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Jun 29, 2025
Spectrum Brands Q3 2025 Earnings Report
Spectrum Brands Holdings reported its fiscal third quarter 2025 results, with net sales decreasing by 10.2% and organic net sales by 11.1%, primarily due to stop shipments, tariff-related supply constraints, and softening demand in Global Pet Care and Home and Personal Care, alongside unfavorable weather impacting Home and Garden. Net income from continuing operations increased by $1.4 million to $20.5 million, while Adjusted EBITDA decreased by $29.7 million to $76.6 million.
Key Takeaways
Spectrum Brands faced a challenging quarter with significant sales declines across all segments due to strategic decisions related to tariffs, supply chain disruptions, and soft consumer demand. Despite these headwinds, the company saw an increase in net income from continuing operations and reaffirmed its free cash flow guidance for fiscal 2025, indicating a focus on long-term stability and cost reduction.
Net sales decreased by 10.2% to $699.6 million, with organic net sales declining by 11.1%, primarily due to stop shipments during tariff-related pricing negotiations and supply constraints.
Net income from continuing operations increased by 7.3% to $20.5 million, driven by lower interest costs, lower taxes, and a reduced share count.
Adjusted EBITDA decreased by 27.9% to $76.6 million, and Adjusted EBITDA margin declined by 270 basis points to 10.9%, mainly due to lower operating income and investment income.
The company reaffirmed its expectation of generating approximately $160 million in free cash flow for fiscal 2025, despite suspending its earnings framework due to global trade uncertainties.
Revenue by Segment
Forward Guidance
Spectrum Brands expects to generate approximately $160 million of free cash flow in fiscal 2025, but has suspended its earnings framework due to uncertainties from global trade conditions and tariffs, and their impact on consumer demand. The company is targeting an incremental $20 to $25 million in pricing and supplier concessions to fully cover incremental tariff exposure heading into fiscal 2026.
Positive Outlook
- Reaffirming expectation of generating approximately $160 million of free cash flow in fiscal 2025.
- Tariff pricing is now in place with all major customers, and retailer reorder patterns are normalizing in fiscal Q4.
- Supply is turned back on, and the company is actively diversifying its supply base.
- Reduced costs by over $50 million in fiscal 2025 through internal initiatives.
- July results show sequential higher sales rates across all businesses, with improved weather conditions benefiting Home & Garden and new distribution gains for Global Pet Care.
Challenges Ahead
- Suspension of the fiscal 2025 earnings framework due to uncertainty caused by global trade conditions and tariffs.
Revenue & Expenses
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