Battery and lighting company Energizer (NYSE: ENR) missed Wall Street’s revenue expectations in Q1 CY2025, with sales flat year on year at $662.9 million. Next quarter’s revenue guidance of $694.4 million underwhelmed, coming in 1.2% below analysts’ estimates. Its non-GAAP profit of $0.67 per share was in line with analysts’ consensus estimates.
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Energizer (ENR) Q1 CY2025 Highlights:
- Revenue: $662.9 million vs analyst estimates of $669.7 million (flat year on year, 1% miss)
- Adjusted EPS: $0.67 vs analyst estimates of $0.68 (in line)
- Adjusted EBITDA: $140.3 million vs analyst estimates of $137.5 million (21.2% margin, 2.1% beat)
- Revenue Guidance for Q2 CY2025 is $694.4 million at the midpoint, below analyst estimates of $702.9 million
- Management lowered its full-year Adjusted EPS guidance to $3.40 at the midpoint, a 4.2% decrease
- EBITDA guidance for the full year is $620 million at the midpoint, below analyst estimates of $632 million
- Operating Margin: 12%, down from 13.1% in the same quarter last year
- Free Cash Flow was -$33.8 million, down from $10.3 million in the same quarter last year
- Organic Revenue rose 1.4% year on year (-2.7% in the same quarter last year)
- Market Capitalization: $1.72 billion
StockStory’s Take
Energizer’s first quarter results reflected steady operational execution but were shaped by a more uncertain macro environment. On the call, management attributed organic sales growth to strong battery performance and the launch of new Auto Care products, noting that investments in supply chain resilience and in-region manufacturing helped offset external pressures. CEO Mark LaVigne pointed to the success of the Podium Series in Auto Care and highlighted distribution gains across both brick-and-mortar and digital channels as supporting factors in the quarter.
Looking ahead, Energizer’s leadership expressed caution regarding evolving tariff policies and shifting consumer sentiment. CFO John Drabik explained that new tariffs could represent a significant headwind, but management outlined plans to mitigate these impacts through sourcing changes and pricing actions over the next twelve months. The company’s revised outlook incorporates both anticipated tariff effects and consumers’ growing focus on value, with management stating that trends in device and battery demand will be closely monitored throughout the year.
Key Insights from Management’s Remarks
Management’s remarks focused on the interplay between category performance, supply chain strategy, and the impact of external headwinds. The company’s response to tariffs and its evolving manufacturing network featured prominently, alongside granular detail on consumer trends and the rollout of new products.
- Battery Category Momentum: Organic battery sales grew, driven by distribution expansion in the U.S. and international markets, with management citing strong shelf presence and digital commerce as key contributors.
- Auto Care Product Launches: The Podium Series launch in Auto Care was highlighted as a catalyst for growth, now available in over 15,000 stores. Management expects this product line to contribute further during the peak summer season.
- Tariff Mitigation Strategy: Energizer described its multi-pronged approach to mitigating the impact of new tariffs, including shifting sourcing away from China, leveraging internal production, and enacting targeted price increases. Management believes these initiatives will substantially reduce tariff exposure over the next year.
- Consumer Behavior Shifts: Leadership noted a recent uptick in consumer caution and value-seeking behavior, which is influencing near-term demand in both batteries and Auto Care segments. The company is adjusting promotional tactics and product offerings to address these changes.
- APS Acquisition for European Expansion: The recent acquisition of a manufacturing plant in Poland (APS) was cited as a strategic move to deepen the company’s in-region-for-region production model and facilitate the ongoing transition from Panasonic to Energizer-branded products in Europe.
Drivers of Future Performance
Management’s outlook for the coming quarters is shaped by a combination of tariff-related cost pressures, evolving consumer preferences, and the company’s ongoing supply chain transformation.
- Tariff Exposure and Mitigation: The company faces incremental costs from announced tariffs, but management expects to offset a majority of this impact through alternative sourcing, network rebalancing, and further price adjustments by the end of next year.
- Value-Focused Consumer Trends: The shift toward more value-conscious purchasing is expected to persist, with management planning to emphasize value-oriented brands and pack sizes to capture demand across price tiers.
- Integration of APS Acquisition: The success of the APS manufacturing integration and the transition of Panasonic’s European business to Energizer-branded products will be a key factor in driving regional growth and operational efficiency.
Top Analyst Questions
- Peter Grom (UBS): Asked for clarification on the timeline and effectiveness of tariff mitigation efforts; management detailed that most tariff impacts would be offset over twelve months through sourcing and pricing strategies.
- Bill Chappell (Truist Securities): Inquired about the impact of rising device prices on battery demand; management acknowledged these headwinds are factored into their lower top-line outlook and expect consumer pullback to persist.
- Lauren Lieberman (Barclays): Questioned whether retailer destocking contributed to guidance changes; CEO Mark LaVigne confirmed minor inventory buildup at retailers and that this was incorporated into forecasts for the rest of the year.
- Unidentified Analyst (Energizer): Probed competitive dynamics given varying tariff exposures; management indicated no clear advantage versus main competitors but sees potential to use value brands to partner with retailers affected by private label supply challenges.
- Andrea Teixeira (JPMorgan): Sought color on consumer behavior by price tier and promotional activity; management stated that promotional investments were stable and that the company’s product assortment allows it to adapt to value-seeking consumers.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace and effectiveness of Energizer’s tariff mitigation actions and sourcing shifts, (2) signs of stabilization or improvement in consumer demand and retailer inventory levels, and (3) the integration progress and early impact of the APS acquisition on European operations. Execution against cost control and supply chain initiatives will also be important for margin preservation.
Energizer currently trades at a forward P/E ratio of 6.5×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our free research report.
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