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Spectrum Brands' Q4 earnings jumped to $2.61 per share, topping estimates despite lower sales.
Net sales declined 5.2% to $733.5 million on softer demand and supply constraints in key segments.
SPB expects flat to low single-digit sales and adjusted EBITDA growth in fiscal 2026.
Spectrum Brands Holdings Inc. (SPB - Free Report) has reported mixed fourth-quarter fiscal 2025 results, wherein the top line missed the Zacks Consensus Estimate while the bottom line beat. Earnings improved year over year, but sales declined.
SPB’s shares gained nearly 5% in trading hours following the quarterly results. Shares of this current Zacks Rank #4 (Sell) company have gained 8.2% in the past three months compared with the industry's 9.5% growth.
SPB reported adjusted earnings of $2.61 per share, increasing significantly from 97 cents reported in the year-ago quarter and surpassing the Zacks Consensus Estimate of 77 cents. The earnings improvement was primarily buoyed by lower income tax and decreased outstanding shares, partly offset by lower adjusted EBITDA.
Spectrum Brands' net sales dipped 5.2% year over year to $733.5 million and missed the consensus estimate of $745 million. The decrease was due to an organic net sales decline of 6.6%, excluding the favorable foreign currency impacts of $10.5 million. Also, sales declines in GPC and HPC with respect to the supply constraints from pausing Chinese sourced imports previously in the fiscal year and category softness, somewhat offset by higher sales in H&G from positive shifts in seasonal sales.
The gross profit dropped 10.9% year over year to $256.6 million, thanks to soft volumes, negative mix, inflation and tariffs, partly offset by pricing, cost-improvement efforts and operational efficiencies. Meanwhile, the gross margin contracted 220 bps year over year to 35%.
Spectrum Brands Holdings Inc. Price, Consensus and EPS Surprise
Adjusted EBITDA from continuing operations slipped 8% year over year to $63.4 million in the fiscal fourth quarter, due to lower volumes and gross margins. This was offset by lower operating expenses. The adjusted EBITDA margin contracted 30 bps year over year to 8.6%.
Spectrum Brands’ Segmental Performance
Sales in the Home & Personal Care segment tumbled 11.9% year over year to $296.2 million, while organic net sales declined 13.4%, excluding favorable foreign currency impacts. Net sales in Personal Care decreased low single digits while net sales in Home Appliances fell double digits. Consumer sentiment in the US and EMEA hurt demand, and the US witnessed supply shortages from the pause in orders when China tariffs were at their highest point.
EMEA organic net sales dipped in double digits, with sluggishness in the Home Appliances and Personal Care. North American net sales percent fell in the mid-twenties, mainly due to lower volumes in Home Appliances. LATAM organic net sales rose in the high single-digits, with growth in both categories.
The segment's adjusted EBITDA of $15.7 million was down 17.4% year over year due to lower volumes, unfavorable mix and tariffs. Such limitations were largely offset by pricing, lower brand-focused investments with respect to the tariff-supply issues, decreased distribution costs and expense management.
The Global Pet Care segment's sales dipped 1.5% year over year to $298.1 million, with organic net sales down 3.3% after excluding favorable foreign currency impacts. Sales in Aquatics grew high single digits, offset by a mid-single digit drop in Companion Animal. North American net sales in both categories were hurt by category softness, supply constraints from pausing Chinese purchases earlier in the fiscal year and a strategic pull forward of orders by retailers in the last fiscal year.
EMEA net sales in Companion Animal rose, backed by the ongoing strength in the GoodBoy brand and robust performance in the Dog and Cat Food category. Aquatics net sales grew in EMEA and North America on distribution gains in the US and solid brand performance in EMEA.
The segment's adjusted EBITDA of $49.6 million jumped 12% from the year-ago quarter, owing to expense management through cost-savings efforts, lower investment spend on category softness and spend phasing, and pricing. Such efforts more than offset the soft sales, increased tariff costs and inflation. The adjusted EBITDA margin expanded 200 bps to 16.6%.
The Home & Garden segment's sales climbed 3.2% year over year to $139.2 million, backed by an organic net sales increase of 3.1% owing to a delayed start to the season that positively impacted current-quarter results. Net sales in Controls improved high-teens, while sales in Household Pest and Repellents fell single digits. Net sales in cleaning also dipped.
