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Spectrum Brands Holdings, Inc. (SPB)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 results: revenue $733.5M (-5.2% y/y; +4.8% q/q), gross margin 35.0% (-220 bps y/y), GAAP EPS $2.19 and adjusted EPS $2.61 . Versus consensus, revenue was modestly below ($738.6M est.) while adjusted EPS materially beat ($0.91 est.) as tax benefits and lower share count offset margin pressure (S&P Global)*.
  • Segment mix: H&G returned to growth (+3.2% y/y) aided by late-season demand; GPC modestly down (-1.5%) with better margins; HPC declined double digits (-11.9%) on U.S./EMEA softness and supply constraints .
  • Guidance reinstated: FY26 framework calls for flat to low single-digit net sales growth, low single-digit adjusted EBITDA growth, and ~50% adjusted FCF conversion; capex $50–60M, cash taxes $40–50M, D&A $115–125M, corporate costs ~$66M (vs $54M FY25) .
  • Balance sheet/capital returns: Ended Q4 with net leverage 1.58x, cash $123.6M, liquidity $615.9M; repurchased ~4.4M shares ($326M) in FY25 and another ~0.4M post year-end ($21.5M). Quarterly dividend of $0.47 declared Nov 11 .

What Went Well and What Went Wrong

  • What Went Well

    • Adjusted EPS delivered a sizable beat vs consensus ($2.61 vs $0.91 est.) on a one-time tax benefit, lower shares, and disciplined OpEx control despite gross margin pressure (S&P Global; management attribution) .*
    • H&G grew 3.2% y/y as late-season demand supported Controls; innovation (Spectracide Wasp/Hornet/Yellowjacket Trap; Hot Shot Flying Insect Trap) outperformed and is set for broader FY26 distribution .
    • GPC margin expanded 200 bps (16.6% vs 14.6%) on cost savings and pricing; Nature’s Miracle, Good Boy, and Aquatics distribution gains supported mix .
    • Management quote: “We believe that the worst of the tariff and economic disruptions…are now behind us…GPC and H&G [are] to return to growth in 2026.” .

  • What Went Wrong

    • Revenue declined 5.2% y/y; gross margin fell 220 bps on lower volume, mix, inflation, and tariffs; HPC revenue -11.9% y/y and margin -30 bps on U.S./EMEA softness and prior supply constraints .
    • Adjusted EBITDA fell 8% y/y to $63.4M; adjusted EBITDA margin -30 bps to 8.6% .
    • Supply interruptions from earlier pause of China-sourced imports continued to impact fill rates in GPC/HPC into Q4; U.S./EMEA demand in HPC remained soft .

Financial Results

Overall performance vs prior periods and estimates

MetricQ2 FY25Q3 FY25Q4 FY25Notes
Revenue ($M)675.7 699.6 733.5 +4.8% q/q; -5.2% y/y in Q4
Gross Margin (%)37.5% 37.8% 35.0% -220 bps y/y in Q4
GAAP Diluted EPS (Cont. Ops)$0.06 $0.83 $2.19 One-time tax benefit aided Q4
Adjusted EPS (Cont. Ops)$0.68 $1.24 $2.61 +169% y/y in Q4
Adjusted EBITDA ($M)71.3 76.6 63.4 -8% y/y in Q4
Adj. EBITDA Margin (%)10.6% 10.9% 8.6% -30 bps y/y in Q4

Versus S&P Global consensus (Q4 FY25)

MetricConsensusActualSurprise
Revenue ($M)738.6*733.5 -0.7%*
Adjusted/Primary EPS ($)0.91*2.61 +186%*

Values retrieved from S&P Global.*

Segment breakdown (Q4 FY25)

SegmentRevenue ($M)y/yAdj. EBITDA ($M)MarginCommentary
Global Pet Care298.1 -1.5% 49.6 16.6% Aquatics up HSD; Companion Animal down MSD; tariff/supply constraints, cost savings aided margins .
Home & Garden139.2 +3.2% 16.9 12.1% Late-season demand; mix/inflation/tariffs weighed on margin; innovation outperforming .
Home & Personal Care296.2 -11.9% 15.7 5.3% U.S./EMEA softness and prior supply pause; pricing and cost control partially offset .

Select balance sheet/FCF KPIs

KPIQ4 FY25
Cash$123.6M
Liquidity$615.9M (incl. $492.3M revolver availability)
Total Debt$581.4M
Net Debt$457.8M
Net Leverage1.58x Adj. EBITDA
FY25 Adjusted Free Cash Flow$170.7M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales GrowthFY26No FY25 framework; FY26 not provided previously Flat to low single-digit growth Reinstated framework
Adjusted EBITDA GrowthFY26n/aLow single-digit growth Reinstated framework
Adjusted FCF ConversionFY26n/a~50% of adjusted EBITDA New
Corporate CostsFY26~$54M FY25 actual baseline ~$66M; TSA reimbursements roll off; plan to mitigate ~$10M Higher baseline; mitigation planned
D&AFY26n/a$115–125M New
Cash TaxesFY26n/a$40–50M New
CapexFY26n/a$50–60M New
Restructuring/Strategic CashFY26n/a$25–35M New
DividendOngoingPrior cadence$0.47 per share declared Nov 11, 2025 Maintained

