Spectrum Brands Stock Falls After Q4 Earnings Miss On Lower Investment Income: Details

Spectrum Brands Holdings, Inc. SPB shares are trading lower on Friday.

The company reported fourth-quarter adjusted earnings per share of 97 cents, missing the street view of $1.07. Quarterly revenues were $773.7 million (+4.5%), beating the analyst consensus of $747.51 million.

Gross profit surged 17.8% to $288 million. Gross profit and margin increased due to productivity improvements, operational efficiencies, and inventory actions in the prior year, partially offset by ocean freight inflation.

Adjusted EBITDA decreased $42.6 million, driven by $32.5 million of lower investment income and $25.9 million of increased brand-focused investments, offset by gross profit improvements.

As of the fiscal year-end, the company reported a cash balance of $369 million and total liquidity of $860 million, including undrawn capacity on its cash flow revolver.

It had $578 million in outstanding debt, consisting of $496 million in senior unsecured notes and around $82 million in finance lease obligations, resulting in a net debt of approximately $209 million.

Outlook: Spectrum Brands expects low single-digit growth in reported net sales in fiscal 2025 and adjusted EBITDA to increase by mid to high single-digits. Adjusted free cash flow is expected to be approximately 50% of adjusted EBITDA.

The company continues to target a long-term net leverage ratio of 2.0 – 2.5 times.

“I am excited about the upcoming year. Our focus during fiscal 2025 will be to continue the momentum we built in fiscal 2024 by investing in our brands to drive long-term growth, in innovation to expand core and adjacent categories, and in our operations to drive further cost improvement, quality and safety,” said David Maura, Chairman and Chief Executive Officer of Spectrum Brands.

Price Action: SPB shares are trading lower by 4.78% to $89.38 at last check Friday.

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