The segment's adjusted EBITDA fell 11.1% year over year to $16.9 million, while the adjusted EBITDA margin contracted 200 bps to 12.1%. Adjusted EBITDA decreased due to negative mix, inflation, tariffs and elevated brand-focused investments, partly offset by pricing, productivity and higher sales.
Spectrum Brands’ Other Financials
As of Sept. 30, 2025, SPB had a cash balance of $123.6 million. It had an outstanding debt of $581.4 million, including no outstanding borrowings on the revolver, $496.1 million of senior unsecured notes and $85.3 million of finance leases. The company had a total liquidity of $615.9 million, comprising the undrawn capacity on its cash flow revolver of $492.3 million. It exited the quarter with a net long-term debt of $556.2 million.
In fiscal 2025, SPB returned $374.6 million via share repurchases and dividends.
SPB’s Outlook
Spectrum Brands continues to project delivering flat to low single-digit growth in reported net sales in fiscal 2026. Fiscal 2026 adjusted EBITDA is likely to rise in the low single digits. Adjusted free cash flow is forecast to be nearly 50% of adjusted EBITDA.
Management continues to expect a long-term net leverage ratio of 2.0 - 2.5 times.
BYD delivered a trailing four-quarter earnings surprise of 9.6%, on average. The Zacks Consensus Estimate for BYD’s current financial-year EPS indicates growth of 8.7% from the year-ago number.
Guess?, Inc. (GES - Free Report) , which is a designer and marketer of casual apparel and accessories, currently carries a Zacks Rank #2 (Buy).
GES delivered a trailing four-quarter earnings surprise of 26.7%, on average. The Zacks Consensus Estimate for GES’ current financial-year sales indicates growth of 7% from the year-ago number.
Hanesbrands Inc. (HBI - Free Report) , which is a designer and manufacturer of apparel essentials for men, women and children in the US and internationally, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for HBI’s current financial-year EPS is expected to rise 62.5% from the corresponding year-ago reported figure. HBI delivered a trailing four-quarter earnings surprise of 45.5%, on average.
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Spectrum Brands' Q4 Earnings Beat Estimates, Organic Sales Dip 6.6% Y/Y
Key Takeaways
Spectrum Brands Holdings Inc. (SPB - Free Report) has reported mixed fourth-quarter fiscal 2025 results, wherein the top line missed the Zacks Consensus Estimate while the bottom line beat. Earnings improved year over year, but sales declined.
SPB’s shares gained nearly 5% in trading hours following the quarterly results. Shares of this current Zacks Rank #4 (Sell) company have gained 8.2% in the past three months compared with the industry's 9.5% growth.
SPB reported adjusted earnings of $2.61 per share, increasing significantly from 97 cents reported in the year-ago quarter and surpassing the Zacks Consensus Estimate of 77 cents. The earnings improvement was primarily buoyed by lower income tax and decreased outstanding shares, partly offset by lower adjusted EBITDA.
Spectrum Brands' net sales dipped 5.2% year over year to $733.5 million and missed the consensus estimate of $745 million. The decrease was due to an organic net sales decline of 6.6%, excluding the favorable foreign currency impacts of $10.5 million. Also, sales declines in GPC and HPC with respect to the supply constraints from pausing Chinese sourced imports previously in the fiscal year and category softness, somewhat offset by higher sales in H&G from positive shifts in seasonal sales.
The gross profit dropped 10.9% year over year to $256.6 million, thanks to soft volumes, negative mix, inflation and tariffs, partly offset by pricing, cost-improvement efforts and operational efficiencies. Meanwhile, the gross margin contracted 220 bps year over year to 35%.
Spectrum Brands Holdings Inc. Price, Consensus and EPS Surprise
Spectrum Brands Holdings Inc. price-consensus-eps-surprise-chart | Spectrum Brands Holdings Inc. Quote
Adjusted EBITDA from continuing operations slipped 8% year over year to $63.4 million in the fiscal fourth quarter, due to lower volumes and gross margins. This was offset by lower operating expenses. The adjusted EBITDA margin contracted 30 bps year over year to 8.6%.
