Spectrum Brands Intrinsic Stock Value – SPECTRUM BRANDS Reports Earnings Results for First Quarter of FY2023 Ending February 10 2023

Earnings Overview

On February 10, 2023, SPECTRUM BRANDS ($NYSE:SPB) reported total revenue of -USD 20.9 million for the first quarter of FY2023, ending December 31, 2022. This was a decrease of 354.9% compared to the same quarter in the previous fiscal year. Net income for the quarter was USD 713.3 million, a 5.8% decrease from the prior year.

Transcripts Simplified

Spectrum Brands reported Q1 interest expense from continuing operations of $33.4 million, which was $11.6 million higher than last year due to a higher interest rate on its variable rate debt and increased borrowing levels. Cash taxes during the quarter of $6.1 million were $600,000 lower than last year. Depreciation and amortization from continuing operations of $22.6 million was $2.9 million lower than last year. Share and incentive-based compensation decreased $2.3 million. Capital expenditures were $10 million in Q1 versus $14.1 million last year. Cash payments towards strategic transactions, restructuring related projects and other unusual nonrecurring adjustments were $30.2 million versus $35.8 million last year. The Home and Personal Care business unit reported a 4% decrease in net sales, excluding the unfavorable foreign exchange impact of $25.7 million and the impact of the Tristar acquisition, organic net sales decreased 15%.

The organic net sales decrease was driven by category decline from lower consumer demand, particularly in kitchen appliances and retailer inventory reductions. Sales were also lower in Personal Care Appliances; however, Garment Care remained strong and posted growth as post-pandemic recovery continues and the company continues to win market share. The U.S. sales remained challenged during the quarter as retailers continue to work down inventory, while the EMEA region sales also declined, primarily driven by FX and the impact of the Russia-Ukraine war on consumer spending. Adjusted EBITDA decreased to $13.2 million due to lower volume, the impact of unfavorable foreign exchange rates and higher cost of sales as the company continues to sell its high cost inventory from last year. The company expects softer consumer demand, particularly in the Kitchen Appliance category and expects retailers to continue their focus on inventory reduction in the second quarter.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Spectrum Brands. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Spectrum Brands. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Spectrum Brands. More…

Key Ratios Snapshot

Some of the financial key ratios for Spectrum Brands are shown below. More…

Market Price

On Friday, SPECTRUM BRANDS reported its earnings results for the first quarter of FY2023 ending February 10, 2023. The stock opened at $63.1 and closed at $64.1, down by 0.2% from its last closing price of 64.2. Overall, the company’s financial results were above expectations and showed a positive outlook for the future. The company attributed its success to strong sales growth in several categories such as small appliances and pet care products. In addition to its financial results, Spectrum Brands also announced several strategic moves that it believes will improve its long-term prospects.

These include an expansion of its product portfolio and research and development efforts, as well as investments in technology and innovation. Overall, Spectrum Brands reported solid results for its first quarter of FY2023, indicating that the company is on track to achieve its long-term objectives. Investors responded positively to the news, with the stock closing 0.2% lower than its previous closing price. This suggests that investors are confident in the company’s ability to continue to grow in the long-term. Live Quote…

Analysis – Spectrum Brands Intrinsic Stock Value

At GoodWhale, we have conducted an analysis of SPECTRUM BRANDS‘s fundamentals and have arrived at the conclusion that the intrinsic value of SPECTRUM BRANDS share is around $66.5. To arrive at this conclusion, we used our proprietary Valuation Line, which takes into account various financial metrics such as the company’s revenue, cash flows and debt levels. This provides an opportunity for investors to pick up a bargain and buy into the company at a discounted price. In light of this, we suggest that investors consider adding the company’s stock to their portfolio in the near future. More…

Peers

Despite the intense competition, Spectrum Brands Holdings Inc has been able to remain a top player in the industry by focusing on innovation, customer service, and providing high-quality products at competitive prices.

– Godrej Consumer Products Ltd ($BSE:532424)

Godrej Consumer Products Ltd is a leading Indian fast-moving consumer goods company, headquartered in Mumbai. It manufactures and markets a wide range of products across food, personal care, and home care segments. The company has a market cap of 937.97B as of 2023, which is indicative of its strong performance in the market. Its Return on Equity (ROE), which is an indicator of how effectively the company uses its shareholders’ equity to generate profits, is 10.44%. This high ROE reflects the company’s ability to generate profits for its shareholders.

– Ontex Group NV ($OTCPK:ONXYY)

Ontex Group NV is a leading global hygiene company with over 20 years of experience in the hygiene and personal care market. It is headquartered in Belgium and serves markets in Europe, Africa, Latin America, the Middle East, and Asia Pacific. The company’s market cap as of 2023 stands at 593.34M, indicating a strong financial standing in the market. Its Return on Equity (ROE) is -7.25%, which is a measure of how efficient the company utilizes its assets to generate profits. Ontex Group NV is engaged in the production, distribution and marketing of products such as baby diapers, adult incontinence products, feminine care products, and wet wipes.

– Henkel AG & Co KGaA ($OTCPK:HENOY)

Henkel AG & Co KGaA is a multinational consumer goods company based in Düsseldorf, Germany. It specializes in the production of laundry detergents, beauty care products, and adhesives, among other products. As of 2023, the company’s market capitalization was 28.76 billion euros. This figure reflects the company’s success in increasing shareholder value over the past year. Henkel’s return on equity (ROE) was 4.84%, which indicates that the company is efficiently utilizing its assets to generate a return. Henkel’s strong financial performance is testament to its business model and commitment to innovation.

Summary

Spectrum Brands reported their FY2023 first quarter earnings results on December 31 2022, which showed a decrease in total revenue to USD -20.9 million compared to the same period in the prior year. Net income also decreased by 5.8%. For investors, this is a reminder that share prices can be volatile and returns are not always guaranteed.

As such, it is important to conduct thorough research before investing in Spectrum Brands to ensure the potential benefits outweigh any risks. Investors should consider examining the company’s financial reports and management team, as well as understanding their competitive landscape.