ENR - Energizer Holdings slides to 2023 low after earnings misfire
2023-08-08 11:33:06 ET
Energizer Holdings ( NYSE: ENR ) swung 12.57% lower after the consumer products company missed estimates with its FQ3 earnings report and set full-year adjusted EBITDA guidance below expectations.
Total sales were down 3.9% during the quarter, and organic sales fell 2.7%. Volume declines across the battery business impacted organic revenue by approximately 4.5% due to weaker performance at a number of non-tracked retail customers during the quarter and general economic headwinds impacting category performance. Meanwhile, volume declines in Energizer's ( ENR ) auto care business of approximately 3.0% were largely due to cooler weather in the quarter negatively impacting refrigerant sales. There was also a volume decline of approximately 1.5% from the planned exit of low margin business and a decline in sales to device manufacturers due to their delay of new product launches. Partially offsetting the volume declines was the continued benefit of global pricing actions in both the battery and auto care businesses, which contributed approximately 6.5% to organic sales.
Excluding restructuring costs and prior year costs related to the flooding of the St. Louis-based company's Brazil plant, adjusted gross margin was 38.8% vs. 40.4% a year ago. The gross margin drop was largely driven by higher operating costs, including raw materials, the timing of inventory builds in the prior year, ongoing inflationary trends and adverse currency impacts. The gross margin decline was partially offset by the continued benefit of pricing initiatives, Project Momentum savings of $10.7M, and the benefit of exiting lower margin battery businesses.
On Wall Street, Morgan Stanley analyst Dara Mohsenian observed that the quarterly EPS ($0.54 vs. $0.69 consensus) miss for ENR contrasted to the generally upside results within the broad household and personal care sector. "Though we were bracing for some challenges, we did not anticipate it to be this severe," noted RBC Capital Markets analyst Nik Modi on the quarter.
Energizer ( ENR ) traded at a 2023 low of $30.52 earlier in the Tuesday session.
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Energizer Holdings slides to 2023 low after earnings misfire