Spectrum Reports Fiscal Q3 Gains Despite Small Appliance Challenges

Spectrum Brands Holdings, Inc., today reported record fiscal 2014 third quarter results for the period ended June 29, 2014, and reconfirmed its outlook for what the company described as, “a fifth consecutive year of record performance.”

For its fiscal third quarter the company reported net sales of $1.13 billion an increase of 3.6% compared to net sales of $1.09 billion a year ago. The company’s reported net income of $78.0 million and diluted income per share of $1.47 in the third quarter of fiscal 2014 more than doubled compared to net income of $36.1 million and diluted income per share of $0.69 in the prior year quarter.

“We have delivered solid, consistent sales growth every quarter this year of about 3.5% in what we believe remains a challenging global environment with very sluggish consumer POS and retail store traffic, especially in North America, along with tight retailer inventory levels and reorder rates,” said Dave Lumley, CEO of Spectrum Brands Holdings. “Our adjusted EBITDA grew at about twice the rate of sales in the third quarter, and we are pleased with the strong expansion of our gross margin and adjusted EBITDA margin. We are on track to deliver a seventh consecutive year of adjusted EBITDA margin growth.

Within its housewares-related segments the company reported net sales for the global personal care product category of $117.6 million in the third quarter of fiscal 2014, a 1.8% increase versus $115.5 million last year. North America, Europe and Latin America all posted slight improvements, according to the company.

The small appliances product category reported fiscal third quarter net sales of $163.9 million versus $168.7 million in the year-ago quarter. Higher European revenues from new products and increased distribution at existing retailers were offset by declines in Latin America due to the exit from lower promotional activities and in North America, predominantly from the exit of low-margin promotions at several retailers.

“The resilience and reliability of our businesses in today’s difficult global environment is a testament to our operating model, go-to-market strategies, brand strength and diversity, and strong retailer relationships,” Lumley said. “Our Spectrum Value Model works effectively and resonates well with retailers and consumers. ‘Same or better performance/less price,’ value-branded Spectrum Brands products are winning in the marketplace with today’s smart shoppers who are focusing more and more on value. Importantly, our brands are largely non-discretionary, non-premium priced, home-related, replacement packaged goods used daily by consumers.