Energizer Posts 3% Q2 Sales Decline, Adjusted EPS Rises 40% to $0.94
Energizer’s Q2 net sales fell 3.0% to $643.3 million while gross margin rose to 40.2% (44.4% adjusted), bolstered by a $47.6 million tariff refund and $11.7 million in production tax credits. Adjusted EPS climbed to $0.94 from $0.67, and the company raised its full-year outlook to low single-digit net sales growth.
1. Q2 Financial Results
In the quarter ended March 31, net sales reached $643.3 million, down 3.0% from $662.9 million a year earlier. Organic net sales declined 5.5% due to timing shifts in battery orders, slower auto care season start and Middle East impacts, partially offset by 0.6% price increases and a $2.1 million boost from the APS acquisition.
2. Margin Improvement Drivers
Reported gross margin improved to 40.2% from 39.1%, and adjusted gross margin jumped 360 basis points to 44.4%, driven by a $47.6 million tariff refund, $11.7 million in production tax credits and pricing gains. Those benefits were partly offset by higher input costs, unfavorable product mix and restructuring expenses.
3. Outlook and Guidance
Energizer updated its fiscal 2026 outlook to low single-digit net sales growth with organic sales roughly flat. Adjusted gross margin is now expected between 40% and 41%, and the company projects adjusted EPS and adjusted EBITDA at the high end of previously provided ranges.
4. Cash Flow and Capital Allocation
For the six months ended March 31, operating cash flow was $147.8 million and free cash flow totaled $105.9 million, or 7.4% of net sales. Dividend payments in the quarter amounted to $20.6 million, or $0.30 per share, supporting disciplined capital allocation.