Spectrum Brands Holdings Inc. (NYSE: SPB) announced its fiscal third-quarter profit on Friday, exceeding expectations by a wide margin. However, the company reported sales that fell well short of expectations as lower consumer demand, cooler weather, and regulatory pressure impacted its performance.
For the quarter ending July 2, net income rose significantly to $1.86 billion, or $46.07 per share, compared to $32.7 million, or $0.80 per share, in the same period last year. Adjusted earnings per share, excluding discontinued operations and nonrecurring items, increased to $0.75 from $0.54, surpassing the FactSet consensus of $0.48.
Despite strong profit growth, sales experienced a decline of 10.1% to $735.5 million, falling short of the FactSet consensus of $785.4 million.
Factors Affecting Performance
Spectrum Brands Holdings attributed its underwhelming sales performance to several unanticipated factors throughout the year. These included lower consumer demand leading to significant sales volatility for retail customers. Additionally, cooler weather in the third quarter exacerbated this trend for the Home and Garden business segment. The company also mentioned the DOJ lawsuit to block the sale of its hardware and home improvement (HHI) business unit as a notable distraction.
The company reaffirmed its full-year outlook, expecting sales to decline in the mid-single digits percentage range.
Over the past three months, Spectrum Brands Holdings’ stock has gained 5.3%, while the S&P 500 has seen an increase of 8.2%.