We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Energizer (ENR) Down 7.3% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Energizer Holdings (ENR - Free Report) . Shares have lost about 7.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Shares of Energizer Holdings, Inc. bottom line beat the Zacks Consensus Estimate but the top line missed the same. However, the company’s top line declined year over year.
Q2 Metrics
Energizer’s adjusted earnings of 64 cents per share beat the Zacks Consensus Estimate of 51 cents and increased 36% from the year-ago quarter’s reported figure. The bottom line also surpassed our consensus estimate of 50 cents.
It reported net sales of $684.1 million, falling short of the Zacks Consensus Estimate of $687 million and our estimate of $685.5 million. The top line also decreased 0.2% from the year-ago quarter’s reading. However, organic sales increased 2.6% in the quarter under review. This rise was driven by continued benefit of global pricing actions in the battery and auto care businesses, which contributed approximately 13% to organic sales. This upside was partially offset by declining volumes and management’s decision to exit certain low-margin profile battery customers and products, which further contributed to the decline.
Segments in Detail
On Oct 1, 2021, Energizer changed its segments from the two geographies of Americas and International to two reporting units, namely Battery & Lights, and Auto Care. The move followed the acquisition of Spectrum Brands’ Battery and Auto Care units in the first quarter of fiscal 2022.
Energizer’s Batteries & Lights segment’s revenues dipped from $516.5 million year over year to $505.9 million in second-quarter fiscal 2023 and lagged the consensus mark of $517.7 million. Meanwhile, revenues in the Auto Care segment increased from $168.9 million to $178.2 million and beat the consensus mark of $167.7 million.
Margins
In the fiscal second quarter, Energizer’s adjusted gross margin expanded 300 basis points to 37.9%. This was mainly backed by continued gains from the pricing initiatives, Project Momentum savings of $10.7 million and favorable impact from exiting lower-margin businesses. Increased operating expenses, including material and ocean freight costs, inflationary trends, and currency headwinds, partly offset the increase.
Excluding restructuring costs, the company’s adjusted selling, general and administrative (SG&A) cost as a rate of sales was 17% compared with the 17.2% recorded in the prior-year quarter. On a dollar basis, SG&A declined from $117.6 million to $116.5 million due to Project Momentum savings and favorable currency impacts. This was somewhat offset by increased stock-compensation amortization and factoring fees. Adjusted EBITDA was $139.5 million, up 21.7% year over year.
Other Financial Details
As of Mar 31, 2023, Energizer’s cash and cash equivalents were $193.7 million, with long-term debt of $3,414.6 million and shareholders' equity of $148.4 million. In the first half of fiscal 2023, it paid more than $158.2 million of debt, reducing its leverage by 1/2 turn year over year. In the reported quarter, it paid out a dividend of nearly $22 million.
The operating cash flow for the first half of 2023 was $210.2 million and the free cash flow was $192.2 million.
Outlook
We note that Project Momentum is on track, delivering savings of about $20 million in the first half of fiscal 2023. It anticipates generating overall project savings of $30-$40 million for the year. The one-time project expenses for the current fiscal year are likely to be $25-$35 million and capital expenditure is expected to be $15-$20 million. The company is on track to generate total savings and one-time expenses over the life of the program.
Management reaffirmed its guidance for fiscal 2023. Energizer projects organic revenues to grow in low-single digits for the current fiscal year. The company anticipates a low-single-digit decline for reported revenues. It expects currency headwinds on pre-tax earnings of $20 million and 22 cents per share, based on the current rates.
Adjusted EBITDA is forecast to be $585-$615 million. Management envisions adjusted earnings per share of $3-$3.30 for the current fiscal year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -25.64% due to these changes.
VGM Scores
At this time, Energizer has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Energizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Energizer (ENR) Down 7.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Energizer Holdings (ENR - Free Report) . Shares have lost about 7.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Energizer Q2 Earnings Beat Estimates, Sales Dip Y/Y
Shares of Energizer Holdings, Inc. bottom line beat the Zacks Consensus Estimate but the top line missed the same. However, the company’s top line declined year over year.
Q2 Metrics
Energizer’s adjusted earnings of 64 cents per share beat the Zacks Consensus Estimate of 51 cents and increased 36% from the year-ago quarter’s reported figure. The bottom line also surpassed our consensus estimate of 50 cents.
It reported net sales of $684.1 million, falling short of the Zacks Consensus Estimate of $687 million and our estimate of $685.5 million. The top line also decreased 0.2% from the year-ago quarter’s reading. However, organic sales increased 2.6% in the quarter under review. This rise was driven by continued benefit of global pricing actions in the battery and auto care businesses, which contributed approximately 13% to organic sales. This upside was partially offset by declining volumes and management’s decision to exit certain low-margin profile battery customers and products, which further contributed to the decline.
Segments in Detail
On Oct 1, 2021, Energizer changed its segments from the two geographies of Americas and International to two reporting units, namely Battery & Lights, and Auto Care. The move followed the acquisition of Spectrum Brands’ Battery and Auto Care units in the first quarter of fiscal 2022.
Energizer’s Batteries & Lights segment’s revenues dipped from $516.5 million year over year to $505.9 million in second-quarter fiscal 2023 and lagged the consensus mark of $517.7 million. Meanwhile, revenues in the Auto Care segment increased from $168.9 million to $178.2 million and beat the consensus mark of $167.7 million.
Margins
In the fiscal second quarter, Energizer’s adjusted gross margin expanded 300 basis points to 37.9%. This was mainly backed by continued gains from the pricing initiatives, Project Momentum savings of $10.7 million and favorable impact from exiting lower-margin businesses. Increased operating expenses, including material and ocean freight costs, inflationary trends, and currency headwinds, partly offset the increase.
Excluding restructuring costs, the company’s adjusted selling, general and administrative (SG&A) cost as a rate of sales was 17% compared with the 17.2% recorded in the prior-year quarter. On a dollar basis, SG&A declined from $117.6 million to $116.5 million due to Project Momentum savings and favorable currency impacts. This was somewhat offset by increased stock-compensation amortization and factoring fees. Adjusted EBITDA was $139.5 million, up 21.7% year over year.
Other Financial Details
As of Mar 31, 2023, Energizer’s cash and cash equivalents were $193.7 million, with long-term debt of $3,414.6 million and shareholders' equity of $148.4 million. In the first half of fiscal 2023, it paid more than $158.2 million of debt, reducing its leverage by 1/2 turn year over year. In the reported quarter, it paid out a dividend of nearly $22 million.
The operating cash flow for the first half of 2023 was $210.2 million and the free cash flow was $192.2 million.
Outlook
We note that Project Momentum is on track, delivering savings of about $20 million in the first half of fiscal 2023. It anticipates generating overall project savings of $30-$40 million for the year. The one-time project expenses for the current fiscal year are likely to be $25-$35 million and capital expenditure is expected to be $15-$20 million. The company is on track to generate total savings and one-time expenses over the life of the program.
Management reaffirmed its guidance for fiscal 2023. Energizer projects organic revenues to grow in low-single digits for the current fiscal year. The company anticipates a low-single-digit decline for reported revenues. It expects currency headwinds on pre-tax earnings of $20 million and 22 cents per share, based on the current rates.
Adjusted EBITDA is forecast to be $585-$615 million. Management envisions adjusted earnings per share of $3-$3.30 for the current fiscal year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -25.64% due to these changes.
VGM Scores
At this time, Energizer has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Energizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.