Energizer Tops Q3 Estimates, To Launch $75M Accelerated Share Repurchase, Lifts FY21 Sales Outlook

Energizer Holdings Inc ENR reported third-quarter sales growth of 9.7% year-over-year to $721.8 million, +5.8% on an organic basis, beating the consensus of $659.39 million.
Sales by segments: Americas $525.2 million (+6.8% Y/Y), and International $196.6 million (+18.4% Y/Y).
Total segment profit increased by 3.7% Y/Y to $ 163.5 million, and margin declined by 131 bps to 22.6%.
Adjusted EPS improved by 48% Y/Y to $0.74, beating the consensus of $0.67.
The gross margin contracted by 210 bps to 37.9%, reflecting higher operating costs, including higher labor costs, tariffs, and transportation.
Adjusted EBITDA increased 7% Y/Y to $144.4 million, and the margin was 20%.
Energizer generated cash from operating activities year-to-date of $17.5 million, compared to $219 million a year ago, and Adjusted Free cash flow from continuing operations of $42.6 million.
Net debt to credit-defined EBITDA was 5.0 times as of June 30, 2021.
The company intends to enter into a $75.0 million accelerated share repurchase (ASR) program in Q4 of fiscal 2021.
FY21 Outlook: Energizer expects net sales growth of 8%-9% (prior 5%-7%).
It maintained an outlook for Adjusted EPS of $3.30 - $3.50 vs. consensus of $3.47 and Adjusted EBITDA of $620 million - $640 million.
The adjusted gross margin rate to decrease 80 to 110 bps (prior: essentially flat).
The adjusted free cash flow to exceed $225 million (prior outlook at the low end of $325 million - $350 million).
Price Action: ENR shares traded higher by 2.45% at $41.80 on the last check Monday.

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