Spectrum Brands shares jump after beating profit expectations
Investing.com -- Spectrum Brands Holdings Inc (NYSE:SPB) shares were jumping to a new 52-week high after stronger than expected earnings as the household product maker boosts profitability.
The company reported adjusted earnings per share of 75 cents and revenue of $735.5 million. Analysts expected profit of 48 cents a share and revenue of $785.4M.
Shares were up 5% on Friday. They are up nearly 30% this year.
Revenue was down 10% from last year’s June quarter, but profit was up nearly 40% from the same time last year.
Waning retail sales of household products plus bad weather in the quarter affecting sales of garden products weighed on overall sales. The company reaffirmed guidance for the full year of net sales declining by the mid-single digits.
CEO David Maura said that while the company was “disappointed” by the top-line performance, “I am pleased with the fact that our focus on profitability is paying off as we exceeded third quarter EBITDA expectations, excluding investment income.”
The CEO added: “We expect some of these short-term demand headwinds to continue in the fourth quarter and, therefore, expect to be towards the lower end of our earnings framework, excluding the investment income from the HHI proceeds. We also believe there is still excess inventory in the retail channel as well as our balance sheet, particularly in kitchen appliances. Going into fiscal 24, one of our goals is to continue to improve the health of our inventory."
The company completed the sale of its hardware and home improvement business during the quarter. That makes it a net debt-free company, Maura said. "Our balance sheet is stronger than it has ever been and we have taken a major step in the direction of becoming a faster growing, higher margin, pure play Global Pet Care and Home&Garden company."
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