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Spectrum Brands Holdings (SPB)
NYSE:SPB
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Spectrum Brands Holdings
(NYSE:SPB)
Rating:58Neutral
Price Target:
$58.00
▲(4.66%Upside)
Positive Factors
Earnings Performance
SPB reported mixed Q1 2025 results with sales broadly in line, with a big beat in H&G and sizable miss in GPC, and adjusted EPS and EBITDA beating consensus by 11% and 16%, respectively.
Share Buybacks
The company will aggressively buy back stock at current levels, providing a floor to the stock.
Stock Rating
The stock has been upgraded to BUY, with an increased price target.
Negative Factors
Pet Ownership Trends
21% of surveyed locations reported worse pet ownership trends, with cost being the main driver.
Target Price Adjustment
Price target for SPB is lowered due to reduced estimates and a lower target multiple.
Tariffs Impact
The HPC business will be most impacted by recently announced tariffs.
Spectrum Brands Holdings (SPB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.30B
Dividend Yield3.45%
Average Volume (3M)724.15K
Price to Earnings (P/E)25.3
Beta (1Y)0.81
Revenue Growth1.46%
EPS Growth-95.70%
CountryUS
Employees3,100
SectorConsumer Cyclical
Sector Strength57
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)0.68
Shares Outstanding24,534,650
10 Day Avg. Volume1,064,112
30 Day Avg. Volume724,154
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.23
Price to Sales (P/S)0.00
P/FCF Ratio-6.60
Enterprise Value/Market Cap3.52
Enterprise Value/Revenue0.39
Enterprise Value/Gross Profit4.14
Enterprise Value/Ebitda4.02
Forecast
1Y Price Target
$75.00Price Target Upside35.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Spectrum Brands Holdings Business Overview & Revenue Model
Company DescriptionSpectrum Brands Holdings, Inc. is a diversified global branded consumer products and home essentials company. It operates in various sectors including home and garden, hardware and home improvement, and pet care. The company offers a wide range of products such as small household appliances, residential locksets, plumbing products, and pet care supplies, marketed under well-known brand names.
How the Company Makes MoneySpectrum Brands Holdings generates revenue primarily through the sale of branded consumer products across its diverse portfolio. Its key revenue streams include sales from its hardware and home improvement segment, which encompasses residential locksets and plumbing products, and its home and garden segment, which includes small household appliances and personal care products. The pet care segment also contributes significantly by providing a variety of pet supplies under recognized brands. The company leverages established distribution channels and partnerships with retailers and distributors to maximize its market reach and sales. Additionally, Spectrum Brands benefits from strategic acquisitions and brand development to enhance its product offerings and expand its consumer base.
Spectrum Brands Holdings Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q2-2025)
| % Change Since: -9.71%|
Next Earnings Date:Aug 08, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strategic adjustments and a strong financial position as key positives. However, significant challenges were presented by increased tariffs and deteriorating consumer sentiment, impacting sales and profitability. The company is taking proactive steps to mitigate these challenges but faces uncertainties in the short term.Q2-2025 Updates
Positive Updates
Strong Financial Position
Spectrum Brands Holdings reported a net leverage of just 1.7 turns, with expectations for leverage to decrease by year-end due to significant free cash flow generation in the second half of the fiscal year.
Strategic Supply Chain Adjustments
The company is expediting the relocation of its supply chain out of China, with significant progress anticipated by the end of the fiscal year for Global Pet Care and Home and Garden segments.
Free Cash Flow Target
Spectrum Brands aims to generate approximately $160 million in free cash flow for the year, equating to $6 to $7 per share.
Share Repurchases
The company repurchased approximately 2 million shares during the second quarter and has returned over $1.28 billion of capital to shareholders since the close of the HHI transaction.
Negative Updates
Impact of Tariffs
The company faces significant challenges due to increased tariffs on Chinese goods, leading to a pause in sourcing finished goods from China and impacting the Home and Personal Care segment.
Deteriorating Consumer Sentiment
Sales were negatively affected by softer than expected US consumer sentiment, impacting category growth and leading to a 6% decrease in net sales.
Adjusted EBITDA Decline
Adjusted EBITDA decreased by $41 million to $71.3 million, driven by lower volumes, reduced gross margins, and increased investment in brand-focused areas.
