Spectrum Brands Holdings, Inc.

Third quarter net sales increased 7.7% year over year, or 6.6% organically excluding $7.5 million of favorable FX. Gross profit increased $106.3 million and gross margin improved to 49.2% from the prior year, or 41.1% excluding a one-time $60.6 million tariff refund benefit, up 330 basis points. Operating income was $15.9 million, down $15.4 million year over year. Adjusted EBITDA was $158.3 million, up $81.7 million; excluding tariff refunds, adjusted EBITDA was $97.7 million, up $21.1 million or 27.5%. Adjusted diluted EPS was $2.79, including a $1.90 per share tariff refund benefit; excluding that benefit, adjusted EPS was $0.89. For fiscal 2026, management continues to expect net sales to be flat to up low single digits, and now expects adjusted EBITDA to grow mid-single digits excluding tariff refunds. It also reiterated adjusted free cash flow of about 50% of adjusted EBITDA, $115 million to $125 million of depreciation and amortization, $50 million to $60 million of capex, and $40 million to $50 million of cash taxes.

David Maura framed the quarter as validation of the company’s strategy, citing stronger operations, a healthier balance sheet, and improving commercial execution. He emphasized that Spectrum is now shifting from repair mode to offense, with a focus on innovation, better storytelling, more digital engagement, and selective M&A, especially around Global Pet Care and Home & Garden. His tone was confident and constructive, but he also acknowledged Q4 headwinds from tougher comparisons, weather, and ongoing consumer/inflation pressures.

Faisal Qadir highlighted the financial upside from pricing, volume, mix, and cost actions, while separating out the tariff-refund benefit. He noted gross margin of 41.1% excluding the refund, adjusted EBITDA of $97.7 million excluding refunds, and adjusted EBITDA margin expansion in all three businesses; he also cited quarter-end cash of $258.9 million, $494.8 million available on the revolver, and total debt of about $633 million. On capital allocation and liquidity, he reiterated strong cash generation, modest capex of $9.8 million in the quarter, and full-year expectations for $50 million to $60 million of capex and roughly 50% conversion of adjusted EBITDA into adjusted free cash flow.

Analysts pressed on price/mix versus volume, innovation vitality, tariff refunds, Pet channel trends, Home & Garden inventory and weather risk, and the HPC strategic path with Oaktree. Management said pricing was positive in all three businesses, that GPC and H&G should finish the year with positive volume and pricing growth, and that some of H&G’s innovation is now scaling via broader distribution. On refunds, management said they are recovering prior tariff losses rather than a windfall, with Phase 1 fully received and Phase 2 beginning, and expects most cash in the fiscal year and all cash by calendar year-end. On HPC, David Maura said there are no milestones to clear and that the company is wide open on options, with Oaktree giving it the ability to pivot toward growth and potential M&A.