Spectrum Brands posts narrower-than-expected loss but sales fall short due to weakness in home and garden segment

Spectrum Brands Holdings Inc. (SPB) posted a narrower-than-expected loss for its fiscal second quarter on Friday, but sales fell below consensus estimates. The Middleton, Wis.-based parent of brands in the home essentials, pet care and personal care sectors, posted a net loss of $53.7 million, or $1.31 a share, for the quarter to April 2, after income of $15.9 million, or 39 cents a share, in the year-earlier period. The company's adjusted per-share loss came to 14 cents, narrower than the 18 cent FactSet loss consensus. Sales fell to $729.2 million from $807.8 million a year ago, below the $759 million FactSet consensus. Sales were hurt by weakness in the home and garden segment, where key retail partners have continued to reduce inventory compared to a typical season build. However, Chief Executive David Maura said the company has settled with the Justice Department on the sale of its hardware and home improvement business to Assa Abloy for $4.3 billion in cash. It expects the deal to close by end-June. "This is a meaningful strategic pivot for Spectrum Brands, which will strengthen our balance sheet by making us a net debt free company, and allow us to devote all our resources to and prioritize the long-term growth of our remaining businesses," he said. The company is expecting fiscal 2023 sales do fall by mid single-digits. The FactSet consensus is for a 0.8% decline. The stock was not active premarket but has gained 17% in the year to date, while the S&P 500 has gained 8%.

-Ciara Linnane

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05-12-23 0649ET

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