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Jan 02, 2022
Spectrum Brands Q1 2022 Earnings Report
Spectrum Brands reported first quarter results with net sales increase but margins contracted due to inflationary pressures.
Key Takeaways
Spectrum Brands Holdings reported a 2.9% increase in net sales and a 1.6% increase in organic net sales for the first quarter of fiscal 2022. However, income from continuing operations decreased to a loss of $30.2 million, and adjusted EBITDA was $49.3 million, due to supply chain disruptions, input cost inflation, and higher restructuring costs. The company expects additional pricing actions to offset the majority of projected inflationary increases and maintains its 2022 earnings framework of mid-to-high single-digit net sales growth and low single-digit adjusted EBITDA growth.
Net sales increased by 2.9%, and organic net sales increased by 1.6%.
Income from continuing operations decreased to a loss of $30.2 million.
Adjusted EBITDA was $49.3 million, impacted by supply chain issues and inflation.
The company is maintaining its 2022 earnings framework with expected net sales growth and adjusted EBITDA growth.
Revenue by Segment
Forward Guidance
Spectrum Brands continues to expect mid to high single-digit reported net sales growth in Fiscal 2022 and expects Fiscal 2022 adjusted EBITDA to increase by low-single digits. The company expects $310-$330 million of additional inflation during Fiscal 2022 and intends to offset the high inflation through additional pricing as needed.
Positive Outlook
- Expects mid to high single-digit reported net sales growth in Fiscal 2022.
- Expects Fiscal 2022 adjusted EBITDA to increase by low-single digits.
- Intends to offset the high inflation through additional pricing as needed.
- Reiterating a long-term net leverage target ratio of 2.0 - 2.5 times after full deployment of HHI proceeds.
- Consumer demand and retailer interest in our categories remain positive overall
Challenges Ahead
- Foreign exchange expected to have a slightly negative impact based upon current rates.
- Expects $310-$330 million of additional inflation during Fiscal 2022.
- Margins contracted as inflationary costs were materially higher than related price increases
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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