Spectrum Brands Holdings Inc (NYSE:SPB) Reports Q3 Earnings: Revenue Miss, Adjusted EPS Beat Amid Macroeconomic Challenges

Spectrum Brands Holdings Inc (NYSE:SPB) reported fiscal third-quarter earnings that fell short of analyst revenue expectations but exceeded adjusted earnings per share (EPS) estimates. The company posted revenue of $699.6 million, a 10.2% year-over-year decline, missing consensus estimates of $749.6 million. Adjusted EPS came in at $1.24, beating expectations of $1.29.

Key Financial Highlights vs. Estimates

• Revenue Miss: Reported sales of $699.6M vs. $749.6M expected (-6.7% variance).
• Adjusted EPS Beat: $1.24 vs. $1.29 expected (-3.9% variance, but still above adjusted EPS from Q3 2024).
• Gross Margin Pressure: Gross profit declined to 37.8% from 38.9% YoY due to tariffs, supply constraints, and inflation.
• Adjusted EBITDA Decline: Dropped 27.9% YoY to $76.6M, reflecting lower sales and operational challenges.

Market Reaction

The stock is down 0.81% in pre-market trading, reflecting investor concerns over revenue softness and ongoing macroeconomic pressures. Over the past month, shares have declined 6.77%, indicating broader skepticism ahead of earnings.

Press Release Summary

The company attributed weaker sales to:

• Tariff Disruptions: A temporary halt in Chinese imports due to 145% tariffs, later resumed at 30%.
• Retailer Negotiations: Some shipments were paused during pricing discussions, impacting fulfillment.
• Consumer Softness: Weak demand in Global Pet Care and Home & Personal Care segments.
• Weather Impact: Cool, wet weather delayed Home & Garden seasonal sales.

Management noted improving trends in July, with sequential sales growth across all segments. The company has secured initial pricing adjustments to offset tariff impacts and is targeting an additional $20M-$25M in concessions for fiscal 2026.

Outlook vs. Analyst Estimates

Spectrum Brands did not provide full-year guidance due to ongoing trade uncertainty but expects $160M in free cash flow for fiscal 2025. Analysts project:

• Q4 2025 Revenue: $727.5M (vs. no company guidance).
• Full-Year 2025 Revenue: $2.867B.

Segment Performance

• Global Pet Care: Sales down 9.6%, with adjusted EBITDA margins falling to 17.2%.
• Home & Garden: Sales declined 10.3% due to weather, though margins held steady at 20.4%.
• Home & Personal Care: Sales dropped 10.8%, with margins shrinking to 2.7%.

Liquidity & Debt

The company ended the quarter with $122M in cash and $510.5M in total liquidity, alongside $681.1M in debt. Net debt stood at $559.1M, with a long-term leverage target of 2.0-2.5x.

For more detailed earnings and estimates, visit Spectrum Brands' earnings page.

Disclaimer: This article is not investment advice. Investors should conduct their own research before making decisions.