Spectrum Brands Holdings, Inc. Q2 FY2026 earnings call

1. Operating environment: Discussed current operating environment, including global macroeconomic conditions, geopolitical tensions, and inflationary cost pressures. 2. Operating performance: Second quarter net sales increased 4.9% and adjusted EBITDA grew 17.8%. 3. Strategic initiatives: Entered into an agreement with Oak Tree Capital Management for a strategic partnership in HPC business. Outlined strategic priorities for fiscal 26 including financial stewardship, operational excellence, investing in people, and strategic transformations. 4. Business unit insights: Global pet care had strong performance with key brands gaining market share; home and garden benefited from favorable weather and brand share gains; home and personal care faced soft demand but had some bright spots like DTC growth in EMEA

Global Pet Care: Reported net sales increased 11.2%, organic net sales increased 7.6%. Adjusted EBITDA was $56.8 million, $6.8 million higher than previous year, margin 19% vs 18.6% last year. Home and Garden: Net sales increased 11.3%. Adjusted EBITDA was $34.8 million, compared to $26.7 million last year, margin 20.5% vs 17.5% prior year. Home and Personal Care: Reported net sales decreased 5.5%, organic net sales decreased 10.7%. Adjusted EBITDA was $8.1 million, compared to $7.3 million in the prior year, margin 3.4% vs 2.9% last year

1. Expect net sales to be flat to low single digits compared to prior year, with growth in global pet care and home and garden, and decline in home and personal care. 2. Adjusted EBITDA now expected to grow low to mid single digits, driven by sales growth in global pet care and home and garden, expense management, etc. 3. Adjusted free cash flow expected to be around 50% of adjusted EBITDA. 4. Depreciation and amortization expected to be between $115 and $125 million including stock-based compensation of approx $20 to $25 million. 5. Cash payments towards restructuring, optimization, and strategic transaction costs expected to be between $25 and $35 million. 6. Capital expenditure expected to be between $50 million and $60 million. 7. Cash taxes expected to be between $40 and $50 million, excluding impact of HPC strategic partnership

1. Forward-looking statements are uncertain, actual results may differ materially. 2. Geopolitical tensions such as Middle East conflict can increase global fuel prices and cause volatility in U.S. trade policy. 3. Inflationary cost pressures, particularly in commodities and freight spend. 4. Consumer softness in home and personal care business in North America and Europe. 5. Uncertainty in weather affecting home and garden business

Q: Talk about fastest-growing brands in pet and H&G and replication across portfolio.

A: Fastest-growing brands in pet like DreamBone with type 2 collagen, in H&G like wasp and hornet trap. Focus on innovation, consumer insights, price pack architecture.

Q: How HPC international business is doing and impacts from tariffs and Middle East conflict.

A: Europe impacted by consumer softness and high inventory with key customers; LATAM doing well. Tariffs and Middle East conflict affecting international business.

Q: Outlook for sales growth sustainability and factors like destocking or tax refunds.

A: Sales growth due to better product, marketing, market share gain; some pull-in in pet but main growth from fundamental business improvement.

Q: Thought process on HPC partnership and assessment of alternatives.

A: Shareholders prefer separation, looked at various options, Oak Tree chosen for strategic investment.

Q: Garden season start and pet industry outlook.

A: Garden season April off to good start, retail inventory lower than last year; pet industry recovering with new products and brand growth.

Q: Sales growth sustainability and factors like pull-in, etc.

A: Pull-in in pet was minor, main growth from brand improvement and market share gain; cautious on overall environment