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Spectrum Brands (SPB) Q2 Earnings Top Estimates, Sales Down
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Spectrum Brands Holdings Inc. (SPB - Free Report) reported second-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Results gained from cost improvements, the exit of non-core unproductive categories, reduced inventory and improved fill rates across all businesses.
Shares of this current Zacks Rank #3 (Hold) company have gained 26.5% in the past six months compared with the industry's 18.2% growth.
Q2 Highlights
SPB reported adjusted earnings of $1.62 per share, which sharply beat the Zacks Consensus Estimate of 49 cents. The figure compares favorably with the year-ago quarter’s loss of 14 cents a share. This upside is mainly attributable to higher adjusted EBITDA margins.
Spectrum Brands' net sales fell 1.5% year over year to $718.5 million but surpassed the consensus estimate of $708 million. The decline was due to an organic net sales drop of 1.6%. Also, reduced sales in home appliances, lower volumes in Aquatics in North America and the impact of SKU rationalizations offset by stronger Controls sales contributed to the decline. However, favorable foreign currency impacts of $1.2 million acted as a tailwind.
Spectrum Brands Holdings Inc. Price, Consensus and EPS Surprise
The gross profit increased 27.5% year over year to $273.4 million, driven by lower cost inventory and inventory-related costs, cost improvements and positive mix. Meanwhile, the gross margin expanded 870 bps year over year to 38.1%.
Adjusted EBITDA advanced 120.2% year over year to $112.3 million in the fiscal second quarter. The adjusted EBITDA margin expanded 860 bps year over year to 15.6%, driven by better gross margins and lower operating expenses.
Segmental Performance
Sales in the Home & Personal Care segment dipped 4% year over year to $267.9 million due to lower sales in small kitchen appliances, offset by growth in Personal Care. Sales in EMEA rose, backed by growth in Personal Care offsetting sales declines in small kitchen appliances. Excluding the $1 million of adverse currency translations, organic net sales fell 3.7%.
The Global Pet Care segment's sales were down 2.3% year over year to $289.9 million, driven by persistent softness in the aquatics category in North America and the exit of lower-profit SKUs. Global companion animal sales were almost flat despite the impacts of exiting SKUs. Sales in EMEA rose on growth in the Companion Animal and Aquatics categories. Excluding the $2.2-million impact of favorable foreign currency, organic sales fell 3%.
The segment's adjusted EBITDA grew 34.6% year over year to $62.3 per share while the adjusted EBITDA margin expanded 590 bps to 21.5%, driven by lower cost inventory year over year, inventory-related expenses and cost-reduction efforts.
The Home & Garden segment's sales rose 4.8% year over year to $160.7 million, mainly backed by increased sales in the Controls business. Sales in the Cleaning category fell as consumer demand for a few product lines within this category was soft.
The segment's adjusted EBITDA of $29.2 million soared 93.4% from the year-ago quarter, driven by increased sales, manufacturing efficiencies and lower operational costs, offset by elevated investments in innovation and advertising.
Other Financials
As of Mar 31, 2024, the company’s cash balance was $745.7 million, with an outstanding debt of $1.4 billion, including $1.3 billion of senior unsecured notes and $84 million of finance leases. It exited the quarter with a net debt of about $155 million.
Guidance
Spectrum Brands now projects reported sales to remain flat year over year. Adjusted EBITDA, excluding the investment income, is likely to grow in the low-double digits.
Ralph Lauren has a trailing four-quarter earnings surprise of 18.7%, on average. The Zacks Consensus Estimate for RL’s fiscal 2024 earnings per share (EPS) indicates an increase of 22.7% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 28.3%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 14.5% and 47.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank # 2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 13.7% and 15%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.
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Spectrum Brands (SPB) Q2 Earnings Top Estimates, Sales Down
Spectrum Brands Holdings Inc. (SPB - Free Report) reported second-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Results gained from cost improvements, the exit of non-core unproductive categories, reduced inventory and improved fill rates across all businesses.
Shares of this current Zacks Rank #3 (Hold) company have gained 26.5% in the past six months compared with the industry's 18.2% growth.
Q2 Highlights
SPB reported adjusted earnings of $1.62 per share, which sharply beat the Zacks Consensus Estimate of 49 cents. The figure compares favorably with the year-ago quarter’s loss of 14 cents a share. This upside is mainly attributable to higher adjusted EBITDA margins.
Spectrum Brands' net sales fell 1.5% year over year to $718.5 million but surpassed the consensus estimate of $708 million. The decline was due to an organic net sales drop of 1.6%. Also, reduced sales in home appliances, lower volumes in Aquatics in North America and the impact of SKU rationalizations offset by stronger Controls sales contributed to the decline. However, favorable foreign currency impacts of $1.2 million acted as a tailwind.
Spectrum Brands Holdings Inc. Price, Consensus and EPS Surprise
Spectrum Brands Holdings Inc. price-consensus-eps-surprise-chart | Spectrum Brands Holdings Inc. Quote
The gross profit increased 27.5% year over year to $273.4 million, driven by lower cost inventory and inventory-related costs, cost improvements and positive mix. Meanwhile, the gross margin expanded 870 bps year over year to 38.1%.
Adjusted EBITDA advanced 120.2% year over year to $112.3 million in the fiscal second quarter. The adjusted EBITDA margin expanded 860 bps year over year to 15.6%, driven by better gross margins and lower operating expenses.
Segmental Performance
Sales in the Home & Personal Care segment dipped 4% year over year to $267.9 million due to lower sales in small kitchen appliances, offset by growth in Personal Care. Sales in EMEA rose, backed by growth in Personal Care offsetting sales declines in small kitchen appliances. Excluding the $1 million of adverse currency translations, organic net sales fell 3.7%.
The Global Pet Care segment's sales were down 2.3% year over year to $289.9 million, driven by persistent softness in the aquatics category in North America and the exit of lower-profit SKUs. Global companion animal sales were almost flat despite the impacts of exiting SKUs. Sales in EMEA rose on growth in the Companion Animal and Aquatics categories. Excluding the $2.2-million impact of favorable foreign currency, organic sales fell 3%.
The segment's adjusted EBITDA grew 34.6% year over year to $62.3 per share while the adjusted EBITDA margin expanded 590 bps to 21.5%, driven by lower cost inventory year over year, inventory-related expenses and cost-reduction efforts.
The Home & Garden segment's sales rose 4.8% year over year to $160.7 million, mainly backed by increased sales in the Controls business. Sales in the Cleaning category fell as consumer demand for a few product lines within this category was soft.
The segment's adjusted EBITDA of $29.2 million soared 93.4% from the year-ago quarter, driven by increased sales, manufacturing efficiencies and lower operational costs, offset by elevated investments in innovation and advertising.
Other Financials
As of Mar 31, 2024, the company’s cash balance was $745.7 million, with an outstanding debt of $1.4 billion, including $1.3 billion of senior unsecured notes and $84 million of finance leases. It exited the quarter with a net debt of about $155 million.
Guidance
Spectrum Brands now projects reported sales to remain flat year over year. Adjusted EBITDA, excluding the investment income, is likely to grow in the low-double digits.
Key Picks
Some better-ranked companies are Ralph Lauren (RL - Free Report) , Royal Caribbean (RCL - Free Report) and lululemon athletica (LULU - Free Report) .
Ralph Lauren sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren has a trailing four-quarter earnings surprise of 18.7%, on average. The Zacks Consensus Estimate for RL’s fiscal 2024 earnings per share (EPS) indicates an increase of 22.7% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 28.3%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 14.5% and 47.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank # 2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 13.7% and 15%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.