Q2 Financials for Spectrum Brands

Spectrum Brands Holdings, Inc.—which encompasses a wide range of products from batteries to Repel bug sprays to Armor All automotive products to personal care products— today reported record performance for the second quarter of fiscal 2016 ended April 3, 2016 and reiterated expectations for a seventh consecutive year of record results for fiscal 2016.
 
Net sales of $1.21 billion in the second quarter of fiscal 2016 increased 13.4 percent compared to $1.07 billion last year. Excluding the negative impact of $32.1 million of foreign exchange and acquisition sales of $122.8 million, organic sales increased 4.9 percent from the prior year.
 
Net income of $75.2 million and diluted earnings per share of $1.26 in the second quarter of fiscal 2016 compared to net income of $27.8 million and diluted earnings per share of $0.52 in fiscal 2015.
 
“Our solid second quarter results, together with our strong first quarter, gives us an excellent first half and momentum to deliver a 7th consecutive year of record performance in fiscal 2016,” said Andreas Rouvé, CEO of Spectrum Brands Holdings. “Home and Garden and HHI delivered record results and, regionally, there were solid performances in the U.S. as well as in Europe and Latin America on a currency neutral basis.
 
 According to Rouvé the firm is  “selectively investing more in R&D, marketing and other growth initiatives and building out sales teams to help push our ‘more, more, more’ organic strategy to enter more countries, serve more channels, and launch more categories through leveraging our strong retailer relationships.”
 
Net sales for the global personal care product category—which includes electric shaving and grooming products, hair care appliances and accessories— were $108.4 million in the second quarter of fiscal 2016 compared to $110.5 million last year. Excluding negative foreign exchange impacts of $5.3 million, fiscal 2016 second quarter net sales increased 2.9 percent. Double-digit net sales growth on a constant currency basis in Europe primarily from hair care and in Latin America from new listings and distribution gains more than offset lower North American revenues due predominantly to category softness, tighter retailer inventory levels, and the timing of retailer new product placements.
 
The home and garden segment reported record second quarter results. Fiscal 2016 second quarter net sales of $155.0 million increased 25.1 percent compared to $123.9 million in last year’s second quarter. Strong growth in the repellent and household controls categories, as well as increased sales in the lawn and garden controls category, resulted from favorable weather, the impact of the Zika virus, strong early season retailer orders and market share gains.
 
The Global Auto Care (GAC) segment reported net sales of $119.5 million, net income of $39.1 million and adjusted EBITDA of $48.6 million in the second quarter of fiscal 2016. US appearance and performance category consumption was solid, driven by favorable early spring weather across the U.S. and solid retailer orders.
 
Spectrum Brands expects fiscal 2016 net sales, as reported, to increase in the high-single digit range compared to fiscal 2015 reported net sales of $4.69 billion, including the positive impacts of the acquisitions of the European pet food business on December 31, 2014, Salix Animal Health on January 16, 2015 and Armored Auto Group on May 21, 2015, along with an anticipated negative impact from foreign exchange of approximately 330 to 350 basis points based on current spot rates.