Spectrum Brands Reports 6% Decline in Q2 Revenue, Net Income Falls 98%

Spectrum Brands Holdings, Inc. reported a decline in financial performance for the second quarter of fiscal 2025, with net sales of $675.7 million, down 6% from $718.5 million in the same period last year. For the six-month period ending March 30, 2025, total revenue was $1.3759 billion, a decrease of 2.5% compared to $1.4107 billion in the prior year. The company's net income fell sharply to $1.2 million, or $0.03 per share, from $60.9 million, or $2.03 per share, in the previous year, reflecting a 98% decline in profitability.

The decline in revenue was attributed to lower sales volumes across all segments, particularly in the Global Pet Care (GPC) and Home & Personal Care (HPC) divisions, which saw decreases of 7.1% and 5.1%, respectively. The Home & Garden (H&G) segment also experienced a 5.2% drop in sales. The company noted that the decrease in sales was influenced by a cautious consumer environment, particularly in the premium product categories, and challenges in the e-commerce channel. Additionally, the company faced increased costs due to inflation and the expiration of tariff exemptions on certain products.

In terms of operational changes, Spectrum Brands has been actively restructuring its operations, which included a focus on supply chain diversification and cost management in response to new U.S. tariffs on imports, particularly from China. The company has temporarily paused imports from China and is exploring alternative sourcing options to mitigate the impact of these tariffs. The restructuring efforts have resulted in exit and disposal costs of $4 million during the six-month period, with additional costs expected in the future.

Looking ahead, Spectrum Brands anticipates continued challenges due to the geopolitical environment and ongoing tariff impacts. The company is focused on enhancing operational efficiencies and managing costs to protect margins. Despite the current difficulties, Spectrum Brands maintains a positive outlook on its ability to generate cash flow and access credit markets, which it believes will support its growth strategies and shareholder returns in the coming months. As of March 30, 2025, the company reported cash and cash equivalents of $96 million and borrowing availability of $408.6 million under its credit facility.