improve supply chain resilience [20] - The company aims to reduce exposure to tariffs through sourcing shifts and pricing adjustments [25][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs and changing consumer sentiment, emphasizing the need to stay close to consumers [18][23] - The outlook for the remainder of the year has been tempered due to anticipated consumer pullback and inflationary pressures [24][30] - The company expects reported and organic net sales for the full year to be flat to up 2%, with adjusted EBITDA and EPS reflecting positive growth [30][31] Other Important Information - The company refinanced its $500 million revolving credit facility, extending maturities and improving debt portfolio flexibility [14] - The recent acquisition of APS in Europe is expected to enhance scale and manufacturing capabilities in key markets [69] Q&A Session Summary Question: Follow-up on tariff commentary and mitigation impacts - Management clarified that they have mitigated the impact of tariffs for fiscal year 2025 and are working on strategies to address future exposures [36][39] Question: Evaluation of devices using batteries and impact on forecasts - Management acknowledged that higher prices for devices could lead to consumer pullback, impacting battery replenishment cycles [50][53] Question: Retailer destocking and its impact - Management noted a slight uptick in retailer inventory due to softer sales, which is expected to normalize over time [65][66] Question: Details on the APS acquisition - The acquisition is expected to enhance the company's manufacturing capabilities and will involve transitioning from Panasonic to Energizer branding [69] Question: Long-term leverage target - The company aims to reduce leverage to below four times, with debt paydown being a top priority [108]

Financial Data and Key Metrics Changes - The company reported a flat net sales for the second quarter, while organic revenue increased by 1.4%, marking the fourth consecutive quarter of organic growth [12][7] - Adjusted earnings per share (EPS) reached $0.67, at the upper end of the guidance range [7][14] - Adjusted gross margin increased by 30 basis points to 40.8%, driven by project momentum savings [13] - Free cash flow declined by $44.1 million year over year, primarily due to investments in inventory and capital expenditures [14][15] Business Line Data and Key Metrics Changes - The battery business experienced a strong performance with 3% organic growth, benefiting from distribution wins in the U.S. and strong international results [9][12] - Auto care saw strong growth in appearance and air freshener segments, with the appearance business delivering 5.5% organic growth, driven by the new Podium Series product line [10][12] - Overall, the auto business declined by approximately 2.5% organically, attributed to a shift in refrigerant shipment timing [10][12] Market Data and Key Metrics Changes - The battery category is expected to deliver low single-digit growth over the long term, although weakened consumer confidence may pressure volumes in the short term [23] - In auto care, consumer caution is anticipated to have mixed impacts, with some consumers shifting to DIY categories while others prioritize spending on less discretionary items [23] Company Strategy and Development Direction - The company is focused on distribution, innovation, digital commerce, pricing and revenue management, and market expansion to drive growth [8] - Strategic acquisitions have been made to enhance manufacturing capabilities and improve supply chain resilience [20] - The company aims to reduce exposure to tariffs through sourcing shifts and pricing adjustments, with a clear path to mitigate impacts over the next twelve months [28][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs and changing consumer sentiment, emphasizing the need to stay close to consumers [18][23] - The outlook for the remainder of the year has been tempered due to recent volatility and consumer caution [24][30] - The company expects reported and organic net sales for the full year to be flat to up 2%, with adjusted EBITDA and EPS reflecting positive growth at the midpoint [30][31] Other Important Information - The company has refinanced its $500 million revolving credit facility, extending maturities and improving the weighted average maturity of its total debt portfolio [14] - The recent acquisition of APS in Europe is expected to enhance scale and manufacturing capabilities, transitioning from Panasonic to Energizer brands over the next eight months [69] Q&A Session Summary Question: Follow-up on tariff mitigation impacts - Management clarified that they have mitigated the impact of tariffs for fiscal year 2025 and are working on strategies to address future exposures [36][39] Question: Evaluation of devices using batteries and pricing impacts - Management acknowledged that higher prices for devices could lead to consumer pullback, impacting battery replenishment cycles [50][53] Question: Retailer destocking and its impact - Management noted a slight uptick in retailer inventory due to softer sales, but does not expect it to be significant [65][66] Question: Insights on the APS acquisition - The acquisition is expected to enhance the company's European business and manufacturing capabilities, with a transition to Energizer branding planned [68][69] Question: Long-term leverage target - The company aims to reduce leverage to below four times, with debt paydown as a top priority [108]

