Why ACCO Brands Stock Jumped 20% Today
What happened
Shares of ACCO Brands (NYSE: ACCO) popped more than 20% on Wednesday, following the release of the company's second-quarter financial results.
So what
The owner of brands such as Five Star and Mead delivered record sales of $518.7 million, representing year-over-year growth of 4% and 6.8% when excluding the impact of foreign currency movements.
Better still, ACCO Brands' operating income jumped 18.5% to $61.4 million, while net income surged 39.7% to $35.9 million. All told, the company's earnings per share came in at $0.35, which was above analysts' estimates for EPS of $0.32.
"We have managed the business well, and offset inflation and tariffs with pricing and tight expense management," CEO Boris Elisman said in a press release.
ACCO Brands' stock rose sharply on a down day for the market. Image source: Getty Images.
Now what
These results prompted ACCO Brands to raise its full-year sales and profit guidance. The company now expects net sales to be flat year over year, up from a prior forecast of flat to down 3%. Adjusted earnings per share, meanwhile, are projected to be between $1.15 and $1.20, up from $1.10 to $1.20. Management also reiterated its free cash flow target of $165 million to $175 million.
"Our strategy of diversifying into growing channels and geographies is working, and our focus on consumer-centric products and brands is paying off as evidenced by the strong sales and profit growth in North America where we are well-positioned for a very good back-to-school season," Elisman said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.