Energizer beats earnings expectations in Q3
Energizer Holdings, Inc. reported stronger-than-expected results for its fiscal third quarter, driven by improved margins, cost efficiencies, and production-related tax credits. The company also raised its full-year earnings guidance, sending shares sharply higher in early trading.
Net sales for the quarter rose 3.4% year-over-year to $725.3 million, supported in part by the recent acquisition of Belgium-based Advanced Power Solutions NV, which contributed $20.8 million in revenue. Organic sales growth was nearly flat at 0.1%, as volume gains were offset by unfavourable pricing and foreign exchange impacts.
Energizer’s gross margin surged to 55.1% from 39.5% a year ago, reflecting significant benefits from Advanced Manufacturing Production Credits under the Inflation Reduction Act. Adjusted gross margin improved 330 basis points to 44.8%, aided by $112.4 million in credits—more than $78 million of which were retroactive.
Net income more than doubled to $151.4 million, or $2.13 per share, compared with $67.8 million, or $0.94 per share, in the same period last year. Adjusted earnings per share climbed 43% to $1.13, beating analyst expectations.
“We are seeing the benefits of our strategic focus, including disciplined cost control, expanded U.S. manufacturing, and targeted investments,” said CEO Mark LaVigne. “These results reflect our progress toward creating long-term value.”
Adjusted EBITDA rose to $171.4 million, up from $157.4 million a year ago. Free cash flow for the nine-month period totalled $16.5 million, while the company returned over $83 million to shareholders through dividends and share repurchases.
Looking ahead, Energizer raised its full-year outlook, now expecting adjusted EPS between $3.55 and $3.65, up from a prior range of $3.30 to $3.50. Net sales growth is forecast between 1% and 3%, including APS NV’s contribution, with organic sales expected to remain flat to up 2%.
Shares of Energizer surged more than 10% following the earnings release, reflecting investor confidence in the company’s improving fundamentals.
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