In This Article:
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Adjusted EPS: $0.03, within outlook range.
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Gross Margin Rate: Expanded by 120 basis points.
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Free Cash Flow: $26 million, a $51 million improvement over last year.
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Leverage Ratio: Ended the quarter at 3.5 times, down from 4.3 times at the end of Q1 last year.
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Comparable Sales: Down 11%, with impacts from planned exit of lower-margin business and softer sales in Brazil.
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Inventory: Down significantly versus Q1 of the prior year.
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Cost Savings: On track to deliver more than $20 million in 2024, with $4 million realized in the quarter.
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Segment Performance: Americas segment comparable sales declined 15%; International segment sales declined 6%.
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Adjusted Operating Income: $16 million, down from $24 million last year.
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Gross Debt: $961 million, $138 million lower than last year.
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Full Year Outlook: Reported sales expected to be down 5% to 7%; Adjusted EPS forecasted to be $1.2 to $1.7 per share.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ACCO Brands Corp (NYSE:ACCO) reported a healthy free cash flow of $26 million in Q1, a $51 million improvement over the previous year.
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The company successfully expanded its gross margin rate by 120 basis points through disciplined cost management and strategic pricing.
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Inventory management was effectively controlled, with inventory down significantly compared to Q1 of the previous year.
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ACCO Brands Corp (NYSE:ACCO) achieved a leverage ratio of 3.5 times, well below the 4.3 times ratio at the end of Q1 last year, demonstrating improved financial stability.
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The company is seeing positive sales trends and market share stability in its technology accessories categories, with new product launches exceeding initial expectations.
Negative Points
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First quarter comparable sales were down 11%, with declines driven by the planned exit of lower-margin business and softer sales at the end of the back-to-school season in Brazil.
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The demand environment for ACCO Brands Corp (NYSE:ACCO)'s office products in the US and Canada remains weak, impacted by structural shifts in work environments since the pandemic.
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ACCO Brands Corp (NYSE:ACCO) faces ongoing global headwinds from softer consumer and business demand, affecting sales across various segments.
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The company's full-year outlook has been tempered due to a sales shortfall in the first quarter and ongoing soft demand trends in the office product category.
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While ACCO Brands Corp (NYSE:ACCO) is exiting lower-margin private label products, this strategy is expected to impact top-line sales, particularly in the second quarter.