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Investing.com -- Spectrum Brands Holdings, Inc. (NYSE:SPB) on Thursday reported third-quarter fiscal 2025 results that fell short of analyst expectations, as the company navigated tariff-related disruptions and weakening consumer demand.
The consumer products company posted adjusted earnings of $1.24 per share, missing the analyst estimate of $1.35, while revenue declined 10.2% year-over-year to $699.6 million, below the consensus estimate of $745.55 million.
The revenue shortfall was primarily attributed to stop shipments during pricing negotiations with retailers, tariff-related supply constraints, and softening demand in Global Pet Care and Home and Personal Care segments.
Unfavorable weather conditions also delayed replenishment orders in the Home and Garden division. Organic net sales decreased 11.1% when excluding the $6.8 million favorable impact from foreign exchange rates.
Despite the challenging quarter, Spectrum Brands’ shares rose 1.7% following the announcement, as investors appeared to focus on the company’s progress in resolving tariff-related issues and its reaffirmed free cash flow guidance.
"Our results this quarter reflect Spectrum Brands making the right but difficult long-term decisions for the Company," said David Maura, Chairman and CEO.
"When the tariff rate on Chinese imports to the US went to 145% early in the third quarter, we paused virtually all purchases from China and accelerated our plans to further diversify our supply base."
The company’s net income from continuing operations increased 7.3% to $20.5 million, while adjusted EBITDA fell 27.9% to $76.6 million compared to the same period last year. Gross profit margin contracted 110 basis points to 37.8%.
Spectrum Brands reaffirmed its expectation to generate approximately $160 million of free cash flow in fiscal 2025 but continues to suspend its earnings framework due to uncertainties related to global trade conditions and tariffs.
During the quarter, the company repurchased 0.9 million shares for $54.4 million, bringing its total share repurchases to 17.1 million shares for $1.3 billion since the close of its HHI divestiture, resulting in 24.2 million shares outstanding as of the report date.
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