Earnings Call Themes & Trends

TopicQ2 FY25 (prior-2)Q3 FY25 (prior-1)Q4 FY25 (current)Trend
Tariffs/Trade PolicyPaused virtually all China imports for U.S.; pivot to maximize cash Stop-ship to some retailers; resumed imports as China rates fell; ~$20–25M additional pricing/concessions targeted for FY26 “Worst…behind”; gross exposure cut from ~$450M to ~$70–80M; largely mitigated via pricing, concessions, costs Stabilizing/mitigated
Supply Chain DiversificationAccelerating move out of China, esp. HPC Dual sourcing; out-of-stocks lingered GPC/H&G direct China spend targeted ~$15–20M by end FY26 Advancing
Pricing/Retailer NegotiationsPricing actions initiated Pricing put in place with major customers; some stop-ship weeks Pricing largely in place; HPC took price first, expecting category normalization Normalizing
ERP (S/4HANA)Go-lives planned (H&G in Q2 timing) Pull-forwards tied to ERP go-live Rolling internationally; extending to HPC; enabler for efficiency and optionality Implementation progressing
HPC Strategic AlternativesStated goal to find solution long-term Process delayed by tariff volatility Will revisit as volatility subsides; focus on profitability lift in FY26 On hold but intention intact
Consumer/MacroU.S./EMEA softness in GPC/HPC Q4 start improved; Home & Garden weather impact Demand stabilizing; H&G late-season strength Stabilizing
Weather/SeasonalityH&G inventory phasing Wet/cool start; late Q3 improvement Q4 H&G growth; late-season POS; FY26 normal weather assumed Improvement expected
M&APositioning SPB as consolidator (Pet/H&G) Active but disciplined; got outbid on one asset Optimistic; “consolidator of choice”; maintain low leverage Pipeline watch

Management Commentary

  • CEO (strategy/positioning): “We believe that the worst of the tariff and economic disruptions…are now behind us…Our adjusted free cash flow of $171 million…beat our own expectations…we are…positioned…to be the consolidator of choice within the pet and home and garden industries.” .
  • CEO (HPC): “We are hell-bent on improving the profitability…[and] excited to work towards a strategic solution…once again.” .
  • CFO (drivers of Q4): “Adjusted diluted EPS increased to $2.61, driven by a one-time tax benefit… and the reduction in shares outstanding, partially offset by lower adjusted EBITDA.” .
  • CFO (FY26 framework): “Adjusted EBITDA is expected to grow low single digits…Tariffs are expected to be largely offset…Corporate costs ~ $66M…Capex $50–60M; cash taxes $40–50M; D&A $115–125M.” .

Q&A Highlights

  • HPC options: Management reiterated unwillingness to discuss live M&A but confirmed intent to revisit strategic options as tariff volatility subsides; industry fragmentation could create opportunities .
  • Pet business trajectory: Shelf resets and distribution gains; improved POS; expect GPC to return to growth first; vision to grow Pet to $3B revenue and $500M EBITDA over time .
  • Pricing/elasticity: Less retail price taken than feared; largest increases in appliances; SPB “took its medicine” early—expects relative benefit as competitors price up .
  • ERP and carve-out: Expanding S/4HANA to HPC improves efficiency and carve-out readiness without delaying strategic options .
  • Tariff mitigation: Gross exposure cut materially; remaining impacts addressed via supplier concessions, cost actions, and pricing .

Estimates Context

  • Q4 FY25 comparisons vs S&P Global: Revenue $733.5M vs $738.6M est. (-0.7%); adjusted/primary EPS $2.61 vs $0.91 est. (+186%); 6 and 8 estimates respectively (S&P Global).* The EPS beat was driven by a one-time tax benefit, lower share count from buybacks, and lower OpEx, partially offset by weaker gross margin . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • EPS beat despite revenue softness signals strong tactical execution (tax planning, buybacks, OpEx control) amid persistent tariff/mix pressures; however, the beat’s quality is tempered by one-time tax benefits .
  • Reinstated FY26 framework (flat-to-LSD sales; LSD EBITDA growth; ~50% FCF conversion) resets expectations and should reduce uncertainty; Q1 FY26 flagged as the most challenged quarter .
  • H&G momentum plus GPC stabilization underpin FY26 growth; HPC remains a drag near term as U.S. SKU rationalization and supply chain simplification proceed .
  • Tariff risk now “largely mitigated” with diversified sourcing and pricing; remaining volatility remains a watch item but less acute than mid-year .
  • Balance sheet flexibility (1.58x net leverage) supports continued buybacks and selective M&A in Pet/H&G to compound growth and mix shift to consumables .
  • Trading implication: Expect near-term sentiment support from a large EPS beat and guidance reinstatement; watch for sell-side upward revisions to FY26 EPS/FCF tied to lower corporate costs and margin stabilization (S&P Global baseline updated in Q4).*
  • Medium term: Execution on HPC profitability and any strategic outcome is a key re-rating lever; Pet accretive M&A and continued innovation in H&G could expand margins and reduce cyclicality .

Other Relevant Press Releases During Q4 Window

  • Quarterly dividend: $0.47 per share payable Dec 9, 2025; record date Nov 24, 2025 .

Footnote: Values retrieved from S&P Global.*