Spectrum Brands’ Segmental Performance
Sales in the Home & Personal Care segment tumbled 11.9% year over year to $296.2 million, while organic net sales declined 13.4%, excluding favorable foreign currency impacts. Net sales in Personal Care decreased low single digits while net sales in Home Appliances fell double digits. Consumer sentiment in the US and EMEA hurt demand, and the US witnessed supply shortages from the pause in orders when China tariffs were at their highest point.
EMEA organic net sales dipped in double digits, with sluggishness in the Home Appliances and Personal Care. North American net sales percent fell in the mid-twenties, mainly due to lower volumes in Home Appliances. LATAM organic net sales rose in the high single-digits, with growth in both categories.
The segment's adjusted EBITDA of $15.7 million was down 17.4% year over year due to lower volumes, unfavorable mix and tariffs. Such limitations were largely offset by pricing, lower brand-focused investments with respect to the tariff-supply issues, decreased distribution costs and expense management.
The Global Pet Care segment's sales dipped 1.5% year over year to $298.1 million, with organic net sales down 3.3% after excluding favorable foreign currency impacts. Sales in Aquatics grew high single digits, offset by a mid-single digit drop in Companion Animal. North American net sales in both categories were hurt by category softness, supply constraints from pausing Chinese purchases earlier in the fiscal year and a strategic pull forward of orders by retailers in the last fiscal year.
EMEA net sales in Companion Animal rose, backed by the ongoing strength in the GoodBoy brand and robust performance in the Dog and Cat Food category. Aquatics net sales grew in EMEA and North America on distribution gains in the US and solid brand performance in EMEA.
The segment's adjusted EBITDA of $49.6 million jumped 12% from the year-ago quarter, owing to expense management through cost-savings efforts, lower investment spend on category softness and spend phasing, and pricing. Such efforts more than offset the soft sales, increased tariff costs and inflation. The adjusted EBITDA margin expanded 200 bps to 16.6%.
The Home & Garden segment's sales climbed 3.2% year over year to $139.2 million, backed by an organic net sales increase of 3.1% owing to a delayed start to the season that positively impacted current-quarter results. Net sales in Controls improved high-teens, while sales in Household Pest and Repellents fell single digits. Net sales in cleaning also dipped.
The segment's adjusted EBITDA fell 11.1% year over year to $16.9 million, while the adjusted EBITDA margin contracted 200 bps to 12.1%. Adjusted EBITDA decreased due to negative mix, inflation, tariffs and elevated brand-focused investments, partly offset by pricing, productivity and higher sales.
Spectrum Brands’ Other Financials
As of Sept. 30, 2025, SPB had a cash balance of $123.6 million. It had an outstanding debt of $581.4 million, including no outstanding borrowings on the revolver, $496.1 million of senior unsecured notes and $85.3 million of finance leases. The company had a total liquidity of $615.9 million, comprising the undrawn capacity on its cash flow revolver of $492.3 million. It exited the quarter with a net long-term debt of $556.2 million.
In fiscal 2025, SPB returned $374.6 million via share repurchases and dividends.
SPB’s Outlook
Spectrum Brands continues to project delivering flat to low single-digit growth in reported net sales in fiscal 2026. Fiscal 2026 adjusted EBITDA is likely to rise in the low single digits. Adjusted free cash flow is forecast to be nearly 50% of adjusted EBITDA.
Management continues to expect a long-term net leverage ratio of 2.0 - 2.5 times.
Key Picks in the Consumer Discretionary Space
Boyd Gaming (BYD - Free Report) , which is a gaming company, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BYD delivered a trailing four-quarter earnings surprise of 9.6%, on average. The Zacks Consensus Estimate for BYD’s current financial-year EPS indicates growth of 8.7% from the year-ago number.
Guess?, Inc. (GES - Free Report) , which is a designer and marketer of casual apparel and accessories, currently carries a Zacks Rank #2 (Buy).
GES delivered a trailing four-quarter earnings surprise of 26.7%, on average. The Zacks Consensus Estimate for GES’ current financial-year sales indicates growth of 7% from the year-ago number.
Hanesbrands Inc. (HBI - Free Report) , which is a designer and manufacturer of apparel essentials for men, women and children in the US and internationally, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for HBI’s current financial-year EPS is expected to rise 62.5% from the corresponding year-ago reported figure. HBI delivered a trailing four-quarter earnings surprise of 45.5%, on average.