Financial Data and Key Metrics Changes - The company reported organic sales growth of nearly 1.5% for the fourth consecutive quarter, with adjusted earnings per share of $0.67 at the upper end of the guided range [6][12] - Adjusted gross margin increased by 30 basis points to 40.8%, driven by project momentum savings of $16 million [12] - Free cash flow declined by $44.1 million year over year, primarily due to investments in inventory and capital expenditures [13][14] Business Line Data and Key Metrics Changes - The battery business experienced strong performance with 3% organic growth, benefiting from distribution wins and strong international results [8][11] - Auto care saw a 5.5% organic growth in the appearance segment, driven by the launch of the new Podium Series product line, although overall auto care declined by approximately 2.5% due to shipment timing [9][11] Market Data and Key Metrics Changes - The battery category is expected to deliver low single-digit growth over the long term, but weakened consumer confidence may pressure volumes in the short term [21] - In auto care, consumer caution is expected to have mixed impacts, with some consumers shifting to DIY categories while others prioritize spending in less discretionary categories [21] Company Strategy and Development Direction - The company is focused on distribution, innovation, digital commerce, pricing, revenue management, and market expansion to drive fiscal 2025 results [7] - Strategic acquisitions and investments in supply chain transformation are aimed at improving cost, agility, and resiliency, particularly in response to tariff impacts [17][18] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in navigating the current macroeconomic challenges, emphasizing the importance of understanding consumer sentiment and spending behavior [20][25] - The outlook for the remainder of fiscal 2025 has been tempered due to recent volatility and consumer caution, with expectations for flat to 2% growth in reported and organic net sales [26][27] Other Important Information - The company has refinanced its $500 million revolving credit facility, extending maturities and improving the weighted average maturity of its total debt portfolio [13] - The recent acquisition of APS in Europe is expected to enhance scale and manufacturing capabilities, transitioning from Panasonic to Energizer brands over the next eight months [59] Q&A Session Summary Question: Can you run through the mitigation impacts of tariffs? - Management clarified that they have mitigated the impact of tariffs for fiscal 2025 and are working on plans to reduce exposure for fiscal 2026, aiming to offset most of the $150 million gross exposure [31][33][34] Question: What is the evaluation of devices that use batteries in light of potential price increases? - Management acknowledged that higher prices for devices could lead to consumer pullback, impacting battery replenishment cycles, but emphasized ongoing communication with OEM partners [44][45] Question: Have you seen any retailer destocking? - Management noted a slight uptick in retailer inventory due to softer point-of-sale sales, but did not consider it significant [55][56] Question: Can you provide details on the APS acquisition? - The acquisition is expected to enhance the company's European business scale and manufacturing capabilities, with a transition from Panasonic to Energizer brands planned [58][59] Question: What is the long-term leverage target? - The company aims to reduce leverage to below four times, with debt paydown being a top priority [98]

Financial Data and Key Metrics Changes - The company reported organic net sales growth of nearly 4% for Q1 fiscal 2025, with adjusted earnings per share increasing by 14% [6][20] - Adjusted gross margin expanded by 50 basis points to 40% [6][18] - Reported net sales were up 2.1%, with organic revenue increasing 3.8% [17][20] - The company paid down $25 million of debt, marking the 10th consecutive quarter of debt reduction [6][20] Business Line Data and Key Metrics Changes - The battery business achieved 4% organic growth, driven by distribution gains and $10 million of hurricane-related sales [17][20] - The auto care segment saw organic growth of 2%, supported by distribution gains and international market expansion [10][18] Market Data and Key Metrics Changes - The battery category volume remained positive both globally and in the U.S., with improving value trends [9][10] - The auto care category showed strong fundamentals, including an increase in the age of the car park and a shift towards DIY car care activities [10] Company Strategy and Development Direction - The company is focused on five strategic growth initiatives: distribution, pricing and revenue management, market expansion, innovation, and digital economy [12][66] - Project Momentum is expected to generate total savings of approximately $60 million for the year and $200 million for the program [11][22] - The company plans to continue investing in growth areas, including digital transformation and product innovation [12][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic initiatives and raised the full-year organic sales guidance to 2% to 3% [20][22] - The consumer environment is described as stable but cautious, with a focus on value-seeking behavior [50][51] - The company anticipates consistent organic growth driven by distribution gains and new product launches [20][22] Other Important Information - The company expects adjusted gross margin expansion of 50 basis points to more than 41% for the full year [22] - Capital expenditures are projected to be in the range of $80 million to $90 million, focusing on IT, operations, and sustainable packaging initiatives [22] Q&A Session Summary Question: Impact of tariffs on manufacturing - Management noted that domestic manufacturing helps minimize exposure to tariffs, with only about 5% of COGS sourced from China [30][32] Question: Consumer behavior during the holiday season - Management described the holiday season as solid, with varying consumer shopping patterns, leading to confidence in raising the sales outlook [34][35] Question: Input cost pressures - Management indicated mixed input cost pressures, with some materials seeing cost increases while others provide modest benefits [41][42] Question: E-commerce growth and competition - E-commerce is a growing source of revenue, with expectations of 30% growth in that segment for fiscal 2025 [93] Question: Distribution gains and shelf space - Distribution gains are broad-based, with some coming from expanded shelf space and others from displacing competitors [60][80]