Spectrum Brands (SPB) Q2 2026 earnings summary

Executive summary

• Net sales increased 4.9% year-over-year to $709 million, with adjusted EBITDA up 17.8% to $84 million, marking a return to growth since Q1 2025.

• Strong performance in Global Pet Care and Home & Garden segments offset softness in Home & Personal Care, which saw net sales decline but improved profitability.

• Net income from continuing operations rose to $22.5 million from $1.8 million in the prior year quarter.

• Strategic partnership formed with Oaktree Capital in HPC, advancing the separation strategy and providing $127 million in new investment.

• Operating cash flow improved significantly to $77.9 million for the six months, compared to a $48.6 million outflow last year.

Financial highlights

• Organic net sales rose 1.5% year-over-year, driven by Global Pet Care and Home & Garden.

• Gross margin improved by 60 bps to 38.1%, aided by pricing, cost actions, and FX.

• Adjusted EBITDA margin increased to 11.8% from 10.6% year-over-year.

• Diluted EPS from continuing operations was $0.96, while adjusted EPS rose to $1.25.

• Adjusted free cash flow for the six months was $60.6 million, a significant improvement from the prior year.

Outlook and guidance

• Fiscal 2026 net sales expected to be flat to up low single digits; adjusted EBITDA outlook raised to low to mid-single digit growth.

• Adjusted free cash flow conversion targeted at approximately 50% of adjusted EBITDA.

• Tariff and inflation impacts expected to be offset by mitigation actions; no tariff refund benefits included in guidance.

• Depreciation/amortization forecasted at $115–$125 million; capex at $50–$60 million; cash taxes at $40–$50 million.

• Management expects continued operational improvements and supply chain diversification to mitigate macroeconomic and trade policy risks.