ACCO Brands Q1 2025: Navigating Key Contradictions in Sales Strategy, Tariffs, and Demand Dynamics

Sales strategy and focus, tariff impact and supply chain strategy, demand environment and macro trends, back-to-school season and inventory levels are the key contradictions discussed in ACCO Brands' latest 2025Q1 earnings call.



Sales and Earnings Performance:
- ACCO Brands reported comparable sales down 8% in Q1 2025, with adjusted EPS above their outlook.
- The decline was due to soft consumer and business demand, particularly in the Americas segment, offset by growth in computer accessories and Brazil.

Gross Margin Improvement:
- ACCO Brands expanded its gross margin by 60 basis points in Q1, with a gross profit of $100 million.
- This was attributed to favorable sales mix and cost-saving efforts from their footprint rationalization program.

Cost Reduction and Inventory Management:
- The company realized $7 million in additional savings in the first quarter as part of a multiyear cost reduction program.
- To mitigate tariff impacts, ACCO Brands temporarily invested in inventory, utilizing the 90-day pause on reciprocal tariffs outside of China.

Impact of US Tariffs:
- In response to US tariffs, ACCO Brands accelerated sourcing to other countries, expecting an insignificant amount of China-sourced products supporting the US by the end of 2025.
- The company implemented price increases in North America, with additional actions anticipated pending the ultimate tariff resolution.