ACCO Brands Reports 11.6% Decline in Q1 2025 Net Sales, Operating Loss of $6.7 Million

ACCO Brands Corporation reported a decline in financial performance for the first quarter of 2025, with net sales totaling $317.4 million, down 11.6% from $358.9 million in the same period last year. The decrease was attributed to lower global demand for office-related products and gaming accessories, which was partially offset by growth in computer accessories. The company's gross profit also fell to $99.6 million, a decrease of 9.8%, while the gross profit margin improved slightly to 31.4% from 30.8% due to a favorable sales mix and cost savings from ongoing global footprint rationalization efforts.

The company reported an operating loss of $6.7 million for the quarter, compared to an operating income of $5.9 million in the prior year. This decline was primarily driven by lower sales volume and increased restructuring expenses, which amounted to $2.3 million. Interest expenses decreased by 21.9% to $8.9 million, reflecting lower variable interest rates on reduced debt balances. The net loss for the quarter was $13.2 million, or $(0.14) per diluted share, compared to a net loss of $6.3 million, or $(0.07) per diluted share, in the same quarter of 2024.

In terms of strategic developments, ACCO Brands completed the acquisition of Buro Seating Limited Partnership on February 28, 2025, for approximately $10.1 million. This acquisition is expected to enhance the company's presence in the ergonomic seating market in Australia and New Zealand. The company continues to focus on restructuring initiatives aimed at achieving annualized pre-tax cost savings of approximately $100 million by the end of 2026, which includes optimizing its operating structure and reducing costs through headcount reductions and supply chain improvements.

Operationally, ACCO Brands experienced a decrease in customer demand, leading to a decline in sales across its two segments: Americas and International. The Americas segment reported net sales of $173.9 million, down 11.8%, while the International segment saw a decrease of 11.3% to $143.5 million. The company’s cash flow from operating activities was $5.5 million, significantly lower than the $28.2 million reported in the previous year, primarily due to reductions in working capital. As of March 31, 2025, the company had $134.6 million in cash and cash equivalents and a consolidated leverage ratio of approximately 3.65 to 1.00.

Looking ahead, ACCO Brands anticipates that ongoing macroeconomic challenges and geopolitical instability will continue to impact consumer and office spending. The company remains focused on executing its restructuring plans and optimizing its product offerings to adapt to changing market conditions. Management expects that cash flow from operations, along with available liquidity from its revolving credit facility, will be sufficient to support its working capital needs and strategic initiatives in the foreseeable future.