Spectrum Brands pointed to operational improvements in reporting first-quarter results that beat Wall Street sales and earnings estimates.
Net income from continuing operations was $17.5 million million, or 51 cents per diluted share, versus a loss from continuing operations of $40 million, or 99 cents per share, in the year-before quarter, the company reported. Adjusted for one-time events, earnings per diluted share from continuing operations were 78 cents versus a loss from continuing operations of 32 cents in the fiscal 2023 period.
A Yahoo Finance-published analyst consensus estimate called for earnings of 43 cents per adjusted diluted share and revenues of $673.86 million.
Net sales were $692.2 million versus $713.3 million in the year-prior quarter, Spectrum stated. Operating income was $25 million versus an operating loss of $20.2 million in the year-earlier period.
In the Home and Personal Care segment, net sales were $343.3 million versus $364.4 million and operating income was $16.5 million compared with an operating loss of $4.3 million in the year-earlier quarter. The net sales decrease was primarily because of lower consumer demand in small kitchen appliances, Spectrum indicated. Sales in International markets grew across personal care and small kitchen appliances categories. In North America, sales slipped because of lower consumer demand and the exit of certain small kitchen appliance SKUs. Organic net sales declined 7.6%, excluding a favorable foreign currency impact of $6.7 million. The operating income increase came from lower cost inventory compared to fiscal 2023 offset by lower volume and negative mix.
Net sales in Spectrum Brands’ Home and Garden segment were $72 million versus $71.4 million and operating loss was $5.5 million compared with $7.2 million in the year-past quarter. The net sales increase was primarily driven by higher sales in the Controls business, where late warmer fall weather extended the selling season, and retailer reorder patterns improved to fall more in line with historical trends than was the case in fiscal 2023, Spectrum noted. Sales in the Cleaning category declined as COVID-19 pandemic-prompted demand decreased. The improvement in operating loss resulted from higher sales, manufacturing efficiencies carrying into the fiscal year and operational cost reductions, offset by increased investments in innovation and advertising.
Global Pet Care segment sales were $276.9 million versus $277.5 million and operating income was $43.9 million compared with $22.7 million in the year-previous quarter. The decrease in net sales related to softness in the aquatics category worldwide and the impact of the decision to exit several non-strategic categories and SKUs, offset by growth in the companion animals category, Spectrum maintained. North American sales slipped because of soft demand in aquatics and the SKU exits. Sales in EMEA increased with growth in the companion animal category driven by strong dog and cat food sales. Organic net sales decreased 2%, excluding favorable foreign currency impacts of $5 million. Operating income increased due to lower cost inventory compared to fiscal 2023, favorable product and channel mix and savings from cost reduction initiatives in the year before partially offset by lower volumes and increased advertising investments.
David Maura, Spectrum chairman and CEO, said, “The first quarter of fiscal ‘24 is an indication that the investments we are making in our people are paying off. Our operations have a very effective sales and operations planning process behind them now, with rigorous rhythm, cadence and accountability. This is driving much better factory production performance, better operations in our distribution centers leading to higher fill rates and higher customer service levels to our retail partners. We are continuing to focus on fewer, bigger, better innovations and on our commercial operations through added investments in sales and marketing as we seek to restore revenue growth. We have delevered our company. We are operating much more efficiently. We are returning large amounts of capital to our shareholders through dividends and share buy-backs.”
Maura added the company is “accelerating our efforts to separate our Home and Personal Care business as we restore the profitability of that unit. Our margins and EBITDA are growing again in both our Global Pet Care and Home & Garden businesses. With our operational house now in order, our primary focus is to return to revenue growth.,” he said.