Spectrum Brands Holdings (SPB) AI Stock Analysis

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Spectrum Brands Holdings

(NYSE:SPB)

54Neutral

Spectrum Brands Holdings faces significant challenges such as declining sales, profitability issues, and tariff impacts. While the company shows resilience with a strong equity base and strategic plans, these are offset by valuation concerns and mixed technical indicators. The proactive measures to improve supply chain and maintain financial stability are positives, but short-term uncertainties remain.

Positive Factors

Financial Performance

The company reaffirmed its guidance, indicating confidence in future performance.

Stock Buyback

The company will aggressively buy back stock at current levels, providing a floor to the stock.

Negative Factors

Cash Return Challenges

SPB's 'cash return' story is stalling a bit as it's unable to buy back stock while shopping HPC amid a 'when and if' HPC finds a buyer debate.

Organic Sales Decline

Organic sales have declined 6 of the past 8 quarters, and prospects for durable growth in the Pet sector are a key debate.

Tariffs Impact

The HPC business will be most impacted by recently announced tariffs.

Spectrum Brands Holdings (SPB) vs. S&P 500 (SPY)

Market Cap

$1.59B

Dividend Yield2.72%

Average Volume (3M)575.16K

Price to Earnings (P/E)31.3

Beta (1Y)0.76

Revenue Growth1.46%

EPS Growth-95.70%

CountryUS

Employees3,100

SectorConsumer Cyclical

Sector Strength75

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)0.68

Shares Outstanding25,003,906

10 Day Avg. Volume672,454

30 Day Avg. Volume575,156

Financial Highlights & Ratios

PEG Ratio-61.92

Price to Book (P/B)0.89

Price to Sales (P/S)0.00

P/FCF Ratio31.98

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$89.50

Price Target Upside40.61% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Spectrum Brands Holdings Business Overview & Revenue Model

Company DescriptionSpectrum Brands Holdings, Inc. operates as a branded consumer products company worldwide. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington and LumaBella brands. The Global Pet Care segment provides rawhide chewing, dog and cat clean-up and food, training, health and grooming, small animal food and care, and rawhide-free products under the 8IN1 (8-in-1), Dingo, Nature's Miracle, Wild Harvest, Littermaid, Jungle, Excel, FURminator, IAMS, Eukanuba, Healthy-Hide, DreamBone, SmartBones, ProSense, Perfect Coat, eCOTRITION, Birdola, Good Boy, Meowee!, Wildbird, and Wafcol brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Whisper, Instant Ocean, GloFish, OmegaOne, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was incorporated in 2009 and is headquartered in Middleton, Wisconsin.

How the Company Makes MoneySpectrum Brands Holdings generates revenue through the sale of its diverse range of consumer products across multiple segments. The company's key revenue streams include the Home and Personal Care segment, which sells small kitchen appliances, grooming products, and personal care items; the Global Pet Care segment, which offers a variety of pet products like food, grooming, and health supplies; the Home & Garden segment, which provides products for lawn and garden care, as well as insect and weed control; and the Hardware & Home Improvement segment, which includes locks, builders' hardware, and plumbing products. The company leverages strong brand recognition and extensive distribution networks to sell its products through various retail channels, including e-commerce platforms, large retailers, and specialty stores. Significant partnerships with retailers, along with strategic acquisitions and expansions into new markets, also contribute to its earnings.

Spectrum Brands Holdings Financial Statement Overview

Summary

Spectrum Brands Holdings demonstrates financial stability with strong profitability metrics and a healthy balance sheet. The income statement reflects consistent profitability, while the balance sheet shows low leverage, which reduces financial risks. However, the declining revenue trend and reduced free cash flow growth pose potential challenges. Continued focus on boosting revenue and cash flow will enhance financial resilience.

Income Statement

Positive

Spectrum Brands Holdings shows a stable income statement with a gross profit margin of approximately 37.7% and a net profit margin of 4.0% for TTM (Trailing-Twelve-Months). While the gross profit margin has been consistent, the net profit margin shows improvement compared to the previous period. Revenue growth has been modest, indicating stability in sales. The EBIT and EBITDA margins are positive, reflecting operational efficiency. However, the overall revenue trend has been slightly declining over the years, suggesting potential challenges in market growth.

Balance Sheet

Positive

The balance sheet of Spectrum Brands Holdings is robust with a debt-to-equity ratio of 0.04, indicating low leverage and a strong equity position. The return on equity stands at 5.9%, which shows a reasonable return for shareholders. The equity ratio is 56.1%, reflecting a solid capital structure. However, there has been a decline in total assets over the period, which could be a concern if it affects future growth opportunities.

Cash Flow

Positive

The cash flow statement indicates positive free cash flow, with a free cash flow growth rate of -65.3% from the previous year, which is a concern. The operating cash flow to net income ratio is 0.69, suggesting that cash flow generation from operations is strong relative to net income. Despite these strengths, the reduction in free cash flow growth could impact future investment capabilities.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
2.97B	2.96B	2.92B	3.13B	3.00B	3.96B
	Gross Profit
1.12B	1.11B	924.30M	990.40M	1.03B	1.37B
	EBIT
190.30M	170.60M	-205.60M	-5.30M	97.10M	243.40M
	EBITDA
316.30M	323.90M	-72.00M	166.90M	253.40M	244.10M
	Net Income Common Stockholders
119.30M	124.80M	1.80B	-77.00M	15.30M	97.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
179.90M	368.90M	1.86B	243.70M	187.90M	531.60M
	Total Assets
3.61B	3.84B	5.26B	5.78B	5.34B	5.11B
	Total Debt
637.80M	647.80M	1.65B	3.21B	2.55B	2.57B
	Net Debt
457.90M	278.90M	897.20M	2.97B	2.36B	2.03B
	Total Liabilities
1.59B	1.70B	2.74B	4.51B	3.86B	3.69B
	Stockholders Equity
2.03B	2.14B	2.52B	1.26B	1.47B	1.41B
Cash Flow		Free Cash Flow
53.00M	118.60M	-468.70M	-117.80M	244.80M	229.30M
	Operating Cash Flow
94.50M	162.60M	-409.70M	-53.80M	288.40M	290.30M
	Investing Cash Flow
881.70M	1.02B	3.18B	-359.80M	-423.50M	108.30M
	Financing Cash Flow
-1.24B	-1.58B	-2.26B	487.60M	-209.90M	-497.10M

