Spectrum Brands Holdings (NYSE: SPB) reported fiscal third-quarter 2026 net sales of $753.3 million, up 7.7% from $699.6 million, while diluted EPS from continuing operations fell to a loss of $1.11 from earnings of $0.83. Adjusted EBITDA more than doubled to $158.3 million, although $60.6 million came from one-time tariff refunds; excluding that benefit, adjusted EBITDA increased 27.5% to $97.7 million.
Core earnings data
For the quarter ended June 28, 2026, organic net sales rose 6.6% after excluding $7.5 million of favorable foreign-exchange effects. All three operating segments increased sales, with Home & Garden providing the largest contribution.
GAAP profitability moved in the opposite direction: operating income declined as higher operating expenses outweighed gross-profit growth, and the company swung to a net loss because of lower operating income and higher income-tax expense. Results also included a one-time, noncash impairment charge related to the Home & Personal Care business and the recent Oaktree investment, though the charge amount was not specified.
| Metric | Fiscal Q3 2026 | Fiscal Q3 2025 | Year-over-year change |
|---|---|---|---|
| Net sales | $753.3 million | $699.6 million | +7.7% |
| Gross profit | $370.4 million | $264.1 million | +40.2% |
| Gross margin | 49.2% | 37.8% | +1,140 bps |
| Operating income | $15.9 million | $31.3 million | -49.2% |
| Net income (loss) from continuing operations | $(20.3) million | $20.5 million | Loss versus profit |
| Diluted EPS from continuing operations | $(1.11) | $0.83 | Loss versus profit |
| Adjusted EBITDA | $158.3 million | $76.6 million | +106.7% |
| Adjusted EBITDA excluding tariff refunds | $97.7 million | $76.6 million | +27.5% |
| Adjusted diluted EPS | $2.79 | $1.24 | +125.0% |
| Adjusted diluted EPS excluding tariff refunds | $0.89 | $1.24 | Approx. -28.2% |
Business and segment performance
Home & Garden was the main growth engine, with sales rising 19.0% following favorable April weather, stronger point-of-sale demand and retailer replenishment. Global Pet Care and Home & Personal Care also grew, but their underlying business trends were more mixed.
The table uses adjusted EBITDA excluding tariff refunds to provide a clearer view of segment operating performance.
| Segment | Net sales | Sales growth | