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Sep 30, 2022
Spectrum Brands Q4 2022 Earnings Report
Reported a challenging year-end with sales declining slightly due to unfavorable foreign currency impact and retailers reducing inventory levels, but cost reduction actions partially offset the impact.
Key Takeaways
Spectrum Brands Holdings reported a 1.1% decrease in net sales, impacted by unfavorable foreign exchange rates and lower replenishment orders from retailers reducing inventory. The company is focused on maximizing free cash flow and deleveraging the balance sheet, with expectations of low single-digit net sales growth and low double-digit EBITDA growth for fiscal year 2023.
Net sales decreased 1.1% due to unfavorable foreign exchange rates and lower replenishment orders.
Adjusted EBITDA decreased by $4.4 million due to reduced sales volumes and unfavorable currency impact.
The company expects low single-digit net sales growth and low double-digit EBITDA growth for fiscal 2023.
Spectrum Brands anticipates collecting $4.3 billion upon completion of the sale of HHI, expected by the end of June 2023.
Forward Guidance
Spectrum Brands expects low single-digit reported net sales growth and low double-digit adjusted EBITDA growth in fiscal 2023.
Positive Outlook
- Low single-digit net sales growth expected in Fiscal 2023.
- Fiscal 2023 adjusted EBITDA is expected to increase by low double-digits.
- Targeting a long-term net leverage ratio of 2.0 - 2.5 times after full deployment of HHI sale proceeds.
- Additional Pricing Actions Expected to Offset Projected Inflationary Increases and Unfavorable Currency Impact
- The Company Expects to Return to Free Cash Flow Generation in Fiscal 2023 with over $200 Million of Inventory Reduction
Challenges Ahead
- Foreign exchange is expected to have a negative impact based upon current rates.
- Macro-economic environment to continue in fiscal 2023
- Expects the DOJ lawsuit
- Higher interest rates
Historical Earnings Impact
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