Spectrum Brands posted second-quarter results topping Wall Street sales and earnings estimates while announcing an extension of its Black & Decker licensing deal for kitchen and garment care electrics.
Net income from continuing operations was $49.9 million, or $1.65 per diluted share, versus a net loss of $75 million, or $1.83 per diluted share, in the year-previous quarter. Adjusted for one-time events, diluted earnings per share were $1.62 versus a diluted loss per share of 14 cents in the year-before period, the company stated.
A Yahoo Finance-published analyst consensus estimate was for adjusted diluted earnings per share of 62 cents and revenue of $707.52 million.
Net sales were $718.5 million versus $729.2 million in the year-prior quarter. Net sales slipped because of lower sales in home appliances, volume declines in aquatics in North America, and the impact of SKU rationalizations, offset by stronger controls sales.
Net sales in the Home & Garden segment were $160.7 million versus $153.3 million in the year-past period, as sales in the Home & Personal Care segment came in at $267.9 million versus $279.2 million and sales in the Global Pet Care segment came in at $289.9 million versus $296.7 million year over year. Spectrum’s home and personal care business includes small appliance brands such as Black & Decker, George Foreman, Russell Hobbs, Remington, PowerXL, Emeril Lagasse and CopperChef.
Operating income was $75.9 million versus an operating loss of $77 million in the year-earlier quarter.
In announcing the financial results, David Maura, Spectrum Brands chairman and CEO, said, “We are pleased to report a strong second quarter of fiscal ‘24, building off the operating momentum we drove in our first quarter. Our sales performance improved sequentially and our operations produced a gross margin of 38.1%, an 870 basis point improvement over last year. Our net income increased by $124.9 million and our adjusted EBITDA, excluding investment income, more than doubled to $95.3 million. Net income margins increased to 6.9% and adjusted EBITDA margins, excluding investment income, nearly doubled to 13.3%. Given our first-half performance and expectations for modest top-line growth in the second half of the year, we are raising our full-year earnings framework and now expect net sales to be relatively flat and adjusted EBITDA to grow in the low double-digits.”
In addressing another matter, Maura said, “I am also happy to announce that we have entered into a new agreement with Stanley Black & Decker to license the Black & Decker name in the same categories and geographies as before through the end of calendar 2027, with two additional four year extensions, providing us with access to the Black & Decker brand name through the end of calendar 2035. This is a significant milestone for us, providing certainty on our future access to this important brand name. Given this and the continued improving financial performance in our Home and Personal Care business (HPC), we are continuing to pursue a strategic alternative for HPC via a sale, joint venture or spin later this year. To that end, our internal teams, along with outside advisors, have made significant progress in preparation to launch a multi-track process, and we anticipate filing an initial Form 10 spin document this summer.”
