ENR - Energizer Holdings gains after guidance surprises to the upside

Energizer Holdings ( NYSE: ENR ) gained in early trading on Monday despite falling short with its FQ1 earnings report. A solid outlook from the St. Louis-based company may keep investors confident.

Organic sales fell 5.4% during the quarter due to in part to lower volumes driven by the timing of holiday orders in the battery business, and category declines from higher retail pricing and retailer inventory management across both battery and auto care. Energizer ( ENR ) also exited some lower margin profile battery customers and products resulting in approximately 1.5% decline to organic sales.

Adjusted gross margin was up 150 basis points to 39.0% of sales. The gross margin rate also improved sequentially by 150 basis points.

Operating cash flow for the quarter was $161.0M and free cash flow was $152.2M. Debt pay down in the quarter was $55.7M and net debt decreased by $74.2M. Net debt to adjusted EBITDA was 5.9X as of December 31.

Guidance from Energizer ( ENR ) was for FY23 adjusted EBITDA in the range of $585M to $615M vs. $597M consensus and adjusted earnings per share in the range of $3.00 to $3.30 vs. consensus of $3.15.

CEO outlook: "Our categories remain strong and we believe our brands continue to be chosen by consumers, which is particularly important in today's evolving macroeconomic environment. We continue to execute on our strategic priorities, and are confident in our ability to deliver on our current year plans as well as our long-term objectives."

Energizer ( ENR ) showed a 2.01% gain in very light premarket trading on Monday.

For further details see: