Executive Summary

Q1 FY2025 delivered organic net sales growth of 3.8%, adjusted gross margin of 40.0% (+50 bps YoY), adjusted EPS of $0.67 (+14% YoY), and adjusted EBITDA of $140.7M (+5.9% YoY), aided by distribution gains and ~$10M hurricane-related demand, partially offset by ~190 bps planned pricing/promo investments and FX headwinds .
The company raised FY2025 organic net sales outlook to 2–3% (from 1–2%) and reaffirmed adjusted EPS ($3.45–$3.65) and adjusted EBITDA ($625–$645M); Q2 guide: reported net sales flat to +1%, organic +2–3%, adjusted EPS $0.60–$0.70 with adjusted gross margin ~flat YoY at ~40.5% .
Free cash flow was $42.4M (5.8% of net sales) and net leverage improved to 4.7x; ENR paid down $25M of long-term debt (10th consecutive quarter) and declared a $0.30 dividend during Q1 .
Catalysts: raised organic sales outlook, sustained Project Momentum savings ($16M in Q1; ~$60M expected FY25), e-commerce growth initiatives (~30% target), new Armor All Podium Series launch, and plastic-free battery packaging rollout at Walmart starting March .

What Went Well and What Went Wrong

What Went Well
- Organic net sales +3.8% with distribution wins across Batteries (+4.0% organic) and Auto Care (+2.1% organic); Q1 adjusted EPS +14% and adjusted EBITDA +6% YoY .
- Adjusted gross margin reached 40.0% (+50 bps YoY), driven by ~$16M Project Momentum savings and modest product input cost improvement .
- Management emphasized progress on strategic growth pillars (distribution, innovation, digital economy) and confidence to raise FY25 organic sales outlook; “Project Momentum generated nearly $20 million of savings in the quarter…expect ~$60 million in total savings for the year” .
What Went Wrong
- Reported gross margin declined 50 bps YoY to 36.8% due to restructuring/network transition costs and FX; pricing/promo investments were a deliberate headwind (~1.9% to top-line) .
- Batteries & Lights segment profit fell 9.9% YoY to $119.3M (currency and hyperinflation impacts), despite net sales growth; Auto Care profit improved but remains smaller in absolute dollars .
- Q2 adjusted EPS guidance ($0.60–$0.70) is below prior-year $0.72, reflecting heavier investment in digital transformation and growth initiatives and FX pressure .

Financial Results

Quarterly Performance vs Prior Quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($USD Millions)	$701.4	$805.7	$731.7
Gross Margin % (Reported)	39.5%	38.1%	36.8%
Gross Margin % (Adjusted)	41.5%	42.2%	40.0%
Diluted EPS (GAAP, $)	-$0.61	$0.65	$0.30
Adjusted EPS ($)	$0.79	$1.22	$0.67
Adjusted EBITDA ($USD Millions)	$149.7	$187.3	$140.7
A&P % of Net Sales	5.4%	4.6%	7.3%
SG&A % of Net Sales (Adjusted)	16.9%	15.3%	16.3%

Quarterly Performance vs Prior Year and Estimates

Metric	Q1 2024	Q4 2024	Q1 2025	S&P Global Consensus
Net Sales ($USD Millions)	$716.6	$805.7	$731.7	Unavailable (consensus not retrieved)
Adjusted EPS ($)	$0.59	$1.22	$0.67	Unavailable (consensus not retrieved)
Gross Margin % (Adjusted)	39.5%	42.2%	40.0%	Unavailable (consensus not retrieved)

Note: Consensus estimates via S&P Global were not available at time of request; comparisons to sell-side consensus are therefore not shown.

Segment Breakdown – Q1 FY2025

Segment	Net Sales ($USD Millions)	YoY Reported Growth	Organic Growth	Segment Profit ($USD Millions)	YoY Change
Batteries & Lights	$632.4	+2.4%	+4.0%	$119.3	-9.9%
Auto Care	$99.3	+0.5%	+2.1%	$20.5	+197.1%
Total	$731.7	+2.1%	+3.8%	$139.8	+0.4%

Drivers of Q1 organic growth included expanded distribution in Batteries & Lights (~~3.8%), hurricanes (~~$10M or ~1.4%), Auto Care distribution/international/digital, offset by planned pricing/promo investments (~1.9%) and FX .

KPIs – Q1 FY2025

KPI	Q1 2025
Operating Cash Flow ($USD Millions)	$77.0
Free Cash Flow ($USD Millions)	$42.4 (5.8% of Net Sales)
Dividend per Share ($)	$0.30 (declared Jan 24, 2025)
Long-term Debt Paydown ($USD Millions)	~$25
Net Debt ($USD Millions)	$2,936.1
Net Leverage (Net Debt / LTM Adj. EBITDA)	4.7x
Capital Expenditures ($USD Millions)	$34.6

Guidance Changes

Metric	Period	Previous Guidance (Nov 2024)	Current Guidance (Feb 2025)	Change
Reported Net Sales Growth	FY2025	+1% to +2%	+1% to +2%	Maintained
Organic Net Sales Growth	FY2025	+1% to +2%	+2% to +3%	Raised
Adjusted Gross Margin	FY2025	+50 bps to >41% (management outlook)	+50 bps to >41% (management outlook)	Maintained
Adjusted EPS ($)	FY2025	$3.45–$3.65	$3.45–$3.65	Maintained
Adjusted EBITDA ($USD Millions)	FY2025	$625–$645	$625–$645	Maintained
Reported Net Sales Growth	Q2 FY2025	—	Flat to +1%	New Q2 guide
Organic Net Sales Growth	Q2 FY2025	—	+2% to +3%	New Q2 guide
Adjusted EPS ($)	Q2 FY2025	—	$0.60–$0.70	New Q2 guide
Adjusted Gross Margin	Q2 FY2025	—	~Flat YoY at ~40.5%	New Q2 guide
Dividend	Q1 FY2025	—	$0.30/share declared	Announced

