ACCO Brands Corporation Q2 FY2025 earnings call

• Realized $8 million in cost savings in the quarter, cumulative program total over $40 million. - Proactive China plus one approach positioned well for trade landscape, announced 2 price increases, secured better terms with manufacturing partners, accelerated production shifts. - Revenue growth initiatives: improved innovation pipeline in computer accessories, expanded into higher-growth categories in Europe (repeat tools into work lights, ergonomics portfolio expansion), Buro Seating acquisition integrated. - Leadership changes: Jed Peters and Rubens Passos assumed North America and Latin America leadership, A.J. Spijkervet to lead International segment in 2026.

Consolidated second quarter comparable sales were down 10.5% and within guidance. Americas segment: sales disrupted due to US tariffs, gaming accessories grew modestly, back-to-school down; Latin America sales weaker than expected but trends improving in June. International segment: sales declined but improved vs first quarter, gaming accessories grew mid-single digits due to Nintendo Switch 2 launch, office products soft in some European markets but maintained/grew share in most categories.

• Third quarter: expected reported sales down 5% to 8%, FX positive impact from weakening dollar, adjusted EPS $0.21 to $0.24. - Full year: reported sales down 7% to 8.5%, adjusted EPS $0.83 to $0.90, adjusted free cash flow ~$100 million, leverage ratio 3.8x to 3.9x at year-end.

• Uncertainty in tariff environment impacting demand. - Soft consumer and business demand. - Competition from low-priced products entering Latin America from China.

Q: PowerA impact from Switch 2 launch?

A: Pleased with partnership, Switch 2 accessory sales modest in second quarter, strong demand expected in holiday season (Q4).

Q: $100 million cost reduction program progress and second half outlook?

A: $40 million cumulative, ~$16 million in first half, likely more in second half due to later impact of actions.

Q: Asset sale details?

A: Majority was New York location closure and sale as part of footprint rationalization.

Q: Brazilian tax release cash impact?

A: $20 million liability, will pay $7 million out over next year, $13 million accounting adjustment.

Q: Consumer shelf price impact of blended pricing?

A: Hard to specify as pricing varies by product and on-hand inventory, passing on good increase to cover costs and maintain margin.

Q: U.S. customers shelf space allocation for back-to-school?

A: Listings pretty constant to prior year, retailers conservative with inventory due to uncertainties.

Q: Gaming accessories incremental sales magnitude?

A: Premature to give specific dollar amount, strong reception but early days