Energizer (ENR) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 net sales were $701.4 million, up 0.3% reported and 1.2% organic year-over-year, with adjusted EPS rising 46% to $0.79 and a reported net loss of $43.8 million due to a $110.6 million non-cash impairment charge.

• Adjusted gross margin expanded by 270 basis points to 41.5%, while Project Momentum delivered $117–$120 million in savings to date, targeting $180–$200 million.

• Debt paydown continued for the eighth consecutive quarter, totaling $150 million year-to-date and reducing net leverage to 5.0x.

• Acquisitions in Belgium and Brazil expanded manufacturing and Auto Care presence.

• Auto Care segment profit surged 54% in Q3, while Batteries & Lights saw modest growth.

Financial highlights

• Q3 adjusted EBITDA was $149.7 million, up 18% year-over-year; adjusted net earnings were $57.4 million.

• Free cash flow for the first nine months was $195.1 million (9.4% of net sales); net debt at $3.08 billion as of June 30, 2024.

• Q3 adjusted gross margin: 41.5%; reported gross margin: 39.5%.

• Interest expense declined due to lower average debt balances.

• Dividend payments totaled $66 million year-to-date.

Outlook and guidance

• Fiscal 2024 organic net sales expected to decline ~2%; Q4 organic net sales expected to be flat.

• Adjusted EBITDA guidance raised to $610–$620 million; adjusted EPS expected at $3.20–$3.30 for FY2024 and $1.10–$1.20 for Q4.

• Project Momentum savings for FY24 now expected at $80–$90 million, with total program savings of $180–$200 million.

• Debt paydown for the year expected at $175–$200 million; net leverage targeted below 5.0x by year-end.

• Capital expenditures for FY24 anticipated at $95–$105 million.