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ENERGIZER HOLDINGS, INC. (ENR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clean beat: net sales $725.3M vs Street $693.1M, and adjusted EPS $1.13 vs $0.62; guidance raised for FY25 Adjusted EPS to $3.55–$3.65 and Adjusted EBITDA to $630–$640M. The beat was driven by Section 45X production credits, Project Momentum savings, and resilient Batteries & Lights volume; pricing and promotional spend partially offset . EPS and revenue consensus values retrieved from S&P Global*.
  • Reported gross margin expanded to 55.1% (Adjusted 44.8%, +330 bps YoY) as the company recognized $112.4M of production credits (including $33.9M tied to FY25) and realized ~$12M Project Momentum savings in the quarter .
  • FY25 outlook increased: Net sales +1% to +3%, Adjusted EPS $3.55–$3.65, Adjusted EBITDA $630–$640M; Q4 Adjusted EPS guided to $1.05–$1.15 with ~$20M transitory cost headwind (tariffs levied earlier/higher and network realignment inefficiencies) .
  • Capital allocation remained active: repurchased 2.8M shares for $62.6M in Q3 and an additional 1.2M post-quarter; dividends ~$21M ($0.30/share) in Q3; net debt at $3.19B at 6/30/25 .

What Went Well and What Went Wrong

What Went Well

  • Organic volumes rose 1.7%, with Batteries & Lights benefiting from new and expanded distribution; APS NV added $20.8M to net sales, and overall net sales grew 3.4% YoY to $725.3M .
  • Adjusted gross margin improved 330 bps to 44.8% on FY25 production credits ($33.9M) and Project Momentum savings (~$12M); Adjusted EBITDA rose to $171.4M (+14.5% YoY) .
  • Management raised FY25 Adjusted EPS and Adjusted EBITDA guidance, citing pricing, tariff mitigation, and production credits; CEO: “We are increasing our outlook… confident in our ability to generate ongoing earnings growth” .

What Went Wrong

  • Strategic pricing and promotional investments (1.6%) and increased freight/warehousing (network rebalancing) pressured margins; APS NV carries slightly lower margin .
  • SG&A (ex restructuring/acquisition/litigation) rose to 17.0% of sales ($123.6M), driven by APS NV SG&A, digital transformation, and legal fees—only partly offset by ~$3M Momentum savings .
  • Q4 set-up includes ~$20M transitory gross margin headwinds (earlier/higher tariffs and short-term operational inefficiencies), and Organic Net Sales guidance is flat to down 2% in Q4 .

Financial Results

MetricQ1 2025Q2 2025Q3 2025Q3 2025 Consensus*
Net Sales ($USD Millions)$731.7 $662.9 $725.3 $693.1*
Reported EPS ($USD)$0.30 $0.39 $2.13 —
Adjusted EPS ($USD)$0.67 $0.67 $1.13 $0.62*
Adjusted EBITDA ($USD Millions)$140.7 $140.3 $171.4 —
Reported Gross Margin (%)36.8% 39.1% 55.1% —
Adjusted Gross Margin (%)40.0% 40.8% 44.8% —

Values retrieved from S&P Global*.

Segment Breakdown

Metric ($USD Millions)Q3 2024Q3 2025
Batteries & Lights Net Sales$509.1 $535.1
Auto Care Net Sales$192.3 $190.2
Total Net Sales$701.4 $725.3
Batteries & Lights Segment Profit$129.4 $158.8
Auto Care Segment Profit$26.8 $24.1
Total Segment Profit$156.2 $182.9

KPIs and Balance Sheet

KPIQ3 2025
Operating Cash Flow (9M)$85.6M
Free Cash Flow (9M)$16.5M (~1% of Net Sales)
Share Repurchases2.8M shares for $62.6M in Q3; 1.2M shares post-quarter
Dividend~$21M ($0.30 per share) in Q3
Net Debt$3,190.3M at 6/30/2025
Inventories$870.1M at 6/30/2025

