Energizer (ENR) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales were $643.3M, down 3.0% year-over-year, with organic sales declining 5.5% due to timing shifts, slower auto care season, and Middle East conflict impacts; six-month sales rose 2.0% to $1,422.2M, driven by the APS acquisition offsetting organic declines.

• Adjusted gross margin rose to 44.4% from 40.8% last year, aided by a $47.6M tariff refund and $11.7M in production tax credits; reported gross margin was 40.2%.

• Adjusted EPS was $0.94, up from $0.67, while reported EPS was $0.15, impacted by a $26.1M non-cash pension settlement loss; adjusted EBITDA increased 13% year-over-year to $158.6M.

• Project Momentum restructuring and operational efficiency initiatives continued, with $31.5M in Q2 pre-tax costs and $62.4M year-to-date, delivering $4M in SG&A savings in Q2.

• Long-term resilience demonstrated through stable net sales, gross margin expansion, and consistent adjusted EBITDA and EPS growth over the past three years.

Financial highlights

• Net earnings for Q2 were $10.1M, down from $28.3M a year ago; adjusted net earnings were $65.1M, up from $49.4M.

• Operating cash flow for the first six months was $147.8M, up from $64.2M, driven by working capital improvements and production tax credits; free cash flow was $105.9M (7.4% of net sales).

• Q2 benefited from a $47.6M tariff refund, with a total $64.3M IEEPA tariff receivable recognized.

• Over the last three years, $740M in cumulative free cash flow generated, enabling debt reduction and capital returns.

• Dividend payments totaled $20.6M ($0.30/share) in the quarter.

Outlook and guidance

• Fiscal 2026 net sales expected to grow low single digits, with organic net sales roughly flat; Q3 outlook is low single-digit growth.

• Adjusted EPS and adjusted EBITDA forecasted at the high end of prior ranges: $3.30–$3.60 and $580–$610M, respectively.

• Q3 2026 adjusted EPS expected between $0.75 and $0.85.

• Guidance incorporates the full $65M tariff receivable.

• Project Momentum restructuring costs for FY26 expected at $60–$70M, with $20–$25M in related costs and $25–$35M in capital expenditures.