Battery and lighting company Energizer (NYSE:ENR) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 3% year on year to $663.3 million. It made a non-GAAP profit of $0.72 per share, improving from its profit of $0.64 per share in the same quarter last year.
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Energizer (ENR) Q1 CY2024 Highlights:
- Revenue: $663.3 million vs analyst estimates of $664 million (small miss)
- EPS (non-GAAP): $0.72 vs analyst estimates of $0.67 (7.1% beat)
- EPS (non-GAAP) Guidance for Q2 CY2024 is $0.65 at the midpoint, below analyst estimates of $0.71
- Gross Margin (GAAP): 38.2%, in line with the same quarter last year
- Free Cash Flow of $10.3 million, down 93.3% from the previous quarter
- Organic Revenue was down 2.7% year on year
- Market Capitalization: $2.11 billion
Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE:ENR) is one of the world's largest manufacturers of batteries.
Household ProductsHousehold products stocks are generally stable investments, as many of the industry's products are essential for a comfortable and functional living space. Recently, there's been a growing emphasis on eco-friendly and sustainable offerings, reflecting the evolving consumer preferences for environmentally conscious options. These trends can be double-edged swords that benefit companies who innovate quickly to take advantage of them and hurt companies that don't invest enough to meet consumers where they want to be with regards to trends.
Sales GrowthEnergizer carries some recognizable brands and 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. On the other hand, Energizer can still achieve high growth rates because its revenue base is not yet monstrous.
As you can see below, the company's revenue was flat over the last three years. This is poor for a consumer staples business.
This quarter, Energizer missed Wall Street's estimates and reported a rather uninspiring 3% year-on-year revenue decline, generating $663.3 million in revenue. Looking ahead, Wall Street expects sales to grow 1.7% over the next 12 months, an acceleration from this quarter.
Organic Revenue GrowthWhen analyzing revenue growth, we care most about organic revenue growth. This metric captures a business's performance excluding the impacts of foreign currency fluctuations and one-time events such as mergers, acquisitions, and divestitures.
The demand for Energizer's products has barely risen over the last eight quarters. On average, the company's organic sales have been flat.
In the latest quarter, Energizer's organic sales fell 2.7% year on year. This decline was a reversal from the 2.6% year-on-year increase it posted 12 months ago. We'll be keeping a close eye on the company to see if this turns into a longer-term trend.
Key Takeaways from Energizer's Q1 ResultsIt was encouraging to see Energizer slightly top analysts' EPS expectations this quarter. On the other hand, its organic revenue unfortunately missed analysts' expectations and its gross margin missed Wall Street's estimates. Overall, the results could have been better. The stock is flat after reporting and currently trades at $29.45 per share.
