Spectrum Brands NYSE: SPB reported third-quarter fiscal 2026 sales growth across all three of its business units, led by a record quarter in Home & Garden, while raising its outlook for adjusted EBITDA growth excluding tariff refunds.
Net sales rose 7.7% from a year earlier, or 6.6% organically excluding $7.5 million of favorable foreign exchange. Chairman and Chief Executive Officer David Maura said the company’s Global Pet Care, Home & Garden and Home & Personal Care businesses each generated growth during the quarter.
“Our quarterly results once again outperformed expectations on both the top and the bottom lines,” Maura said, adding that the company had returned to organic growth on a year-to-date basis despite geopolitical uncertainty, changing trade conditions and uneven consumer demand in some categories.
Tariff Refunds Lift Reported Results
Third-quarter gross profit increased $106.3 million and gross margin rose 11.4 percentage points to 49.2%, including a one-time $60.6 million tariff refund. Excluding the refund, gross profit increased $45.7 million and gross margin was 41.1%, up 330 basis points from the prior year.
Chief Financial Officer Faisal Qadir said the underlying margin improvement reflected higher volume, pricing, lower trade spending, favorable product mix and cost-improvement actions, partly offset by higher tariff costs.
Adjusted EBITDA totaled $158.3 million, up $81.7 million year over year. Excluding tariff refunds, adjusted EBITDA was $97.7 million, an increase of $21.1 million, or 27.5%. Adjusted diluted earnings per share reached $2.79, including a $1.90-per-share benefit from tariff refunds. Excluding that benefit, adjusted EPS was $0.89.
Operating expenses increased 52.3% to $354.5 million, including an impairment charge related to the Home & Personal Care business and the company’s recent transaction with Oaktree. Excluding the impairment, operating expenses rose $25.5 million, or 11.3%, primarily due to increased investment spending.
Maura characterized the refunds as a recovery of prior costs rather than a windfall. He said the company had previously cut investments and reduced its workforce while addressing tariff-related inflation, and it intends to use recovered funds to support commercial activity and rehiring.
The company recognized receivables for the refunds during the quarter. Maura said Spectrum Brands had collected substantially all phase-one refunds and filed more than 95% of phase-two claims. Qadir said about half of the total expected cash refund had been received as of the call, with most of the balance expected during the fiscal year and all cash expected by the end of the calendar year.
Home & Garden Delivers Record Sales
Home & Garden reported net sales of $225 million, up 19% from the prior year and above the demand levels the company experienced during the COVID-19 pandemic, according to management. The growth included double-digit gains across pest-control and herbicide categories.
Favorable weather in April helped drive retail point-of-sale activity and replenishment orders, although severe weather and excessive heat in May created later-quarter pressure. Brands including Spectracide, Hot Shot and Repel outperformed their markets, Qadir said.
Excluding tariff refunds, Home & Garden adjusted EBITDA rose $9.8 million to $48.4 million. Its adjusted EBITDA margin expanded 110 basis points to 21.5%, supported by higher volume and productivity gains, partly offset by higher trade spending and inflation.
The company expects unfavorable weather and elevated retail inventories to constrain fourth-quarter replenishment orders. Management said it still expects Home & Garden to produce sales growth and modest EBITDA-margin expansion for fiscal 2026.
Pet Care Gains Share, Faces Tougher Comparison
Global Pet Care sales increased 3.3%, or 2.9% organically excluding foreign exchange. North American sales grew in the high single digits, led by companion-animal products, while European, Middle East and Africa organic sales declined in the mid-single digits because of roughly $6 million in orders that had been accelerated into the preceding quarter ahead of an SAP S/4HANA system launch.
Management said that excluding the timing effect, underlying performance in companion animal and aquatics was strong. Good Boy gained distribution in Continental Europe and expanded its market leadership in the United Kingdom, while the aquatics business gained share in a declining category.
Global Pet Care adjusted EBITDA, excluding tariff refunds, increased $7.9 million to $51.9 million, with margin expanding 250 basis points to 19.7%. The company cited pricing, favorable mix and cost actions, partly offset by tariffs and investment spending.
Spectrum Brands expects Global Pet Care to grow for the full fiscal year, but expects fourth-quarter sales to decline from a year earlier because of tougher comparisons tied to previously delayed shipments and retailer timing related to a refreshed Eukanuba portfolio.
Home & Personal Care Shows Mixed Trends
Home & Personal Care reported sales growth of 3.6%, or 1.1% organically excluding foreign exchange. Personal care sales rose in the mid-teens, while home-appliance sales declined in the mid-single digits.
In North America, home-appliance sales fell amid softness in certain brands and the exit of the U.S. direct-response television business. Black & Decker performed well in coffee makers and fabric care, while Remington gained share in curling irons as the haircare category showed sequential improvement.
In Latin America, organic sales increased in the high single digits, driven by personal-care product launches and Black & Decker appliance volume in Colombia and Mexico. The company also launched a U.S. TikTok Shop for Remington and reactivated a retail partnership in Australia for Russell Hobbs and Remington.
Home & Personal Care adjusted EBITDA, excluding tariff refunds, rose $7.4 million to $14.4 million. Margin expanded 270 basis points to 5.4%, aided by pricing, cost actions and favorable foreign exchange. The company expects full-year EBITDA growth in the segment despite an anticipated full-year sales decline.
Updated Outlook and Balance Sheet
Spectrum Brands maintained its fiscal 2026 forecast for net sales to be flat to up low single digits from the prior year. Growth in Global Pet Care and Home & Garden is expected to more than offset declining sales in Home & Personal Care.
The company raised its adjusted EBITDA outlook, excluding tariff refunds, and now expects mid-single-digit growth for the fiscal year. It continues to expect adjusted free cash flow, excluding tariff refunds, to equal approximately 50% of adjusted EBITDA.
Spectrum Brands ended the quarter with $258.9 million in cash, $494.8 million available under its $500 million revolver and approximately $374.1 million in net debt. Maura said the company repurchased about 200,000 shares for roughly $15.8 million during the quarter and had more than $300 million remaining under its board authorization.
The company also completed the North American SAP S/4HANA deployment for Home & Personal Care and finalized implementation across remaining Global Pet Care and Home & Garden entities. Only the Home & Personal Care EMEIA deployment remains, which management expects to complete later this year.
About Spectrum Brands (NYSE:SPB)
Spectrum Brands Holdings, Inc is a global consumer products company that develops and markets a diverse portfolio of branded household and personal care products. Organized into four principal business segments—Hardware & Home Improvement, Home & Garden, Pet, and Appliances & Personal Care—the company offers a broad range of items including security and plumbing solutions, small electric appliances, grooming tools, and pet care accessories. Its hardware division features well-known brands such as Kwikset, Baldwin and Pfister, while the home appliance segment is anchored by names like Russell Hobbs and Remington.
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