ACCO Brands Q2 2025 slides: sales decline 9.9%, tariffs impact North America

ACCO Brands Corporation (NYSE:ACCO) reported second quarter 2025 results showing continued sales pressure, with bright spots in gaming accessories and cost reduction efforts partially offsetting broader challenges. The office products and accessories maker saw its sales decline by 9.9% year-over-year, as tariff announcements disrupted North American performance.

Quarterly Performance Highlights

ACCO Brands reported Q2 2025 net sales of $394.8 million, down 9.9% compared to the same period last year, with comparable sales declining 10.5%. Adjusted earnings per share fell 24.3% to $0.28, while adjusted operating income decreased 27.1% to $47.1 million with a margin of 11.9%.

The company’s gross profit decreased 15.0% to $129.7 million, with gross margin contracting to 32.9%, down 190 basis points from the prior year. This margin pressure was attributed to lower volumes, reduced fixed-cost absorption, and tariff impacts.

As shown in the following financial results summary:

"Sales and EPS were in line with our company outlook, though we saw significant disruption in North America during April following tariff announcements," said ACCO Brands in its presentation. "We did see improving trends in May and June, though initial back-to-school sales were impacted by tariff-related actions."

Segment Performance

The company’s performance varied significantly by region. ACCO Brands Americas, which includes North America and Latin America, saw sales decrease by 15.0% to $248.5 million, with comparable sales down 13.9%. Adjusted operating income for this segment fell 31.6% to $43.2 million.

Meanwhile, ACCO Brands International performed better, with sales increasing slightly by 0.2% to $146.3 million, though comparable sales were down 3.7%. The international segment’s adjusted operating income increased by 6.0% to $12.4 million, resulting in a margin of 8.5%.

The segment breakdown reveals the extent of regional variations:

The company noted that weak economies in Latin America, particularly in Mexico, challenged sales in that region, while the international segment showed sequential improvement in its rate of sales decline compared to the first quarter.

Cost Reduction Initiatives

A key focus for ACCO Brands has been its multi-year cost reduction program, which is targeting at least $100 million in savings. The company reported achieving over $40 million in savings since the program’s inception, including over $8 million in Q2 2025 alone.

"We’re on track to deliver $40 million in pre-tariff savings in 2025," the company stated in its presentation. The program encompasses lower headcount, reduced discretionary spending, footprint rationalization, and leadership changes.

The cost reduction efforts have helped mitigate some of the sales decline impact:

These initiatives have contributed to a 6.1% reduction in SG&A expenses, which totaled $82.6 million in the quarter. The company attributed the lower SG&A to both cost reduction programs and incentive compensation reductions.

Tariff Impacts and Mitigation

Tariff announcements significantly disrupted ACCO’s North American business, particularly in April, though the company noted improving trends in May and June. The presentation outlined several strategies to manage tariff impacts, including a "China plus one" approach to sourcing, strategic supplier management, pre-tariff inventory building, and a flexible global supply chain.

The company is actively working with customers and suppliers through price increases and negotiations to mitigate tariff impacts in the U.S. market, while also expanding SKU rationalization efforts.

The tariff impact was evident in the company’s margin reconciliation, which showed an 80 basis point negative impact on gross margin from tariffs, alongside a 150 basis point decline from lower volumes.

Product Highlights

A bright spot in ACCO’s quarterly performance was the gaming accessories category, which grew modestly driven by the Nintendo Switch 2 console launch. PowerA, the company’s gaming accessories brand, was one of a select few third-party manufacturers to be officially licensed for the Nintendo Switch 2.

The company also highlighted new product introductions, including the Kensington Thunderbolt 5 Docking Station offering ultra-fast charging and pro-level display support for Apple (NASDAQ:AAPL) users, the Leitz Ergo Sit Stand Foldable Desk supporting hybrid work environments, and Rapid Work Lights for the European DIY market.

Outlook and Guidance

Looking ahead, ACCO Brands provided guidance for both the third quarter and full year 2025, noting "a high level of uncertainty for demand due to tariffs."

For Q3 2025, the company expects:

• Net sales of $387-400 million, representing a decline of 5.0-8.0%
• Comparable sales decline of 6.0-9.0%
• Adjusted EPS of $0.21-0.24

For the full year 2025, ACCO Brands forecasts:

• Net sales of $1,525-1,550 million, a decline of 7.0-8.5%
• Comparable sales decline of 8.0-9.5%
• Adjusted EPS of $0.83-0.90
• Adjusted free cash flow of approximately $100 million

Despite the sales challenges, ACCO Brands continues to focus on capital allocation, including debt reduction and shareholder returns. The company reduced net debt by $19 million year-over-year ($43 million excluding FX translation), repurchased $15 million in shares, and maintained its quarterly dividend of $0.075 per share.

As of June 30, 2025, ACCO Brands reported a consolidated leverage ratio of 4.3x, reflecting lower EBITDA in the Americas segment. The company’s cash balance increased $21 million year-over-year to $133 million.

ACCO Brands shares closed at $3.78 on July 31, 2025, down 0.79% for the day, according to available market data. The stock is trading near the lower end of its 52-week range of $3.32-$6.44.

Full presentation:

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