Spectrum Brands Holdings' Q2 Earnings Expectations: A Closer Look

Spectrum Brands Holdings is set to report its latest quarterly earnings on Thursday, with analysts expecting an EPS of $1.25. The company's previous earnings release missed EPS estimates by $0.73, leading to a 3.49% drop in the share price. Shares of Spectrum Brands Holdings have declined 40.94% over the last 52-week period, and analysts have a consensus rating of Buy with an average 1-year price target of $71.67, suggesting a potential 32.21% upside.

Spectrum Brands Holdings Inc. (SPB) reported its third-quarter fiscal 2025 results on Thursday, with adjusted earnings per share (EPS) of $1.24, which missed the Zacks Consensus Estimate of $1.25 [1]. The company's net sales declined by 10.2% year over year to $699.6 million, also missing the Zacks Consensus Estimate of $739 million. The earnings improvement was primarily driven by lower interest expenses, reduced tax liabilities, and a lower share count. However, these gains were partially offset by a decline in operating and investment income [1].

The gross profit declined by 12.8% year over year to $264.1 million due to lower sales volume, an unfavorable product mix, inflationary pressures, and the impacts of higher tariffs. The gross margin contracted by 110 basis points to 37.8% [1]. Adjusted EBITDA from continuing operations decreased by 27.9% year over year to $76.6 million, with the adjusted EBITDA margin contracting by 270 basis points to 10.9% [1].

Segmental performance showed mixed results. The Home & Personal Care segment's sales declined by 10.8% year over year to $255.2 million, while the Global Pet Care segment's sales declined by 9.6% year over year. The Home & Garden segment's sales declined by 10.3% year over year to $189.2 million [1]. The company's adjusted EBITDA margin contracted by 140 basis points to 2.7% in the Home & Personal Care segment and by 290 basis points to 17.2% in the Global Pet Care segment [1].

Shares of Spectrum Brands Holdings have lost 17.4% in the past three months compared to the industry's decline of 0.8% [1]. The company has a cash balance of $122 million and an outstanding debt of $681.1 million as of June 29, 2025 [1].

The company suspended its fiscal 2025 earnings framework due to heightened uncertainty stemming from global trade conditions, evolving tariff policies, and the resulting softening in global consumer demand. However, Spectrum Brands reaffirmed its target of generating a free cash flow of $160 million in fiscal 2025. The company remains committed to its long-term financial strategy and continues to target a net leverage ratio of 2.0-2.5 times [1].

Analysts have a consensus rating of Buy with an average 1-year price target of $71.67, suggesting a potential 32.21% upside [2].

References:
[1] https://finance.yahoo.com/news/spectrum-brands-q3-earnings-sales-153600424.html
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3TZ2DF:0-spectrum-brands-holdings-inc-reports-results-for-the-quarter-ended-june-30-earnings-summary/