Results Beat
The company has a good track record of beating analysts’ estimates, and the trend was maintained in the May quarter when adjusted profit topped expectations though it declined 20% from last year to $1.94 per share. The bottom line was negatively impacted by a 6.6% decrease in net sales to $474.7 million. Sales, however, came in above analysts’ forecast.
Both business segments, Home & Outdoor and Beauty & Wellness, contracted during the three-month period. On an unadjusted basis, net income was $22.6 million or $0.94 per share in Q1, compared to $24.6 million or $1.02 per share in the first quarter of 2023. Operating margin grew by 190 basis points to 8.6%.
Commenting on the results, the company’s CEO Julien Mininberg said at the earnings call, “On the structural side, the specific changes we announced in January are working. The new North American Regional Market Organization is expected to take our sales and shopper capabilities to new levels. In our business segments, our brand and category teams are now even more obsessed with delighting consumers. Similarly, in shared services, our global operations teams are implementing new standardized tools and fully owning our supply chain end-to-end. On the savings side, the set of workstreams we are executing under Pegasus, are nicely on track.”
Targets
Meanwhile, the management reaffirmed its full-year 2024 sales guidance in the range of $1.965 billion to $2.015 billion, and adjusted earnings per share forecast between $8.50 and $9.00. It sees full-year unadjusted profit to be in the $3.81-$4.67 per share range. The company continues to expect adjusted EBITDA growth of 3.2-6.3%, and free cash flow between $250 million and $270 million.
The stock closed Wednesday’s session higher, after registering one of the biggest single-day gains following the earnings announcement.