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 & Q4 2024)	Current Period (Q1 2025)	Trend
Distribution gains	Broad-based gains; expected to drive FY25; Auto Care international expansion	Key driver in Q1; management expects ~200 bps growth from distribution in FY25	Positive, continuing
Pricing & Promotions	Elevated investments (~300 bps in Q2/Q3 FY24); balancing volume and margin	~100 bps pricing investment FY25 (margin impact ~70 bps), front-end loaded	Ongoing, planned
Supply chain & tariffs	In-market production minimizes exposure; <5% COGS China sourcing	China procurement ~5% of COGS; Canada/Mexico <1%; pricing to mitigate any residuals	Managed risk
Input costs	Mixed, net modest benefit; commodity/freight favorable	Modest benefit; energy/labor up; some Asia freight uptick	Slight tailwind with pockets of pressure
E-commerce	+15% in FY2024; ambition to accelerate	Target ~30% growth in FY2025; stable private label dynamics	Accelerating
FX	Headwind began late CY2024; Q4 currency -$3.7M pre-tax	USD strength expected to pressure reported net sales; organic stronger	Headwind
Innovation	Child Shield coin lithium; Armor All Podium Series announced	Podium Series distribution secured at >15,000 retail locations globally	Launching
Leverage reduction	FCF and debt paydown lowered net leverage to 4.9x FY2024	Net leverage 4.7x; target ~4.5x by FY2025 year-end	Improving

Management Commentary

“We delivered organic net sales growth of nearly 4%…expanded adjusted gross margin by 50 basis points…grew adjusted EPS by 14%, and we paid down $25 million of debt” — Mark LaVigne, CEO .
“Project Momentum generated nearly $20 million of savings in the quarter…expect to finish fiscal ’25 with roughly $60 million in total savings for the year and approximately $200 million for the program” — Mark LaVigne, CEO .
“We are raising our full year organic sales guidance to be up 2% to 3% while reaffirming adjusted EPS and adjusted EBITDA…we continue to expect debt pay down in the range of $150 to $200 million and end 2025 with a net leverage ratio of around 4.5x” — John Drabik, CFO .
“We anticipate adjusted gross margin to be flat year-over-year at 40.5% [in Q2]…adjusted EPS in the range of $0.60 to $0.70 compared to $0.72 in the prior year…driven by increased investments in digital transformation and growth initiatives” — John Drabik, CFO .

Q&A Highlights

Tariffs exposure: consolidated procurement from China ~5% of COGS; Canada/Mexico <1%; committed to pricing if residual impacts persist .
Consumer tone: stable but cautious; value-seeking behavior persists; investments tailored to retailer needs and promotion/innovation .
Distribution contribution: management expects ~200 bps growth from distribution in FY2025; composition may vary among five growth pillars .
Pricing/promo investment: ~100 bps to top line in FY2025 (about ~70 bps margin impact); front-end loaded around holiday/new product launches .
E-commerce focus: target ~30% growth in FY2025; private label dynamics stable; expanding internationally .

Estimates Context

Wall Street consensus (S&P Global) was unavailable at time of request; management indicated that Q1 organic net sales and adjusted EPS were above their November guidance, enabling a raise to FY2025 organic sales outlook while reaffirming EPS/EBITDA ranges .
Near-term estimate revisions may reflect: higher organic sales trajectory, FX headwinds to reported revenue, and Q2 EPS guide below prior-year due to investment timing .

Key Takeaways for Investors

Raised FY2025 organic net sales outlook to 2–3% while maintaining adjusted EPS ($3.45–$3.65) and adjusted EBITDA ($625–$645M), signaling confidence in distribution, innovation, and digital growth pipelines .
Q1 quality: adjusted gross margin 40.0% (+50 bps YoY), adjusted EPS $0.67 (+14% YoY), balanced by deliberate pricing/promo investments and FX pressure; Auto Care segment profit +197% YoY highlights traction in international and product innovation .
Cash discipline: $42.4M FCF (5.8% of net sales), debt paydown ($25M), net leverage to 4.7x; company guides to 4.5x by year-end 2025 and continues $0.30 quarterly dividend, supporting deleveraging plus shareholder returns .
Q2 setup: adjusted EPS $0.60–$0.70 and adjusted GM ~flat YoY reflect planned investments in digital and growth initiatives; watch for e-commerce (~30% growth target), Armor All Podium rollout, and FX trajectory .
Risk monitoring: FX headwinds, energy/labor costs, tariff developments; mitigants include in-market production, sourcing optimization, and pricing actions if necessary .
Strategic initiatives: plastic-free battery packaging debut at Walmart in March enhances merchandising and sustainability positioning; potential for broader retail adoption in 2025 .
Segment mix: watch Batteries & Lights margin recapture vs Auto Care growth; management expects continued distribution tailwinds and steady category volumes supporting the top-line algorithm .

Other Q1 FY2025 Press Releases

Plastic-free battery packaging rollout at Walmart beginning March 2025, supporting retail merchandising efficiency and consumer sustainability preferences .
Quarterly dividend of $0.30 per share declared (payable March 13, 2025) .

ENERGIZER HOLDINGS, INC. (ENR)·Q1 2025 Earnings Summary