Company Guidance
During the Q2 2025 earnings call for Spectrum Brands Holdings, significant guidance was provided amidst a challenging global economic landscape. The company is navigating volatile tariff situations, particularly with tariffs on Chinese goods reaching up to 70%, affecting approximately 40% of its Home and Personal Care (HPC) purchases for the U.S. market. Spectrum Brands is expediting the movement of its supply chain out of China, aiming to source 35% of HPC's current U.S. volume from non-Chinese sources by the end of fiscal 2025, with plans to increase to the mid-forties by year-end. Despite a 6% decrease in net sales, the company remains financially robust, with a net leverage of 1.7 turns and an expectation to generate $160 million in free cash flow for the year, equivalent to $6-$7 per share. The company is pausing share repurchases to maintain a strong balance sheet and is focused on strategic investments and potential acquisitions, particularly within the Global Pet Care segment, which saw a 7.1% sales decrease. The Home and Garden segment experienced a 5.2% sales decline due to timing shifts and seasonal factors, though it remains relatively insulated from tariff impacts. Overall, Spectrum Brands is prioritizing agility and operational efficiency to weather current economic uncertainties, with a focus on long-term strategic growth.Spectrum Brands Holdings Financial Statement Overview
Summary
Spectrum Brands Holdings presents a mixed financial outlook. While operational efficiency and leverage are managed well, revenue inconsistencies and declining free cash flow growth pose challenges. The company's financial resilience is supported by a strong equity base and conservative debt usage, but profitability and cash flow stability need improvement to enhance overall financial health.Income Statement
The TTM revenue shows a slight decline compared to previous annual data, with a gross profit margin of 37.64% and a net profit margin of 2.02%. The EBIT margin is 4.57%, reflecting a moderate operational efficiency, while EBITDA margin stands at 8.26%. Revenue growth has been inconsistent, with recent declines indicating some volatility in sales performance.65
Positive
Balance Sheet
The debt-to-equity ratio is 0.38, indicating a conservative leverage position. ROE is 3.14%, which is relatively low, suggesting limited returns for shareholders. The equity ratio is 53.30%, reflecting a strong equity buffer against liabilities. The balance sheet reveals a stable financial structure but limited profitability growth.60
Neutral
Cash Flow
Free cash flow has decreased recently, with a TTM operating cash flow to net income ratio of 1.93, suggesting strong cash generation relative to net income. The free cash flow to net income ratio is 1.28, indicating efficient cash use. However, the decline in free cash flow growth reflects challenges in maintaining cash flow stability.55
Neutral
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.25B | 2.96B | 2.92B | 3.13B | 3.00B | 2.62B |
| Gross Profit | 2.10B | 1.11B | 924.80M | 990.40M | 1.03B | 878.10M |
| EBITDA | 781.80M | 323.90M | -72.00M | 108.40M | 222.40M | 244.10M |
| Net Income | -208.90M | 124.80M | 1.80B | 71.60M | 189.60M | 97.80M |
Balance Sheet | ||||||
| Total Assets | 5.04B | 3.84B | 5.26B | 5.78B | 5.34B | 5.11B |
| Cash, Cash Equivalents and Short-Term Investments | 142.20M | 368.90M | 1.86B | 243.70M | 187.90M | 531.60M |
| Total Debt | 2.42B | 647.80M | 1.65B | 3.21B | 2.55B | 2.47B |
| Total Liabilities | 3.57B | 1.70B | 2.74B | 4.51B | 3.86B | 3.69B |
| Stockholders Equity | 1.46B | 2.14B | 2.52B | 1.26B | 1.47B | 1.41B |
Cash Flow | ||||||
| Free Cash Flow | 817.90M | 118.60M | -468.70M | -117.80M | 244.80M | 246.20M |
| Operating Cash Flow | 913.30M | 162.60M | -409.70M | -53.80M | 288.40M | 290.30M |
| Investing Cash Flow | -891.40M | 1.02B | 3.18B | -359.80M | -423.50M | 108.30M |
| Financing Cash Flow | 148.70M | -1.58B | -2.26B | 487.60M | -209.90M | -497.10M |
Spectrum Brands Holdings Technical Analysis
Neutral
55.42
Price Trends
58.42
Negative
64.71
Negative
76.31
Negative
Market Momentum
-1.54
Negative
50.94
Neutral
74.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPB, the sentiment is Neutral. The current price of 55.42 is above the 20-day moving average (MA) of 53.83, below the 50-day MA of 58.42, and below the 200-day MA of 76.31, indicating a neutral trend. The MACD of -1.54 indicates Negative momentum. The RSI at 50.94 is Neutral, neither overbought nor oversold. The STOCH value of 74.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SPB.
Spectrum Brands Holdings Risk Analysis
Spectrum Brands Holdings disclosed 57 risk factors in its most recent earnings report. Spectrum Brands Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Spectrum Brands Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $23.34B | 40.67 | 13.35% | 1.23% | 2.18% | -26.08% | |
69 Neutral | $713.22M | 5.75 | 7.45% | ― | -4.93% | -23.61% | |
65 Neutral | $1.15B | 14.29 | 5.53% | 2.56% | -2.11% | -28.79% | |
64 Neutral | $15.23B | 22.18 | 1176.27% | 4.06% | -2.64% | 189.29% | |
58 Neutral | $1.30B | 25.28 | 2.79% | 3.45% | 1.46% | -95.70% | |
56 Neutral | HK$23.68B | 3.88 | -1.57% | 6.91% | 0.06% | -64.88% | |
49 Neutral | $2.35B | ― | -8.46% | 5.18% | -6.09% | 17.71% |
* Consumer Cyclical Sector Average
Performance Comparison
SPB
Spectrum Brands Holdings
55.42
-27.58
-33.23%
CHD
Church & Dwight
98.03
-6.31
-6.05%
CLX
Clorox
123.54
-4.68
-3.65%
HELE
Helen Of Troy
31.07
-60.55
-66.09%
NWL
Newell Brands
5.63
-0.39
-6.48%
EPC
Edgewell Personal Care
24.82
-14.38
-36.68%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.