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How Did Spectrum Brands Perform in 1Q17?

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Price movement

Spectrum Brands Holdings (SPB) has a market cap of $8.0 billion. It rose 8.0% and closed at $132.77 per share on January 26, 2017. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 8.4%, 9.5%, and 8.5%, respectively, on the same day. Spectrum Brands is trading 8.9% above its 20-day moving average, 8.8% above its 50-day moving average, and 7.8% above its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Mid-Cap Growth Index Fund (JKH) invests 0.20% of its holdings in Spectrum Brands. JKH’s YTD price movement was 4.4% on January 26.

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

  • Procter & Gamble (PG) – $224.5 billion
  • Masco (MAS) – $11.0 billion
  • Edgewell Personal Care (EPC) – $4.6 billion

Performance in fiscal 1Q17

Spectrum Brands reported fiscal 1Q17 net sales of $1.21 billion—a fall of 0.6% compared to net sales of $1.22 billion in fiscal 1Q16 due to the negative impact of foreign exchange. Sales of the global batteries & appliances, global auto care, and global pet supplies segments fell 0.3%, 5.7%, and 4.5%, respectively. Sales of the hardware & home improvement and home & garden segments rose 2.2% and 4.4% in fiscal 1Q17—compared to fiscal 1Q16. The company’s gross profit margin and operating margin expanded by 90 basis points and 80 basis points, respectively, in fiscal 1Q17—compared to the same period last year. The gross margin rose due to favorable mix and higher productivity, which were partially offset by unfavorable foreign exchange.

Its net income and EPS (earnings per share) fell to $65.2 million and $1.10, respectively, in fiscal 1Q17—compared to $73.6 million and $1.24, respectively, in fiscal 1Q16. It reported adjusted EPS of $1.21 in fiscal 1Q17—a rise of 19.8% compared to fiscal 1Q16.

Spectrum Brands’ cash and cash equivalents fell 47.9%, while its inventories rose 5.3% between fiscal 1Q17 and fiscal 4Q16.

Projections

Spectrum Brands made the following projections for fiscal 2017:

  • free cash flow of $575 million–$590 million
  • capital expenditures of $110 million–$120 million

For an ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.

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