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Energizer (ENR) Gains From Project Momentum & Debt Reduction
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Energizer Holdings Inc.’s (ENR - Free Report) comprehensive strategic initiatives, including Project Momentum, underscore its commitment to sustainable growth and profitability. By focusing on consumer engagement, market expansion, innovation and effective debt reduction, the company is well-positioned to navigate market challenges. With strong segmental performance and disciplined financial management, Energizer is poised for long-term success, delivering sustained value to shareholders.
Delving Deeper
Project Momentum is central to Energizer’s strategy, driving operational efficiencies and cost savings. More importantly, the adjusted gross margin increased 270 basis points to 41.5% in the third quarter of fiscal 2024 due to substantial savings from Project Momentum, which contributed approximately $14 million to savings in the quarter.
Project Momentum has been pivotal, delivering nearly $120 million in savings to date and driving the adjusted gross margin to 40.3% over the trailing 12 months. Looking ahead, Energizer expects the program to continue driving benefits, targeting total savings between $180 million and $200 million over three years. Cash costs to accomplish savings are anticipated to be $150-$170 million. For fiscal 2024, expected savings from Project Momentum are pegged at $80-$90 million, with one-time cash costs of $70-$80 million.
Image Source: Zacks Investment Research
Energizer has reduced its leverage by over a full turn, paying down more than $430 million in debt over eight quarters, including $150 million in the fiscal third quarter. This strategy has improved the balance sheet and reduced financial risks, aiming for a net leverage ratio under 5 times by the fiscal year’s end, indicating prudent financial management and long-term stability.
Energizer plans to expand its market reach and drive growth through innovation, leveraging its global platform to tap into new revenue streams in developing markets. The company is committed to leading innovations in portable power, lighting and auto care products to stay ahead of competitors and meet consumer demands.
Strong Segmental Performances
Energizer’s segmental performances have been strong, reflecting the effectiveness of its operational strategy. Revenues in the Auto Care segment rose 2.2% to $192.3 million from the year-ago period. Moreover, the company achieved organic growth for four consecutive quarters, signaling a sustainable growth trajectory.
The Battery segment has also performed well, benefiting from improved category trends and increased distribution. The segmental profit increased 6.2% year over year to $129.4 million in the fiscal third quarter. This consistent segmental performance demonstrates Energizer's ability to effectively manage and grow its diverse portfolio, which is crucial for long-term success.
Zacks Rank & Estimate Revision
In the past three months, shares of this Zacks Rank #2 (Buy) company have lost 4.8% against the industry’s 2.9% growth.
However, the Zacks Consensus Estimate for earnings per share has seen upward revisions, reflecting the positive sentiment around Energizer. Over the past 30 days, analysts have increased their estimates for the current and next years by 3 cents to $3.25 and by 10 cents to $3.51 per share, respectively. These estimates indicate year-over-year growth rates of 5.2% and 7.8%, respectively.
To wrap up, Energizer's strong financial health and strategic initiatives, including significant debt reduction and Project Momentum, position the company well for sustained growth. Its proactive approach to market expansion and innovation solidifies its appeal to shareholders.
Other Key Picks
Here, we have highlighted three other top-ranked stocks, namely Vital Farms Inc. (VITL - Free Report) , Edgewell Personal Care Co. (EPC - Free Report) and International Flavors & Fragrances (IFF - Free Report) .
VITL has a trailing four-quarter earnings surprise of 82.5%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial year’s earnings and sales indicates growth of 88.1% and 26.3%, respectively, from the year-ago reported figures.
Edgewell manufactures and markets personal care products. It presently carries a Zacks Rank #2. EPC has a trailing four-quarter average earnings surprise of 88.1%.
The Zacks Consensus Estimate for Edgewell’s current fiscal-year earnings and sales indicates growth of 17.2% and 1%, respectively, from the year-ago reported figures.
International Flavors & Fragrances is a global leader in high-value ingredients and solutions for food and beverage, home and personal care, and health & wellness markets. It has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for IFF’s current financial-year earnings indicates growth of 27% from the year-ago reported figure. IFF has a trailing four-quarter average earnings surprise of 15.6%.
