Energizer (ENR) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 rose 6.5% to $778.9 million, driven by the APS acquisition, though organic sales declined 4.3% due to softer U.S. demand and prior year storm activity.

• Adjusted EPS was $0.31, down from $0.67 prior year, with a reported net loss of $3.4 million or $(0.05) per share, reflecting higher restructuring and input costs.

• Free cash flow reached $124.2 million (15.9% of sales), enabling over $100 million in debt reduction and nearly $28 million returned to shareholders via dividends and share repurchases.

• Strategic priorities focused on restoring growth, rebuilding margins, and returning to historical cash flow levels, with a foundation set for sequential gross margin expansion and earnings growth in the back half of the year.

• Completed integration of APS acquisition and re-aligned manufacturing footprint to support margin restoration and efficiency initiatives.

Financial highlights

• Adjusted gross margin declined to 34.9% (down 510 bps year-over-year), mainly due to higher input costs, tariffs, and lower APS margins; reported gross margin was 32.9%.

• Batteries & Lights net sales grew 8.3% reported to $685.2 million, but declined 3.8% organically; Auto Care net sales dropped 5.6% to $93.7 million.

• Adjusted EBITDA was $106.9 million, down from $140.7 million prior year.

• SG&A expenses increased to $149.3 million (19.2% of sales), mainly due to APS, digital investments, and higher legal and stock compensation costs.

• Operating cash flow was $149.5 million, with capital expenditures of $25.3 million.

Outlook and guidance

• Fiscal 2026 guidance: organic net sales expected flat to slightly up, adjusted EPS $3.30–$3.60, adjusted EBITDA $580–$610 million, and free cash flow to exceed 10% of net sales.

• Q2 2026 outlook: organic net sales down 4–5%, adjusted gross margin to improve sequentially by 300 bps, and adjusted EPS between $0.40–$0.50.

• Project Momentum restructuring extended into 2026, targeting $15–$20 million in savings and $15–$25 million in tariff mitigation/cost avoidance.

• Future production tax credits expected at $55–$65 million annually until phase-out begins in 2030.

• Guidance excludes potential impacts from recent winter storms.