Third quarter net sales at Spectrum Brands were down as company officials pinned the decline on a “confluence of factors” that include the impact of macroeconomic factors as well as issues that are specific to the company.
For the quarter ended July 2, company-wide net sales were $1.3 billion, a decrease of 4.2%. Net income of $76.9 million and diluted EPS of $1.31 decreased compared to net income of $101.9 million and diluted EPS of $1.71 in fiscal 2016, primarily due to lower volumes, partially offset by reduced interest expense, company officials said.
“Our third quarter performance is not representative of the positive outlook we have for our growth prospects, strategic direction and efficient global operating model,” said Andreas Rouvé, CEO of Spectrum Brands Holdings. “Systemic U.S. retailer inventory reduction programs and unfavorable early season weather that reduced customer orders and slowed POS predominantly in our seasonal home and garden and global auto care businesses impacted sales by approximately $25 million.”
He noted that the company’s e-commerce business continued to grow, seeing double-digit growth in the third quarter.
“We continue to invest more with our retail partners and expand our digital marketing resources especially to drive our innovative and higher-priced products,” Rouvé said.
In the company’s global batteries and appliances segment, third quarter sales were $441.1 million, down 2.9% year over year. Company officials said the decline was primarily due to lower personal care and small appliances revenues.
Net sales for the global personal care product category decreased $4.9 million or 4.2%. According to the company, growth in Latin America was more than offset by lower U.S. and European revenues largely attributable to implemented price increases in Europe, increased competitor promotions and sluggish POS in the U.S. Excluding negative foreign exchange impacts of $2.3 million, organic net sales declined 2.2%.
Net sales in the global small appliances product category fell $5.7 million or 3.8%. Higher U.S. revenues from growth in e-commerce and mass channels were more than offset by lower sales in Europe and Latin America from a combination of Brexit-related price increases and exits from unprofitable businesses, the company said.