Spectrum Brands Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price63.65

Price Trends

50DMA

65.80

Negative

100DMA

73.44

Negative

200DMA

81.69

Negative

Market Momentum

MACD

-0.09

Negative

RSI

47.85

Neutral

STOCH

70.61

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPB, the sentiment is Negative. The current price of 63.65 is above the 20-day moving average (MA) of 63.56, below the 50-day MA of 65.80, and below the 200-day MA of 81.69, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 47.85 is Neutral, neither overbought nor oversold. The STOCH value of 70.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPB.

Spectrum Brands Holdings Risk Analysis

Spectrum Brands Holdings disclosed 57 risk factors in its most recent earnings report. Spectrum Brands Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Spectrum Brands Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EPC	69 Neutral	$1.34B	16.69	5.53%	2.10%	-2.11%	-28.79%
CHD	63 Neutral	$23.60B	41.11	13.35%	1.20%	2.18%	-26.08%
HELE	63 Neutral	$703.88M	5.68	7.45%	―	-4.93%	-23.61%
CLX	62 Neutral	$16.62B	24.47	1176.27%	3.58%	-2.64%	189.29%
Sector *	61 Neutral	$6.97B	11.38	2.88%	3.90%	2.64%	-22.07%
SPB	54 Neutral	$1.59B	31.31	2.79%	2.72%	1.46%	-95.70%
NWL	49 Neutral	$2.46B	―	-8.46%	4.75%	-6.09%	17.71%

* Consumer Cyclical Sector Average

Performance Comparison

SPB

Spectrum Brands Holdings

63.65

-28.21

-30.71%

CHD

Church & Dwight

95.97

-9.33

-8.86%

CLX

Clorox

134.84

4.33

3.32%

HELE

Helen Of Troy

30.68

-75.74

-71.17%

NWL

Newell Brands

5.69

-2.23

-28.16%

EPC

Edgewell Personal Care

28.48

-10.50

-26.94%

Spectrum Brands Holdings Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q2-2025)

% Change Since: 2.86%|

Next Earnings Date:Aug 08, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strategic adjustments and a strong financial position as key positives. However, significant challenges were presented by increased tariffs and deteriorating consumer sentiment, impacting sales and profitability. The company is taking proactive steps to mitigate these challenges but faces uncertainties in the short term.

Q2-2025 Updates

Positive Updates

Strong Financial Position

Spectrum Brands Holdings reported a net leverage of just 1.7 turns, with expectations for leverage to decrease by year-end due to significant free cash flow generation in the second half of the fiscal year.

Strategic Supply Chain Adjustments

The company is expediting the relocation of its supply chain out of China, with significant progress anticipated by the end of the fiscal year for Global Pet Care and Home and Garden segments.

Free Cash Flow Target

Spectrum Brands aims to generate approximately $160 million in free cash flow for the year, equating to $6 to $7 per share.

Share Repurchases

The company repurchased approximately 2 million shares during the second quarter and has returned over $1.28 billion of capital to shareholders since the close of the HHI transaction.

Negative Updates

Impact of Tariffs

The company faces significant challenges due to increased tariffs on Chinese goods, leading to a pause in sourcing finished goods from China and impacting the Home and Personal Care segment.

Deteriorating Consumer Sentiment

Sales were negatively affected by softer than expected US consumer sentiment, impacting category growth and leading to a 6% decrease in net sales.

Adjusted EBITDA Decline

Adjusted EBITDA decreased by $41 million to $71.3 million, driven by lower volumes, reduced gross margins, and increased investment in brand-focused areas.

Company Guidance

During the Q2 2025 earnings call for Spectrum Brands Holdings, significant guidance was provided amidst a challenging global economic landscape. The company is navigating volatile tariff situations, particularly with tariffs on Chinese goods reaching up to 70%, affecting approximately 40% of its Home and Personal Care (HPC) purchases for the U.S. market. Spectrum Brands is expediting the movement of its supply chain out of China, aiming to source 35% of HPC's current U.S. volume from non-Chinese sources by the end of fiscal 2025, with plans to increase to the mid-forties by year-end. Despite a 6% decrease in net sales, the company remains financially robust, with a net leverage of 1.7 turns and an expectation to generate $160 million in free cash flow for the year, equivalent to $6-$7 per share. The company is pausing share repurchases to maintain a strong balance sheet and is focused on strategic investments and potential acquisitions, particularly within the Global Pet Care segment, which saw a 7.1% sales decrease. The Home and Garden segment experienced a 5.2% sales decline due to timing shifts and seasonal factors, though it remains relatively insulated from tariff impacts. Overall, Spectrum Brands is prioritizing agility and operational efficiency to weather current economic uncertainties, with a focus on long-term strategic growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.