In the first quarter, Spectrum Brands Holdings beat analyst estimates for profit and revenue, but sales slipped year over year.
Net income from continuing operations was $29.4 million, or $1.25 per diluted share, versus $24.6 million, or 87 cents per diluted share, in the year-earlier quarter, Spectrum reported. Adjusted for one-time events, earnings per diluted share from continuing operations were $1.40 versus $1.02.
A Zacks Investment Research analyst consensus estimate called for earnings of 77 cents per adjusted diluted share and sales of $666 million.
Net sales were $677 million versus $700.2 million in the year-previous quarter. According to Spectrum, net sales declined 6% organically, excluding the $18.5 million favorable impact of foreign exchange. Continued softness in category demand and the impact of an accelerated seasonal inventory build by some Home and Garden customers in the prior year were the primary causes of the net sales decline. The Global Pet Care business returning to growth partially offset the decline, with the key Companion Animal brands outperforming the market while benefiting from a softer year over year comparison
Operating income $27.1 million versus $44.7 million in the year-before period.
In the Home & Personal Care segment, net sales were $321.5 million, compared with $348.1 million in the year-prior quarter. Net sales slipped 7.6%, with organic net sales down 11.1% excluding favorable foreign currency impacts. Net sales in the Personal Care segment slipped in the mid-single digits, while those in Home Appliances declined in the high single digits.
In the Home & Garden segment, net sales were $73.9 million, compared with $92.1 million in the year-ago period. Net sales slid 19.8%, and organic net sales declined 19.8% due to an accelerated seasonal inventory build by certain retailers in the 2024 quarter, impacting all pest control categories.
In the Global Pet Care segment, net sales were $281.6 million, up from $260 million in the year-ago period. Net sales increased 8.3%, even as, excluding favorable foreign currency impacts, organic net sales increased 5.8%. Sales in Companion Animal increased in the high single digits, as sales in Aquatics increased in the low double digits.
Spectrum stated that it expects to deliver flat to low-single-digit growth in reported net sales in fiscal 2026.
David Maura, Spectrum chairman and CEO, said, “We are pleased with our results this quarter, particularly that our most profitable and largest adjusted EBITDA contributing business. Global Pet Care returned to growth. Our net sales and adjusted EBITDA exceeded expectations despite the ongoing macroeconomic challenges that continue to impact overall consumer demand. These results reinforce the effectiveness of our strategic initiatives and validate our belief that the difficult but necessary steps we implemented in fiscal 2025 were indeed the right course of action. Looking ahead, we will remain disciplined in executing our strategy, recognizing that significant work remains. We remain confident that Global Pet Care and Home & Garden will return to growth this fiscal year while we continue to improve the fundamentals of our Home & Personal Care business and deliver improved profitability across all three businesses. We are reiterating our earnings framework of flat to low single-digit revenue growth and low single-digit adjusted EBITDA growth in fiscal ’26.”
