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Jun 30, 2023
Energizer Q3 2023 Earnings Report
Energizer's Q3 2023 results were announced, revealing a decrease in net sales and organic net sales, alongside gross margin improvements driven by Project Momentum initiatives.
Key Takeaways
Energizer Holdings, Inc. reported a decrease in net sales by 3.9% and organic net sales by 2.7% for the third quarter of fiscal year 2023. The company is increasing Project Momentum savings target to $130 to $150 million. They reaffirm fiscal year outlook for Adjusted earnings per share and Adjusted EBITDA at the low end of original range.
Net sales decreased 3.9%, with Organic Net sales down 2.7%.
Gross margin of 37.9%, and 38.8% on an adjusted basis, showing sequential improvement driven by Project Momentum.
Operating cash flow was $296.3 million, with free cash flow exceeding 12% of Net Sales year-to-date.
Debt pay down of $200 million occurred in the first three quarters.
Energizer
Energizer
Energizer Revenue by Segment
Revenue by Segment
Auto Care Revenue
CapyFin.com Forward Guidance
Energizer is lowering its outlook for full year organic revenue from up low single digits to down low single digits. Even with lower revenues, they expect continued gross margin recovery, driven largely by Project Momentum savings, to support delivery of Adjusted EPS and Adjusted EBITDA at the low end of their previously communicated ranges.
Positive Outlook
- Continued gross margin recovery, driven largely by Project Momentum savings
- Anticipate fourth fiscal quarter organic revenue will be roughly flat
- Significant year over year gross margin improvement due to declining input costs
- Continued benefit of Project Momentum savings
- Project Momentum remains on track with approximately $32 million of savings delivered year-to-date and total project savings of $45 to $50 million anticipated for the full year.
Challenges Ahead
- Lower outlook for full year organic revenue from up low single digits to down low single digits.
- Even with lower revenues, we expect continued gross margin recovery
- Delivery of Adjusted EPS and Adjusted EBITDA at the low end of our previously communicated ranges.
- Total one-time program cash costs are now projected to be roughly 75% of expected savings.
- Total one-time cash project costs for the current year are now expected to be in the range of $45 to $50 million.