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Energizer (ENR) Q2 Preliminary Results Solid, View Withdrawn

Zacks Equity Research
·3 min read

Energizer Holdings, Inc. ENR released preliminary financial results for second-quarter fiscal 2020. The company reported better-than-expected top line and expects robust adjusted EBITDA in the soon-to-be-reported quarter, outweighing the impacts of the novel coronavirus outbreak. It is scheduled to report second-quarter fiscal 2020 results on May 7.

Preliminary Numbers in Detail

Notably, the company’s quarterly net sales of $587 million, suggests growth of 5.6% from the year-ago quarter’s reported number. Notably, the Zacks Consensus Estimate for sales is pegged at $583.6 billion for the quarter. Better-than-expected sales are attributed to robust organic sales, which improved 2.7% year over year. Also, the company expects to report adjusted EBITDA of $120-$125 million, whereas it reported $101 million in the year-ago quarter.

Its fiscal second-quarter performance is likely to have benefited from strong growth in the battery category in March, more so due to the increased consumer demand due to the COVID-19 outbreak.

Despite the better-than-expected fiscal second-quarter preliminary results, shares of Energizer dropped 4.9% on Apr 15. Shares of this Zacks Rank #3 (Hold) company have lost 30.7% in the past three months compared with the industry’s decline of 4.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


Efforts to Combat COVID-19

With Energizer’s products being of critical nature to serve the medical fraternity and general vigilance needs, its operations have been operational amid the coronavirus outbreak. The company has been working to maintain the reliability of its supply chain to keep manufacturing and supply operations up and running for customers. It has been functioning with strict adherence to the health and safety guidelines, retaining global fill rates above 90% throughout the crisis.

The company stated that its business has been operational so far, and the integration of its recently acquired battery and auto care businesses remain on track. It expects to deliver synergies from the integration on the targeted time.

Further, the company has fully drawn upon its revolving credit facility to enhance liquidity and protect working capital needs amid the pandemic. This has resulted in boosting its current cash position, with $484 million of cash and cash equivalents on hand.

However, the company cites that the unprecedented effects of the coronavirus outbreak have continued to hurt the global economy and consumer demand. Driven by the uncertainty of COVID-19 over the rest of the year, it withdrew the guidance for fiscal 2020.

Some other companies, including Aaron’s AAN, Ross Stores ROST and DICK’S Sporting DKS, have also withdrawn their guidance and adopted similar moves to counter the impact of the COVID-19 outbreak on their businesses.

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Aaron's, Inc. (AAN) : Free Stock Analysis Report
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