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1. Company Snapshot

1.a. Company Description

Spectrum 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.

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1.b. Last Insights on SPB

Spectrum Brands Holdings, Inc.'s recent performance was negatively driven by a Q4 earnings miss, with earnings per share of $0.97, missing the consensus estimate of $1.13. The company's organic sales increased 4.8% year-over-year, but soft demand for small kitchen appliances and higher costs offset this growth. Additionally, the company's pricing actions and cost efficiencies were expected to aid results, but ultimately did not sufficiently mitigate the earnings miss.

1.c. Company Highlights

2. Strong FCF Generation and Balance Sheet

The company's financial performance in fiscal 2025 was marked by a 5.2% decrease in net sales, driven by supply constraints and category softness. Gross profit decreased, and gross margins declined 220 basis points, largely due to lower volume and unfavorable mix. However, operating expenses decreased 14.6%, and operating income increased due to lower operating expenses. Adjusted EBITDA was $63.4 million, a decrease of $5.5 million due to lower volume and reduced gross margins, offset by lower operating expenses. Adjusted diluted EPS increased to $2.61, beating estimates of $0.77, due to a one-time tax benefit and reduced shares outstanding.

Publication Date: Nov -26

📋 Highlights
  • Strong Free Cash Flow and Shareholder Returns:: Generated $171M in adjusted free cash flow, returning $375M to shareholders via buybacks and dividends in fiscal 2025.
  • Supply Chain Diversification Progress:: Reduced direct spend in China to $15–20M by fiscal 2026, with cost reductions and streamlined operations driving efficiency.
  • Q4 Financial Performance:: Net sales declined 5.2%, gross margins fell 220 bps, but operating expenses dropped 14.6%, resulting in higher operating income.
  • 2026 Guidance and Strategic Priorities:: Aiming for flat to low single-digit sales growth, 50% adjusted free cash flow conversion, and operational excellence via ERP upgrades.
  • Balance Sheet Strength:: Maintained $123.6M cash balance and $492.3M available on the revolver, with net debt of $457.8M and debt-to-EBITDA under control.

Segment Performance

The global pet care business reported net sales down 1.5%, with organic net sales down 3.3%. However, adjusted EBITDA was $49.6 million, a $5.3 million increase from the prior year. The home and garden business reported net sales up 3.2%, but adjusted EBITDA was down due to unfavorable mix and inflation. The home and personal care business reported net sales down 11.9%, with organic net sales down 13.4%, and adjusted EBITDA was down due to lower volumes, unfavorable mix, and tariffs.

Outlook and Guidance

For fiscal 2026, the company expects net sales to be flat to up low single digits, with adjusted EBITDA growing low single digits, primarily driven by continued expense management and cost improvement initiatives. Adjusted free cash flow is expected to be strong at approximately 50% conversion of adjusted EBITDA. The company is confident in its ability to drive growth and value for stakeholders, with a strong balance sheet and $124 million in cash.

Valuation and Returns

With a P/E Ratio of 20.1 and EV/EBITDA of 9.59, the company's valuation appears reasonable. The company's Return on Invested Capital (ROIC) is 2.67%, and Return on Equity (ROE) is 3.67%. The dividend yield is 3.99%, and free cash flow yield is 5.27%, indicating a decent return for investors. As Faisal Cutter mentioned, "We're excited to report that both our Global Pet Care and Home and Garden businesses are expected to return to growth in fiscal 2026."

Operational Efficiency

The company is taking steps to improve operational efficiency, including the rollout of S/4HANA, which is expected to enhance efficiency and reduce corporate costs. The company is also focusing on innovation, advertising, and marketing, and is allocating more resources to R&D and marketing. With a strong balance sheet and improving operational efficiency, the company is well-positioned to drive growth and value for stakeholders.

3. NewsRoom

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Should Investors Buy Spectrum Brands as Callodine Capital Keeps Adding to its Largest Position?

Dec -02

Source: fool.com

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Spectrum Brands Holdings Inc. $SPB Shares Acquired by American Century Companies Inc.

Nov -26

Source: defenseworld.net

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AXQ Capital LP Decreases Stock Holdings in Spectrum Brands Holdings Inc. $SPB

Nov -25

Source: defenseworld.net

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Superior Plus (TSE:SPB) Trading Down 21.1% Following Analyst Downgrade

Nov -17

Source: defenseworld.net

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Superior Plus (TSE:SPB) Shares Down 21.1% on Analyst Downgrade

Nov -15

Source: defenseworld.net

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Superior Plus (TSE:SPB) Shares Down 21.1% Following Analyst Downgrade

Nov -15

Source: defenseworld.net

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Superior Plus (TSE:SPB) Shares Down 21.1% Following Analyst Downgrade

Nov -15

Source: defenseworld.net

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Superior Plus (TSE:SPB) Stock Price Down 21.1% on Analyst Downgrade

Nov -15

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Home and Personal Care

Expected Growth: 2.0%

Spectrum Brands Holdings, Inc.'s Home and Personal Care segment growth of 2.0% is driven by increasing demand for household essentials, innovative product launches, and strategic marketing initiatives. Additionally, the segment benefits from a strong brand portfolio, including Black+Decker and Russell Hobbs, and a growing e-commerce presence.

Global Pet Care

Expected Growth: 2.0%

The 2.0% growth of Global Pet Care from Spectrum Brands Holdings, Inc. is driven by increasing pet humanization, premiumization of pet food and supplies, and rising demand for online pet care services. Additionally, the growing popularity of pet adoption and pet owners' willingness to spend on pet health and wellness products contribute to the segment's growth.

Home & Garden

Expected Growth: 2.0%

Spectrum Brands Holdings, Inc.'s Home & Garden segment growth of 2.0% is driven by increasing consumer spending on home improvement, gardening, and outdoor living. Additionally, the company's focus on innovative products, e-commerce expansion, and strategic acquisitions have contributed to the growth. Furthermore, the rising popularity of DIY projects and home decor has also boosted demand for the segment's products.

7. Detailed Products

Remington Shavers

Electric shavers and grooming products for men and women

Russell Hobbs Appliances

Small kitchen appliances, including toasters, kettles, and blenders

Black+Decker Power Tools

Power tools, including drills, saws, and sanders, for DIY and professional use

George Foreman Grills

Indoor and outdoor electric grills for healthy cooking

Spectracide Pest Control

Insecticides, rodenticides, and other pest control products

Arm & Hammer Pet Food

Natural pet food and treats for dogs and cats

IAMS Pet Food

Premium pet food for dogs and cats

Tetra Aquarium Products

Aquarium fish food, filters, and other aquarium supplies

8. Spectrum Brands Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Spectrum Brands Holdings, Inc. is medium due to the presence of alternative products in the market, but the company's strong brand portfolio and product differentiation mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Spectrum Brands Holdings, Inc. due to the company's diversified customer base and lack of concentration of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Spectrum Brands Holdings, Inc. due to the presence of multiple suppliers, but the company's large scale of operations and long-term contracts mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for Spectrum Brands Holdings, Inc. due to the high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Spectrum Brands Holdings, Inc. due to the presence of several established players in the industry, leading to intense competition and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.61%
Debt Cost 9.55%
Equity Weight 60.39%
Equity Cost 9.89%
WACC 9.76%
Leverage 65.58%

11. Quality Control: Spectrum Brands Holdings, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 8.1

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A-Score: 4.8/10

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Value: 9.5

Growth: 3.0

Quality: 3.1

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

57.19$

Current Price

57.19$

Potential

-0.00%

Expected Cash-Flows