• Organic Sales Growth: Up nearly 1.5% for the quarter.

• Adjusted Earnings Per Share (EPS): $0.67, at the upper end of the guided range.

• Battery Business Growth: 3% organic growth in the quarter.

• Auto Business Decline: Roughly 2.5% organic decline due to timing shift in refrigerant shipments.

• Adjusted Gross Margin: Increased by 30 basis points to 40.8%.

• Adjusted SG&A: 18.8% of net sales, with a $10.6 million increase.

• Interest Expense: $38 million, improved from the prior year.

• Adjusted EBITDA: $140.3 million.

• Free Cash Flow: Declined by $44.1 million year-over-year.

• Full Year Revenue Outlook: Flat to up 2% for reported and organic net sales.

• Full Year Gross Margin Outlook: Expected to be up 50 basis points.

• Full Year Adjusted EPS Outlook: $3.30 to $3.50 per share.

• Free Cash Flow as Percentage of Net Sales: Expected to be 6% to 8% for the full year.

• Debt Paydown: Approximately $100 million expected for the full year.

• Warning! GuruFocus has detected 5 Warning Signs with ENR.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Energizer Holdings Inc (NYSE:ENR) reported a fourth consecutive quarter of organic sales growth, with a 1.5% increase in Q2.

• The company's battery business showed strong performance, growing 3% organically, supported by distribution wins in the U.S. and international markets.

• Gross margins expanded by 30 basis points to 40.8%, driven by Project Momentum savings.

• Energizer Holdings Inc (NYSE:ENR) successfully refinanced its $500 million revolving credit facility and extended the maturity of its Term Loan B, maintaining similar rates.

• The launch of the Podium Series in the Auto Care segment is progressing well, contributing to a 5.5% organic growth in the appearance business.

Negative Points

• Reported net sales were flat, with the Auto Care segment experiencing a 2.5% organic decline due to a shift in refrigerant shipments.

• Free cash flow declined by $44.1 million year-over-year, impacted by investments in inventory and capital expenditures.

• The company faces challenges from proposed tariffs, with a potential $150 million headwind, primarily from China tariffs.

• Consumer sentiment has shifted towards value, with increased caution in spending, potentially impacting demand.

• Energizer Holdings Inc (NYSE:ENR) has tempered its outlook for the remainder of the year due to macroeconomic uncertainties and consumer confidence issues.

Q & A Highlights

Q: Can you elaborate on the tariff mitigation impacts and how they will affect fiscal '26? A: Mark Lavigne, President and CEO, explained that for fiscal '25, the impact of tariffs has been mitigated. Looking ahead to '26, they are in the process of mitigating exposure, with a line of sight to offset all impacts over the next 12 months. John Drabik, CFO, detailed that they have plans to reduce China exposure from 5% to 2-3% and are working on minimizing the rest of the world tariffs through sourcing changes and commercial actions.