ACCO Brands Corporation Q4 FY2025 earnings call

Tom Tefford mentioned that the company refined strategy to focus on growing technology peripherals market, acquisition of ePost broadens technology peripherals portfolio to ~25% of projected revenues, expects $15M annual cost synergies from acquisition, team responded quickly to U.S. tariffs with China plus one strategy, implemented multi-year cost reduction program delivering $35M savings in 2025 with $100M goal by end 2026, Americas segment revenue trends improved in Q4 led by technology accessories, PowerA and Kensington performed well, international segment faced challenges in EMEA but had growth in Australia, 2026 expected to benefit from ePost acquisition, improved demand, favorable FX, and pipeline of new products from Kensington

In the Americas segment, comparable sales declined 5% in the fourth quarter, with growth in technology accessories and planning products offset by lower demand for core products and unfavorable mix of lower price product in Brazil. The Americas adjusted operating income was $43 million, up modestly with a margin rate improving to 17.7%. In the international segment, comparable sales declined 12% in the fourth quarter, impacted by soft demand in Europe and difficult Q4 2024 comparison, with decline in Europe partially offset by growth in Australia. International adjusted operating income was $26 million with a margin rate of 14.1%

For 2026, expected full year sales growth due to ePost acquisition, improved demand, and favorable FX, reported sales flat to up 3%, adjusted EPS 84-89 cents, free cash flow $75-85M, consolidated leverage ratio 3.7-3.9 times. First quarter expected sales flat to up 3%, adjusted loss per share 6 cents to 3 cents

External challenges persist, including global macroeconomic factors, tariff-related disruptions, and volatility in markets; also, uncertainties in foreign exchange and demand fluctuations

Q: Get more color on the EPOS acquisition, addressable market, margins.

A: Addressable market ~$1.7B, EPOS has ~5% market share, business was disrupted but anticipated to grow; Q: Color on back to school market inventory positions.

A: Normal ordering pattern expected, early order book strong; Q: Revenue synergy potential with EPOS.

A: Complementary to Kensington, opportunity to expand selling organization and product portfolio; Q: Revenue guidance breakdown by segment.

A: Americas expected down low single digits, international up mid single digits in full year; Q: EPOS revenue in 2026, seasonality.

A: EPOS to contribute ~$80M in 2026, monthly splits consistent; Q: FX benefit in 2026.

A: ~1.5% benefit; Q: Gross margin and SG&A trends in 2026.

A: Anticipate gross margin expansion due to footprint optimization and price increases, SG&A to increase modestly with incentives but focus on cost discipline; Q: Price increases related to tariffs.

A: Mid single digits price increases in U.S. to be implemented in April, monitoring mix and need for further adjustment