It has been about a month since the last earnings report for Energizer Holdings (ENR Quick QuoteENR - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Energizer Holdings, Inc. before we dive into how investors and analysts have reacted as of late.

Energizer Q3 Earnings Miss Estimates on Margin & Mix Pressure

Energizer posted third-quarter fiscal 2026 adjusted earnings of 75 cents per share, down 33.6% year over year and missing the Zacks Consensus Estimate of 86 cents by 12.8%. Lower gross margins, unfavorable product mix and increased promotional investments weighed on profitability.

Net sales rose 1.2% to $734.1 million but missed the consensus mark of $737 million by 0.4%. Organic net sales increased 2.7%, supported by distribution gains, product innovation and strong refrigerant demand.

ENR's Organic Growth Reflects Volume Gains

Organic growth included a 1.9% volume contribution from global distribution gains and new products in the Batteries & Lights segment. Auto Care contributed 2.2% growth, primarily reflecting higher refrigerant distribution in North America.

These gains were partly offset by a 1.4% pricing decline stemming from increased promotional investments in Batteries & Lights. The expiration of an acquired brand license related to Advanced Power Solutions (APS) reduced reported sales by $17.2 million, representing a 2.4% acquisition-related headwind, while favorable currency contributed a 1% benefit.

Energizer's Margin & Cost Details

In the fiscal third quarter, adjusted gross profit declined 8.8% year over year to $287.7 million, while the adjusted gross margin contracted 560 basis points to 39.2%. The decline primarily reflected unfavorable product mix, increased promotional investments and the absence of prior-year out-of-period production credits. Excluding those credits, adjusted gross margin declined approximately 200 basis points. These pressures were partially offset by favorable currency impacts. 

The reported gross margin fell to 38.2% from 55.1%, with the year-ago result benefiting from $112.4 million of production credits, including $78.5 million tied to fiscal 2023 and fiscal 2024 production.

Cost discipline remained a focus during the quarter. Adjusted Selling, General and Administrative Expense (SG&A) expenses declined 1.2% year over year to $122.1 million and, as a percentage of net sales, improved 40 basis points to 16.6%. The improvement was driven by approximately $8 million in Project Momentum savings and lower stock compensation expense, partly offset by higher legal costs.

Advertising and promotion expenses decreased 3.9% year over year to $41.9 million. Advertising and promotion expenses were 5.7% of net sales in the fiscal third quarter compared with 6% in the year-ago period.

Adjusted EBITDA declined 8.8% year over year to $138.7 million as lower gross margins more than offset benefits from lower SG&A, advertising and Research and Development (R&D) spending. Excluding out-of-period production credits, the decline was 8.6%. The adjusted EBITDA margin contracted about 210 basis points to 18.9%.

ENR Batteries & Lights Segment Sees Organic Growth

Net sales in the Batteries and Lights segment declined 2% year over year to $524.2 million. Organic net sales increased 0.3%, supported by expanded distribution, innovation and continued market share gains despite the APS license expiration. Favorable currency also aided reported sales.

Segment profit declined 19.5% year over year to $127.9 million. The decline primarily reflected the absence of prior-year out-of-period production credits, along with lower gross margins driven by unfavorable product mix and increased promotional investments.

Management highlighted continued category outperformance supported by innovation, including the launch of Energizer Ultimate Child Shield, the world's only coin lithium battery designed to help prevent ingestion burns if swallowed, along with expanded distribution across key retail customers.

Energizer's Auto Care Delivers Strong Sales Growth

The Auto Care segment generated net sales of $209.9 million, up 10.4% year over year. Organic net sales increased 9.5%, driven by strong refrigerant demand and higher distribution in North America.

Segment profit declined 14.1% year over year to $20.7 million, as robust growth in lower-margin refrigerant products pressured profitability.

Management noted that while refrigerants drove third-quarter performance, premium Appearance products remain a significant long-term growth opportunity. The company continues expanding its premium Armor All Podium Series portfolio to strengthen its competitive position and improve portfolio quality.

ENR's Cash Flow Supports Deleveraging & Shareholder Returns

For the first nine months of fiscal 2026, Energizer generated $156 million in operating cash flow and $105 million in free cash flow, representing 4.9% of net sales. The company continued to prioritize cash generation as a key component of its long-term value creation strategy.

Debt reduction remained the company's highest capital allocation priority. Through the third quarter, Energizer reduced debt by more than $80 million and continues to expect fiscal 2026 debt repayment of $150-$200 million. The company paid a quarterly dividend of 30 cents per share, returning $20.6 million to shareholders during the quarter and approximately $65 million during the first nine months of fiscal 2026.

Management expects free cash flow to strengthen further as Project Momentum cash costs decline, capital expenditures normalize by roughly $30 million annually and the company collects the remaining $53 million of IEEPA tariff recoveries.

APS Transition Weighs on Reported Sales in Third-Quarter

The APS acquisition continued to affect reported results during the third quarter.

Energizer completed the APS acquisition on May 2, 2025, and sold batteries under an acquired brand license through Dec. 31, 2025. The expiration of that license reduced reported net sales by $17.2 million, representing a 2.4% headwind. However, sales generated as customers transitioned to Energizer's legacy brands were included within organic sales, contributing to the company's 2.7% organic sales growth.

Management said the APS transition remains an important element of its portfolio strategy as it strengthens its branded portfolio and expands distribution while migrating customers to Energizer's core brands.

Energizer Updates Fiscal 2026 Outlook

Looking ahead, Energizer expects fourth-quarter organic net sales to be flat to down low single digits year over year, reflecting muted battery category trends and some refrigerant demand shifting into the third quarter.

The company expects fourth-quarter adjusted earnings of $1.25-$1.35 per share, representing approximately 25% year-over-year growth at the midpoint, driven by productivity initiatives, supply chain optimization and actions taken throughout the year to strengthen profitability.

For fiscal 2026, Energizer expects organic net sales to decline low single digits compared with its previous expectation of roughly flat organic sales with growth returning in the second half.

The company also expects adjusted earnings per share at the low end of its previously guided range of $3.30-$3.60, versus its earlier expectation for the high end of the range. Likewise, adjusted EBITDA is expected at the low end of the prior $580-$610 million range rather than the high end previously anticipated.

Management expects continued investments in distribution expansion, innovation, operational improvements and customer transitions to support continued outperformance versus the battery category, strengthen its competitive position and drive long-term earnings and free cash flow growth despite a challenging consumer environment.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -9.01% due to these changes.

VGM Scores

Currently, Energizer has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of C. 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.

Performance of an Industry Player

Energizer is part of the Zacks Consumer Products - Staples industry. Over the past month, Albertsons Companies, Inc. (ACI Quick QuoteACI - Free Report) , a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended May 2026 more than a month ago.

Albertsons Companies reported revenues of $24.94 billion in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $0.42 for the same period compares with $0.55 a year ago.

Albertsons Companies is expected to post earnings of $0.33 per share for the current quarter, representing a year-over-year change of -25%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Albertsons Companies. Also, the stock has a VGM Score of A.