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EH

ENERGIZER HOLDINGS, INC. (ENR)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 revenue rose 3.4% to $832.8M, but adjusted EPS of $1.05 was below Wall Street consensus, while revenue modestly beat; adjusted EBITDA declined due to tariff and network transition costs and APS mix .
  • FY 2025 delivered adjusted EPS of $3.52 (+6% YoY) and adjusted EBITDA of $623.6M, aided by $41.6M production credits and ~$50M Project Momentum savings; reported gross margin expanded to 41.7% .
  • FY 2026 guidance initiated: adjusted EPS $3.30–$3.60, adjusted EBITDA $580–$610M, organic net sales flat to slightly up; Q1 2026 expected to be weaker (HSD organic sales decline; EPS $0.20–$0.30) before double-digit EPS growth in Q2–Q4 .
  • Management sees transitory Q1 tariff/operational costs, e-commerce strength (+35% in Q4), and APS integration as catalysts for margin recovery and earnings ramp through FY 2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue growth of 3.4% in Q4 2025 to $832.8M, supported by $42.8M acquisition contribution; Auto Care grew +1.0% and Batteries & Lights +3.9% .
    • FY 2025 adjusted EPS rose 6% to $3.52 and reported gross margin expanded to 41.7%, reflecting production credits and Project Momentum savings .
    • CEO: “We adjusted quickly… and executed with discipline to deliver a strong year,” highlighting extension of Project Momentum and APS integration to preserve margins .

  • What Went Wrong

    • Q4 adjusted gross margin fell 370 bps to 38.5% on production inefficiencies, warehousing/distribution, tariff costs, and lower APS margin profile .
    • Q4 adjusted EBITDA declined to $171.2M, and adjusted EPS was $1.05, pressured by higher SG&A, tariffs, and unfavorable currency; interest expense rose on higher debt .
    • Demand softness in batteries late in the year (North America) and tighter retailer inventories weighed on volumes; management expects stabilization as comps ease in FY 2026 .

Financial Results

  • Quarterly comparison (oldest → newest)
MetricQ4 2024Q3 2025Q4 2025
Revenue ($USD Millions)$805.7 $725.3 $832.8
Diluted EPS (GAAP) ($)$0.65 $2.13 $0.50
Adjusted Diluted EPS ($)$1.22 $1.13 $1.05
Gross Margin % (Reported)38.1% 55.1% 36.6%
Gross Margin % (Adjusted)42.2% 44.8% 38.5%
Adjusted EBITDA ($USD Millions)$187.3 $171.4 $171.2
  • Segment performance (Q4 YoY)
SegmentQ4 2024Q4 2025
Batteries & Lights Net Sales ($USD Millions)$651.6 $677.2
Auto Care Net Sales ($USD Millions)$154.1 $155.6
Total Net Sales ($USD Millions)$805.7 $832.8
Batteries & Lights Segment Profit ($USD Millions)$179.5 $151.8
Auto Care Segment Profit ($USD Millions)$20.0 $25.8
Total Segment Profit ($USD Millions)$199.5 $177.6
  • KPIs (FY, oldest → newest)
KPIFY 2024FY 2025
Operating Cash Flow ($USD Millions)$429.6 $147.1
Free Cash Flow ($USD Millions)$339.0 $63.2
Net Debt ($USD Millions)$2,990.8 $3,195.5
SG&A (Adjusted) ($USD Millions)$473.1 $495.5
SG&A (Adjusted) % of Sales16.4% 16.8%
A&P % of Net Sales5.0% 5.1%
Dividends Paid ($USD Millions)$87.4 $87.1
Share Repurchases (# shares; avg price)—4.0M; $22.42
  • Actual vs Consensus (Q4 2025)
MetricConsensus*ActualSurprise
Revenue ($USD Millions)$827.97*$832.8 +$4.83
Adjusted EPS ($)$1.164*$1.05 -$0.114
EBITDA ($USD Millions)$178.87*$171.2 -$7.67