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Net Sales (Reported)FY 2025Flat to +2% +1% to +3% Raised
Organic Net SalesFY 2025Flat to +2% Flat to +2% Maintained
Adjusted EPSFY 2025$3.30 – $3.50 $3.55 – $3.65 Raised
Adjusted EBITDAFY 2025$610M – $630M $630M – $640M Raised
Q4 Net Sales (Reported)Q4 2025—+2% to +4% New detail
Q4 Organic Net SalesQ4 2025—Flat to down 2% New detail
Q4 Adjusted EPSQ4 2025—$1.05 – $1.15 New detail
Q4 Gross Margin HeadwindQ4 2025—~-$20M (tariffs & network inefficiencies) New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 and Q2)Current Period (Q3 2025)Trend
Tariffs & Macro“Limited direct impact from tariffs due to sourcing shifts and pricing; more cautious consumer” (Q2) Q4 to be impacted by ~$20M costs, including tariffs levied earlier/higher; FY25 outlook still raised Near-term headwind; medium-term mitigated
Production Credits (45X)Not in Q1/Q2 results; outlooks excluded credits (Q2) Recognized $112.4M total credits ($33.9M FY25), boosting margins/EPS; FY25 includes $40–$45M benefit before reinvestment Positive tailwind emerging
Project Momentum SavingsSavings of ~$16M per quarter in Q1/Q2 ~$12M quarterly savings; continuing to support margins Sustained execution
Pricing & PromotionsStrategic investments offset volume gains in Q1/Q2 Pricing/promos (-1.6%) offset part of volume growth Ongoing commercial balancing
Segment PerformanceBatteries & Lights volume growth; Auto Care mixed (timing effects) (Q1/Q2) Batteries & Lights +5.1% reported; Auto Care -1.1% reported; B&L segment profit +22.7% YoY B&L strengthening; Auto Care modest
Network TransitionInefficiencies and freight/packaging costs during transition (Q1/Q2) Short-term operational inefficiencies persist; targeted to realign network Improving but still transitory
Digital TransformationSG&A up for digital & growth initiatives (Q2) SG&A % 17.0% ex adjustments on continued investments Continuing investment

Management Commentary

  • CEO Mark LaVigne: “We are increasing our outlook to reflect the higher level of earnings generated by pricing, tariff mitigation efforts and the inclusion of production credits… confident in our ability to generate ongoing earnings growth” .
  • Operating highlights: “Positioned to fully offset earnings impact from tariffs… Foundation is bolstered by ongoing production credits… Expect to generate 7%–10% Adjusted EPS growth in 2025; strongly positioned to drive earnings growth in 2026” (earnings slides) .
  • Commercial execution: Batteries value and volume share gains in U.S.; Armor All Podium Series now on shelves in over 15,000 stores globally .

Q&A Highlights

Note: The full Q3 2025 earnings call transcript was not retrievable; highlights below reflect prepared remarks and the earnings slides.

  • Production credits mechanics: Management outlined Section 45X credits recognition ($112.4M total recognized; $33.9M tied to FY25) and their margin/EPS impact, with FY25 benefit estimated at $40–$45M before reinvestment .
  • Tariffs and Q4 outlook: Q4 gross margin expected to be impacted by ~$20M in transitory costs, including earlier/higher tariffs; despite this, FY25 EPS/EBITDA guidance was raised .
  • APS NV acquisition: Contributed $20.8M to Q3 net sales; integration underway with slightly lower margin profile near term .

Estimates Context

  • EPS: Adjusted EPS of $1.13 materially beat the Street’s $0.62 (7 estimates), aided by production credits and Momentum savings; Adjusted EPS excluding credits was $0.78, still near consensus, highlighting the credits’ incremental impact . EPS consensus values retrieved from S&P Global*.
  • Revenue: Net sales of $725.3M beat the Street’s $693.1M (4 estimates), supported by volume growth (+1.7%), APS NV contribution ($20.8M), and FX/hyperinflation dynamics . Revenue consensus values retrieved from S&P Global*.

Key Takeaways for Investors

  • The beat-and-raise quarter was driven by structural tailwinds (45X credits, Project Momentum) and commercial execution in Batteries & Lights; expect FY25 earnings to trend toward the upper half of updated ranges if Q4 transitory costs are contained .
  • Near-term watch items: ~$20M Q4 gross margin headwind from tariffs and network realignment; monitor cadence of credits and reinvestment, and trajectory of SG&A tied to digital/growth .
  • APS NV adds European scale and ~$40–$50M in FY25 net sales; margin accretion may be gradual given slightly lower margin profile and integration .
  • Capital returns remain active (4M total shares repurchased Q3+post Q3; $0.30 dividend), but leverage and net debt ($3.19B) warrant continued scrutiny alongside FCF conversion (9M FCF $16.5M) .
  • Batteries & Lights momentum and U.S. manufacturing positioning (credits) underpin medium-term margin resilience; Auto Care is stable to modestly down on timing/mix—watch innovation and international expansion to re-accelerate .
  • Narrative catalysts: production credits validation and guidance uplift; Q4 execution against transitory headwinds and tariff mitigation will be key for sustaining positive estimate revisions .
* Values retrieved from S&P Global