Household products company Spectrum Brands (NYSE: SPB) missed Wall Street’s revenue expectations in Q2 CY2025, with sales falling 10.2% year on year to $699.6 million. Its non-GAAP profit of $1.24 per share was in line with analysts’ consensus estimates.

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"Our results this quarter reflect Spectrum Brands making the right but difficult long-term decisions for the Company. When the tariff rate on Chinese imports to the US went to 145% early in the third quarter, we paused virtually all purchases from China and accelerated our plans to further diversify our supply base. We strategically began importing again when the rate dropped to 30%, but the almost 2 months we went without importing some products meant that we were unable to fill all orders this quarter. We also negotiated tariff-related pricing with our retailers. In some cases, when those negotiations stalled, we stopped shipping until negotiations were finalized. We now have our initial rounds of pricing in place, but our quarterly sales were negatively impacted by these stop shipments. We also saw continued soft US and European consumer demand in our Global Pet Care and Home and Personal Care businesses, while a wet and cool early summer affected the start to the Home and Garden season. We have now put Q3 in the rearview mirror and are focusing on the remainder of fiscal 2025 and the future. Supply is turned back on, we are diversifying our supply base, and we have our initial pricing in place. We have also looked internally and reduced costs by over $50 million in fiscal 2025," said David Maura, Chairman and Chief Executive Officer of Spectrum Brands.

Company Overview

A leader in multiple consumer product categories, Spectrum Brands (NYSE: SPB) is a diversified company with a portfolio of trusted brands spanning home appliances, garden care, personal care, and pet care.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $2.85 billion in revenue over the past 12 months, Spectrum Brands carries some recognizable products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Spectrum Brands’s revenue declined by 3.2% per year over the last three years, a poor baseline for our analysis.

This quarter, Spectrum Brands missed Wall Street’s estimates and reported a rather uninspiring 10.2% year-on-year revenue decline, generating $699.6 million of revenue.

Looking ahead, sell-side analysts expect revenue to decline by 1.5% over the next 12 months. it’s tough to feel optimistic about a company facing demand difficulties.

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Organic Revenue Growth

When analyzing revenue growth, we care most about organic revenue growth. This metric captures a business’s performance excluding one-time events such as mergers, acquisitions, and divestitures as well as foreign currency fluctuations.

Spectrum Brands’s demand has been falling over the last eight quarters, and on average, its organic sales have declined by 1.4% year on year.

In the latest quarter, Spectrum Brands’s organic sales fell by 11.1% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track.

Key Takeaways from Spectrum Brands’s Q2 Results

It was good to see Spectrum Brands narrowly top analysts’ gross margin expectations this quarter. On the other hand, its revenue missed and its organic revenue fell short of Wall Street’s estimates. Overall, this was a mixed quarter. The stock traded up 10.3% to $58.37 immediately following the results.

So should you invest in Spectrum Brands right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.