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Spectrum Brands Reaffirms Its Future Projections

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Price movement

Spectrum Brands Holdings (SPB) has a market cap of $8.1 billion. It rose 1.5% to close at $135.52 per share on September 27, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 4.3%, 2.7%, and 34.1%, respectively, on the same day.

SPB is trading 3.4% above its 20-day moving average, 5.3% above its 50-day moving average, and 20.9% above its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Mid-Cap Growth (JKH) invests 0.22% of its holdings in Spectrum Brands. The ETF tracks a market-cap-weighted index of mid-cap companies selected by Morningstar based on their growth characteristics. The YTD price movement of JKH was 5.0% on September 27, 2016.

The market cap of Spectrum Brands’ competitors are as follows:

  • Procter & Gamble (PG): $235.9 billion
  • Edgewell Personal Care (EPC): $4.5 billion
  • Masco (MAS): $11.5 billion

Latest news on Spectrum Brands

In a press release on September 27, 2016, Spectrum Brands reported, “Spectrum Brands Holdings, Inc. (NYSE: SPB) announced today in excess of $410 million of cumulative term debt reduction during its fiscal year and anticipates ending fiscal 2016 on September 30 with total leverage below 4 times.”

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Performance of Spectrum Brands in fiscal 3Q16

Spectrum Brands (SPB) reported fiscal 3Q16 net sales of $1.4 million, a rise of 9.1% from $1.3 million in fiscal 3Q15. Sales from the Global Batteries & Appliances and Global Pet Supplies segments fell 1.1% and 0.6%, respectively.

Sales from the Hardware & Home Improvement, Home & Garden, and Global Auto Care segments rose 4.8%, 4.8%, and 148.1%, respectively, between fiscal 3Q15 and fiscal 3Q16. The company’s gross profit margin and operating income rose 6.2% and 52.3%, respectively.

Net income, EPS, and cash

Spectrum Brands’ net income and EPS (earnings per share) rose to $101.9 million and $1.71, respectively, in fiscal 3Q16 compared to $44.9 million and $0.79, respectively, in fiscal 3Q15.

The company reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $279.2 million in fiscal 3Q16, a rise of 18.2% over fiscal 3Q15. SPB’s cash and cash equivalents fell 52.8%, and its inventory rose 7.9% between fiscal 4Q15 and fiscal 3Q16.

Projections

Spectrum Brands made the following projections for fiscal 2016:

  • a net sales increase in the high-single-digit range, including the positive impacts of the acquisitions of the European pet food business on December 31, 2014, Salix Animal Health on January 16, 2015, and Armored Auto Group on May 21, 2015, and the negative impact of foreign exchange of 2.8%–3.0% based on current spot rates
  • free cash flows of $505 million–$515 million
  • capital expenditure of $100 million–$110 million

In the next part, we’ll take a look at GoPro (GPRO).

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