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Why Is Energizer (ENR) Down 2.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Energizer Holdings (ENR - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Energizer reported second-quarter fiscal 2024 results, wherein its bottom line surpassed the Zacks Consensus Estimate. Its adjusted earnings of 72 cents per share beat the Zacks Consensus Estimate of 67 cents. Also, the bottom line increased 13% from the year-ago quarter’s reported figure.
This company reported net sales of $663.3 million, which were almost in line with the Zacks Consensus Estimate but fell 3% from the year-ago quarter’s reading. Organic sales dipped 2.7%. We expected organic sales to drop 2.4%. Pricing fell 3.3% due to planned strategic pricing and promotional investments, partly offsetting volume growth of 0.6% backed by Auto Care distribution gains.
Segments in Detail
Revenues of Energizer's Batteries & Lights segment dropped 4.9% year over year to $481 million, in line with our anticipated rate of decline. We note that segmental profit slipped 0.9% to $113.5 million.
Revenues in the Auto Care segment rose 2.3% to $182.3 million from the year-ago period, surpassing our projected growth rate of 2%. Segmental profit increased 37.4% year over year to $40.4 million.
Margins
Energizer’s adjusted gross margin expanded 260 basis points to 40.5%, driven primarily by the Project Momentum savings of $11 million and lower input costs with better commodities pricing and reduced ocean freight. However, this positive effect was partly offset by strategic pricing and promotional investments.
Excluding restructuring costs, adjusted SG&A expenses fell 3.3% year over year to $113.9 million. Adjusted EBITDA was $142.5 million, up 7.2% year over year.
Other Financial Details
As of Mar 31, 2024, Energizer’s cash and cash equivalents were $158.1 million, with long-term debt of $3.2 billion and shareholders' equity of $191.3 million. In the fiscal second quarter, ENR paid down $60 million of debt. At the end of the quarter, the company’s net debt to adjusted EBITDA was 5.2 times. Management paid dividends of $44 million for the first half of the year. The operating cash flow for the fiscal first half was $214.9 million and the free cash flow was $162.9 million.
Outlook
For fiscal 2024, Energizer expects organic revenues between flat and a low-single-digit decline. The company anticipates its adjusted EBITDA between $600 million and $620 million, with adjusted earnings per share between $3.10 and $3.30. It predicts adjusted gross margin expansion of more than 100 basis points.
For the fiscal third quarter, organic revenues are expected to rise 1%, and adjusted earnings per share are anticipated to be in the range of 62-68 cents, up 20% at the midpoint. It anticipates the gross margin to improve about 150 bps year over year.
Project Momentum is on track with total savings likely to be in the band of $160-$180 million over the life of its program. Cash costs to accomplish savings are anticipated to be in the range of $140-$150 million. For fiscal 2024, expected savings from Project Momentum are pegged at $55-$65 million, with one-time cash costs in the range of $60-$70 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Energizer has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Energizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Energizer belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, Kimberly-Clark (KMB - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Kimberly-Clark reported revenues of $5.15 billion in the last reported quarter, representing a year-over-year change of -0.9%. EPS of $2.01 for the same period compares with $1.67 a year ago.
Kimberly-Clark is expected to post earnings of $1.67 per share for the current quarter, representing a year-over-year change of +1.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Kimberly-Clark. Also, the stock has a VGM Score of B.
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Why Is Energizer (ENR) Down 2.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Energizer Holdings (ENR - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Energizer Q2 Earnings Beat Estimates, Sales Dip Y/Y
Energizer reported second-quarter fiscal 2024 results, wherein its bottom line surpassed the Zacks Consensus Estimate. Its adjusted earnings of 72 cents per share beat the Zacks Consensus Estimate of 67 cents. Also, the bottom line increased 13% from the year-ago quarter’s reported figure.
This company reported net sales of $663.3 million, which were almost in line with the Zacks Consensus Estimate but fell 3% from the year-ago quarter’s reading. Organic sales dipped 2.7%. We expected organic sales to drop 2.4%. Pricing fell 3.3% due to planned strategic pricing and promotional investments, partly offsetting volume growth of 0.6% backed by Auto Care distribution gains.
Segments in Detail
Revenues of Energizer's Batteries & Lights segment dropped 4.9% year over year to $481 million, in line with our anticipated rate of decline. We note that segmental profit slipped 0.9% to $113.5 million.
Revenues in the Auto Care segment rose 2.3% to $182.3 million from the year-ago period, surpassing our projected growth rate of 2%. Segmental profit increased 37.4% year over year to $40.4 million.
Margins
Energizer’s adjusted gross margin expanded 260 basis points to 40.5%, driven primarily by the Project Momentum savings of $11 million and lower input costs with better commodities pricing and reduced ocean freight. However, this positive effect was partly offset by strategic pricing and promotional investments.
Excluding restructuring costs, adjusted SG&A expenses fell 3.3% year over year to $113.9 million. Adjusted EBITDA was $142.5 million, up 7.2% year over year.
Other Financial Details
As of Mar 31, 2024, Energizer’s cash and cash equivalents were $158.1 million, with long-term debt of $3.2 billion and shareholders' equity of $191.3 million. In the fiscal second quarter, ENR paid down $60 million of debt. At the end of the quarter, the company’s net debt to adjusted EBITDA was 5.2 times. Management paid dividends of $44 million for the first half of the year. The operating cash flow for the fiscal first half was $214.9 million and the free cash flow was $162.9 million.
Outlook
For fiscal 2024, Energizer expects organic revenues between flat and a low-single-digit decline. The company anticipates its adjusted EBITDA between $600 million and $620 million, with adjusted earnings per share between $3.10 and $3.30. It predicts adjusted gross margin expansion of more than 100 basis points.
For the fiscal third quarter, organic revenues are expected to rise 1%, and adjusted earnings per share are anticipated to be in the range of 62-68 cents, up 20% at the midpoint. It anticipates the gross margin to improve about 150 bps year over year.
Project Momentum is on track with total savings likely to be in the band of $160-$180 million over the life of its program. Cash costs to accomplish savings are anticipated to be in the range of $140-$150 million. For fiscal 2024, expected savings from Project Momentum are pegged at $55-$65 million, with one-time cash costs in the range of $60-$70 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Energizer has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Energizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Energizer belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, Kimberly-Clark (KMB - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Kimberly-Clark reported revenues of $5.15 billion in the last reported quarter, representing a year-over-year change of -0.9%. EPS of $2.01 for the same period compares with $1.67 a year ago.
Kimberly-Clark is expected to post earnings of $1.67 per share for the current quarter, representing a year-over-year change of +1.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Kimberly-Clark. Also, the stock has a VGM Score of B.