Values retrieved from S&P Global.
Note: EPS refers to adjusted diluted EPS; EBITDA refers to company-reported adjusted EBITDA.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS ($)FY 2026N/A$3.30–$3.60 Initiated
Adjusted EBITDA ($USD Millions)FY 2026N/A$580–$610 Initiated
Organic Net SalesFY 2026N/AFlat to slightly up Initiated
Adjusted Gross MarginFY 2026N/AModest decline Initiated
Organic Net SalesQ1 2026N/ADown high-single digits Initiated
Adjusted EPS ($)Q1 2026N/A$0.20–$0.30 Initiated
Free Cash Flow % of Net SalesFY 2026N/A>10% Initiated
Dividend per share ($)Quarterly$0.30 (Q3) $0.30 (Q4 declaration) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2, Q-1)Current PeriodTrend
Tariffs & supply chainQ2: Tariff impacts broadly offset via sourcing and pricing; cautious consumer; network transition ongoing . Q3: Transitory costs (~$20M) expected in Q4 due to tariffs/network realignment .Q4: Transitory tariff/operational costs pressured Q4; similar in Q1 2026, easing thereafter; network realignment done by end of Q1 .Improving post-Q1
Production credits (Sec. 45X)Q3: Recorded $112.4M credits (incl. $78.5M retro); $33.9M benefit in quarter .CFO sees $15–$20M annual upside vs prior levels starting FY 2026 .Improving
E-commerce & channelQ3: Strength in e-commerce; innovation driving Auto Care .Q4: E-commerce +35% in Q4; +25% FY; +15% expected in FY 2026; tighter retailer inventories .Improving demand mix
APS integrationQ3: APS contributed $20.8M sales; slight margin dilution .Q4: APS inclusion lowers margins near-term; transitioning to Energizer brands to help margins in FY 2026 .Improving through FY26
Consumer/categoryQ2: More cautious consumer; FY 2025 organic net sales flat to up 2% . Q3: Category outlook upgraded; FY EPS/EBITDA guidance raised .Q4: Battery category assumed -3–4% in Q1, ~-2% FY; stabilization later in FY 2026 .Stabilizing later
Leverage & FCFQ3: FCF modest YTD; inventory up on packaging transition; refinanced facilities .Q4: OCF $147.1M; FY FCF $63.2M; $80M debt repaid post-year-end; FY26 target >10% FCF-to-sales .Improving in FY26

Management Commentary

  • “We adjusted quickly, found opportunities, and executed with discipline to deliver a strong year… By extending Project Momentum and accelerating integration efforts, we will preserve margins and build flexibility to invest in future growth” — CEO Mark LaVigne .
  • “As we get past the first quarter, we should benefit from getting past the transitional operational inefficiencies… transitioning the APS business to our branded portfolio… low single-digit top-line growth and normalized gross margins… EPS growth of low double digits” — CFO John Drabik .
  • “We saw our e-commerce business grow more than 35% in Q4… 25% for the year… expect 15% growth in 2026… Energizer is gaining share over 4, 13, and 52 weeks” — CEO Mark LaVigne .
  • “We think there could be upside of $15–$20M over what we’ve generated to date per year [in production credits]… anticipate that in 2026” — CFO John Drabik .

Q&A Highlights

  • FY 2026 phasing and confidence: Management outlined Q1 headwinds (storm comp, display timing, category down 300–400 bps) and expects double-digit EPS growth in Q2–Q4 driven by normalized margins and APS integration .
  • Consumer softness and category behavior: Demand weakened late Q4; consumers drained inventories/shifted channels and pack sizes; management assumes battery category down ~2% FY 2026 with stabilization later in the year .
  • E-commerce/channel dynamics: Strong e-commerce growth and share gains across time frames; retailers managing inventories tightly into Q1, affecting replenishment timing .
  • Production credits magnitude: Expect incremental $15–$20M annual benefit starting FY 2026 from domestic manufacturing optimization .
  • Leverage and capital allocation: Priority to pay down $150–$200M debt in FY 2026; paid down ~$80M post-year-end; FCF expected >10% of sales as inventory/capex from packaging transition normalize .

Estimates Context

  • Q4 2025 results vs S&P Global consensus: revenue beat by ~$4.8M, adjusted EPS missed by ~$0.11, adjusted EBITDA missed by ~$7.7M. Consensus reflected higher EBITDA than company’s adjusted result; management pointed to transitory tariff and network costs and APS mix as primary drivers .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term caution: Expect Q1 FY 2026 pressure from tariffs/operational inefficiencies and tight retailer inventories; narrative sets up for recovery thereafter .
  • Earnings ramp catalyst: Network realignment completion, APS brand transition, and Project Momentum savings underpin double-digit adjusted EPS growth in Q2–Q4 FY 2026 .
  • Structural margin supports: Production credits (with potential $15–$20M annual upside) and pricing actions help offset tariffs; APS integration should reduce dilution over time .
  • E-commerce and international: Strong e-commerce momentum and international expansion are key growth vectors to offset softer North America demand .
  • Balance sheet focus: Debt repayments underway ($80M post-year-end) and FY 2026 FCF-to-sales >10% target support deleveraging despite higher FY 2025 net debt .
  • Estimate resets: Consensus may need to reflect Q1 transitory costs and APS margin mix; trajectory implies raising back-half FY 2026 EPS as visibility improves. Values retrieved from S&P Global.
  • Trading implications: Near-term volatility into Q1 print; watch for signs of margin normalization, APS brand transition milestones, and e-commerce growth to confirm ramp in Q2–Q4.