Energizer Q4 Earnings Miss Estimates, Organic Sales Decline Y/Y

Energizer Holdings, Inc. ENR reported fourth-quarter fiscal 2025 results, wherein the net sales surpassed the Zacks Consensus Estimate and earnings missed the same. Also, the top line increased and the bottom line decreased year over year. Also, organic sales declined year over year.

As fiscal 2026 begins, Energizer is entering a transition period, with the fiscal first quarter more affected by temporary tariff costs and related mitigation actions. In response, the company has extended Project Momentum and accelerated integration efforts to protect margins and maintain flexibility for future investments. Supported by resilient categories, trusted brands and a clear strategic plan, Energizer is positioned to build on its progress and strengthen performance as the year advances.

More on ENR’s Q4 Results

Energizer’s adjusted earnings of $1.05 per share missed the Zacks Consensus Estimate of $1.12. Also, the bottom line decreased 13.9% from the year-ago quarter’s reported figure.

The company reported net sales of $832.8 million, which surpassed the Zacks Consensus Estimate of $831 million and increased 3.4% from the year-ago quarter’s reported number. This was driven by $42.8 million in acquisition-related sales, partially offset by a 2.2% decline in organic net sales. The metric lagged our prediction of a 0.3% decrease in organic net sales.

This organic net sales decline was primarily due to a 2.9% decrease in volumes caused by softer consumer demand, mainly in North America. This was partially mitigated by stronger e-commerce and international performance in Batteries & Lights, as well as new innovation and broader distribution in Auto Care. These volume pressures were partly offset by a 0.7% increase in pricing driven by innovation and tariffs across both segments.

Energizer's Q4 Sales Insights by Segments

Net sales of Energizer's Batteries & Lights segment increased 3.9% year over year to $677.2 million. The figure lagged our estimate of a 4.5% increase. We note that segmental profit decreased 15.4% to $151.8 million.

Meanwhile, net sales in the Auto Care segment increased 1% to $155.6 million from the year-ago period. Segmental profit increased sharply by 29% to $25.8 million.

ENR’s Margin & Cost Details

In the fiscal fourth quarter, adjusted gross profit was $320.3 million, down 5.7% year over year. Energizer’s adjusted gross margin contracted 370 basis points to 38.5%. The decline in adjusted gross margin was due to higher input costs stemming from production inefficiencies during the network rebalancing, along with increased warehousing, distribution and tariff expenses, and the lower-margin APS business. 

These pressures were partly offset by the fiscal 2025 production tax credit of $7.7 million, roughly $6 million in savings from Project Momentum and benefits from price increases implemented to counter tariff impacts. We expected an adjusted gross margin to be 40.3% in the quarter under review.

Adjusted SG&A expenses increased 4.2% year over year to $128.2 million. The year-over-year increase was mainly driven by $7.3 million of additional SG&A from the APS business, higher investment in digital transformation and increased recycling fees. These were partially offset by roughly $4 million in savings from Project Momentum.

Adjusted SG&A costs, as a rate of net sales, were 15.4%, up slightly from 15.3% in the prior-year quarter. We expected adjusted SG&A expenses, as a percentage of net sales, to be 15.3% in the fiscal fourth quarter. Advertising and Promotion expenses were 4.1% of net sales in the fiscal fourth quarter compared with 4.6% in the same quarter last year, reflecting a decrease of 50 basis points or $3.3 million.

Adjusted EBITDA was $171.2 million, down 8.6% year over year, whereas the adjusted EBITDA margin decreased 260 basis points to 20.6% from 23.2% in the prior-year quarter.

ENR Stock Past Three-Month Performance

Energizer’s Financial Health Snapshot

As of Sept. 30, 2025, Energizer’s cash and cash equivalents were $236.2 million, with long-term debt of $3.41 billion and shareholders' equity of $169.9 million. The operating cash flow as of the fiscal fourth quarter was $147.1 million and free cash flow was $63.2 million.

During the fiscal fourth quarter, Energizer repurchased 1.2 million shares of common stock for $27.1 million, or $22.49 per share. Dividend payments during the quarter totaled approximately $21.3 million, or 30 cents per common share.

What to Expect From Energizer in FY26?

For fiscal 2026, the company expects organic net sales to be flat to slightly higher across both Batteries, Lights and Auto Care. Gross margin is projected to decline modestly, as tariff impacts are largely offset by previously implemented pricing actions, production credits and productivity initiatives, with slight dilution from the full-year inclusion of the APS business. 

As a result, adjusted earnings per share are expected to range from $3.30 to $3.60 and adjusted EBITDA is projected between $580 million and $610 million. In fiscal 2025, adjusted earnings per share were $3.52 and adjusted EBITDA was $623.6 million.

Earnings cadence will be weighted toward the later part of the year, with the fiscal first quarter reflecting a difficult sales comparison and temporary cost pressures. After the fiscal first quarter, the company expects to deliver double-digit adjusted EPS growth for the remainder of the year. For the fiscal first quarter, organic net sales are expected to decline a high single-digit percentage, with adjusted EPS in the range of 20 cents to 30 cents.

Shares of this Zacks Rank #4 (Sell) company have lost 16% in the past three months compared with the industry’s decline of 10.5%.

Some Better-Ranked Bets

We have highlighted three better-ranked stocks, namely Lamb Weston Holdings, Inc. LW, United Natural Foods, Inc. UNFI and Chefs' Warehouse Holdings, LLC CHEF.

Lamb Weston is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and also provides a range of appetizers. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LW delivered a trailing four-quarter earnings surprise of 16%, on average. The consensus estimate for Lamb Weston’s current fiscal-year sales and earnings indicates growth of 1.3% and a decline of 6.3%, respectively, from the year-ago period’s reported figures.

United Natural Foods is the leading distributor of natural, organic and specialty food and non-food products. It flaunts a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for United Natural Foods’ current fiscal-year earnings and revenues implies growth of 167.6% and 2.5%, respectively, from the year-ago actuals. UNFI delivered a trailing four-quarter average earnings surprise of 416.2%.

Chefs' Warehouse is a distributor of specialty food products. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Chefs' Warehouse’s current financial-year earnings and revenues implies growth of 29.3% and 8.1%, respectively, from the year-ago actuals. CHEF delivered a trailing four-quarter average earnings surprise of 14.7%.

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

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