Energizer Q3 Earnings & Sales Beat Estimates, Organic Sales Up Y/Y

Energizer Holdings, Inc. ENR reported impressive third-quarter fiscal 2025 results, wherein both net sales and earnings surpassed the Zacks Consensus Estimate. Also, both the top and bottom lines increased year over year. Organic sales improved year over year.

The company’s ongoing execution of Project Momentum — launched three years ago to enhance margins and operational agility — continues to yield strong results. In the third quarter, the company delivered organic sales growth, improved gross margins and solid earnings. Qualification for U.S. production credits further strengthened performance. Backed by pricing actions and tariff mitigation, Energizer has raised its full-year outlook with confidence in continued earnings growth.

More on ENR’s Q3 Results

Energizer’s adjusted earnings of $1.13 per share beat the Zacks Consensus Estimate of 61 cents. Also, the bottom line increased 43% from the year-ago quarter’s reported figure.

The company reported net sales of $725.3 million, which surpassed the Zacks Consensus Estimate of $702 million and increased 3.4% from the year-ago quarter’s reported number. Organic net sales saw a modest increase of 0.1% year over year. The metric surpassed our prediction of a 1% decrease.

This organic net sales growth was primarily driven by 1.7% growth in volume, which was led by new and expanded distribution in the Battery & Lights category. This volume growth was partially offset by planned strategic pricing and promotional investments totaling 1.6%. In addition, the acquisition of Advanced Power Solutions NV (APS NV), completed on May 2, 2025, contributed $20.8 million to net sales.

Energizer's Q3 Sales Insights by Segments

Net sales of Energizer's Batteries & Lights segment increased 5.1% year over year to $535.1 million. We note that segmental profit increased 22.7% to $158.8 million.

Meanwhile, net sales in the Auto Care segment decreased 1.1% to $190.2 million from the year-ago period. The figure lagged our estimate of a 1.8% increase. Segmental profit decreased sharply by 10.1% to $24.1 million.

ENR’s Margin & Cost Details

In the fiscal third quarter, adjusted gross profit was $325.0 million, up 11.7% year over year. Energizer’s adjusted gross margin expanded 330 basis points to 44.8%. The improvement in adjusted gross margin was driven by an estimated $33.9 million in fiscal 2025 production credits and approximately $12 million in cost savings from Project Momentum during the quarter. These gains were partially offset by higher product costs, including increased freight and warehousing expenses, operational inefficiencies tied to ongoing network rebalancing, strategic pricing and promotional investments and a slightly lower margin from the APS NV acquisition. We expected an adjusted gross margin to be 41.5%, flat year over year.

Adjusted SG&A expenses increased 4.4% year over year to $123.6 million. The year-over-year increase was primarily due to $4.5 million in SG&A costs from the APS NV acquisition, along with continued investment in digital transformation and growth initiatives, and higher legal expenses. These increases were partially offset by approximately $3 million in savings from Project Momentum during the quarter.

Adjusted SG&A costs, as a rate of net sales, were 17%, up slightly from 16.9% in the prior-year quarter. We expected adjusted SG&A expenses, as a percentage of net sales, to be 18.4% in the fiscal third quarter. Advertising and Promotion (A&P) expense increased $5.5 million in the fiscal third quarter, representing 6% of net sales compared with 5.4% in the year-ago period. The increase in spending was primarily attributed to investments supporting the launch of the Podium Series.

Adjusted EBITDA was $171.4 million, up 14.5% year over year, whereas the adjusted EBITDA margin increased 230 basis points to 23.6% from 21.3% in the prior-year quarter.

ENR Stock Past Three-Month Performance

Energizer’s Financial Health Snapshot

As of June 30, 2025, Energizer’s cash and cash equivalents were $171.1 million, with long-term debt of $3.22 billion and shareholders' equity of $183.2 million. The operating cash flow as of the fiscal third quarter was $85.6 million and free cash flow was $16.5 million.

During the third quarter, Energizer repurchased 2.8 million shares of common stock for $62.6 million, at an average price of $22.40 per share. Following the quarter’s end, the company repurchased an additional 1.2 million shares at $22.49 per share. Dividend payments during the quarter totaled approximately $21 million, or 30 cents per common share.

What to Expect From Energizer in Q4 & FY25?

For fiscal year 2025, Energizer now expects net sales growth in the range of 1% to 3%, which includes an estimated $40 to $50 million in revenues from the recently acquired APS NV business. Organic net sales are anticipated to be flat to up 2%.

The company has raised its full-year guidance for adjusted earnings per share to a range of $3.55 to $3.65. This compares with the prior estimate of $3.30 to $3.50. Adjusted EBITDA is now projected to be between $630 million and $640 million, inclusive of an estimated $40 to $45 million benefit from production credits, prior to reinvestment. The previous estimate of adjusted EBITDA was between $610 million and $630 million.

Looking ahead to the fourth quarter, reported net sales growth is expected to range between 2% and 4%, while organic net sales are projected to be flat to down 2%. The company expects fourth-quarter gross margin to be affected by approximately $20 million in transitory costs, including tariffs applied earlier or at higher-than-current rates, and short-term operational inefficiencies associated with ongoing strategic network realignment and investments.

Adjusted earnings per share for the fourth quarter are expected to be in the range of $1.05 to $1.15, including an estimated benefit of $5 to $10 million from production credits, prior to reinvestment.

Shares of this Zacks Rank #3 (Hold) company have lost 14.5% in the past three months compared with the industry’s decline of 4.3%.

Some Better-Ranked Bets

We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Post Holdings POST, Nomad Foods Ltd. NOMD and Ingredion Incorporated INGR.

Post Holdings is a consumer-packaged goods holding company. POST presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Post Holdings’ current sales and earnings indicates growth of 2.7% and 7.3%, respectively, from the year-ago period’s reported figures. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.

Nomad Foods manufactures and distributes frozen foods. It currently has a Zacks Rank of 2 (Buy).

NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The consensus estimate for Nomad Foods’ current financial-year sales and earnings indicates growth of 8.6% and 10.4%, respectively, from the year-ago period’s reported figures.

Ingredion Incorporated serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries. It currently carries a Zacks Rank of 2. INGR delivered a trailing four-quarter average earnings surprise of 11.1%.

The consensus estimate for INGR’s current financial-year sales and earnings indicates growth of 1% and 6.8%, respectively, from the prior-year reported levels.

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This article originally published on Zacks Investment Research (zacks.com).

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