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Energizer (ENR) Gains From Project Momentum & Debt Reduction
Energizer Holdings Inc.’s (ENR - Free Report) comprehensive strategic initiatives, including Project Momentum, underscore its commitment to sustainable growth and profitability. By focusing on consumer engagement, market expansion, innovation and effective debt reduction, the company is well-positioned to navigate market challenges. With strong segmental performance and disciplined financial management, Energizer is poised for long-term success, delivering sustained value to shareholders.
Delving Deeper
Project Momentum is central to Energizer’s strategy, driving operational efficiencies and cost savings. More importantly, the adjusted gross margin increased 270 basis points to 41.5% in the third quarter of fiscal 2024 due to substantial savings from Project Momentum, which contributed approximately $14 million to savings in the quarter.
Project Momentum has been pivotal, delivering nearly $120 million in savings to date and driving the adjusted gross margin to 40.3% over the trailing 12 months. Looking ahead, Energizer expects the program to continue driving benefits, targeting total savings between $180 million and $200 million over three years. Cash costs to accomplish savings are anticipated to be $150-$170 million. For fiscal 2024, expected savings from Project Momentum are pegged at $80-$90 million, with one-time cash costs of $70-$80 million.
Image Source: Zacks Investment Research
Energizer has reduced its leverage by over a full turn, paying down more than $430 million in debt over eight quarters, including $150 million in the fiscal third quarter. This strategy has improved the balance sheet and reduced financial risks, aiming for a net leverage ratio under 5 times by the fiscal year’s end, indicating prudent financial management and long-term stability.
Energizer plans to expand its market reach and drive growth through innovation, leveraging its global platform to tap into new revenue streams in developing markets. The company is committed to leading innovations in portable power, lighting and auto care products to stay ahead of competitors and meet consumer demands.
Strong Segmental Performances
Energizer’s segmental performances have been strong, reflecting the effectiveness of its operational strategy. Revenues in the Auto Care segment rose 2.2% to $192.3 million from the year-ago period. Moreover, the company achieved organic growth for four consecutive quarters, signaling a sustainable growth trajectory.
The Battery segment has also performed well, benefiting from improved category trends and increased distribution. The segmental profit increased 6.2% year over year to $129.4 million in the fiscal third quarter. This consistent segmental performance demonstrates Energizer's ability to effectively manage and grow its diverse portfolio, which is crucial for long-term success.
Zacks Rank & Estimate Revision
In the past three months, shares of this Zacks Rank #2 (Buy) company have lost 4.8% against the industry’s 2.9% growth.
However, the Zacks Consensus Estimate for earnings per share has seen upward revisions, reflecting the positive sentiment around Energizer. Over the past 30 days, analysts have increased their estimates for the current and next years by 3 cents to $3.25 and by 10 cents to $3.51 per share, respectively. These estimates indicate year-over-year growth rates of 5.2% and 7.8%, respectively.
To wrap up, Energizer's strong financial health and strategic initiatives, including significant debt reduction and Project Momentum, position the company well for sustained growth. Its proactive approach to market expansion and innovation solidifies its appeal to shareholders.
Other Key Picks
Here, we have highlighted three other top-ranked stocks, namely Vital Farms Inc. (VITL - Free Report) , Edgewell Personal Care Co. (EPC - Free Report) and International Flavors & Fragrances (IFF - Free Report) .
Vital Farms, which offers a range of produced pasture-raised foods, currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
VITL has a trailing four-quarter earnings surprise of 82.5%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial year’s earnings and sales indicates growth of 88.1% and 26.3%, respectively, from the year-ago reported figures.
Edgewell manufactures and markets personal care products. It presently carries a Zacks Rank #2. EPC has a trailing four-quarter average earnings surprise of 88.1%.
The Zacks Consensus Estimate for Edgewell’s current fiscal-year earnings and sales indicates growth of 17.2% and 1%, respectively, from the year-ago reported figures.
International Flavors & Fragrances is a global leader in high-value ingredients and solutions for food and beverage, home and personal care, and health & wellness markets. It has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for IFF’s current financial-year earnings indicates growth of 27% from the year-ago reported figure. IFF has a trailing four-quarter average earnings surprise of 15.6%.