Spectrum Brands reports big profit beat but sales that fell well short

Spectrum Brands Holdings Inc. (SPB) reported Friday a fiscal third-quarter profit that beat expectations but a wide margin, but sales that fell well short of expectations, citing lower consumer demand, cooler weather and distractions from regulatory pressure to block the sale of its HHI business unit. The home, lawn and pet products company said net income for the quarter to July 2 rose to $1.86 billion, or 46.07 a share, from $32.7 million, or 80 cents a share, in the year-ago period. Excluding discontinued operations and nonrecurring items, such as the impairment of goodwill and of intangible assets, adjusted earnings per share rose to 75 cents from 54 cents and beat the FactSet consensus of 48 cents. Sales fell 10.1% to $735.5 million, below the FactSet consensus of $785.4 million. "We have been challenged by a number of unanticipated developments throughout this year, including lower consumer demand resulting in significant sales volatility to our retail customers, cooler weather in the third quarter exacerbating this trend for our Home and Garden business, and the DOJ lawsuit to block the sale of our [hardware and home improvement] business unit." The company affirmed its full-year outlook for sales to decline in the mid single-digits percentage range. The stock has gained 5.3% over the past three months while the S&P 500 has tacked on 8.2%.

-Tomi Kilgore

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08-11-23 0657ET

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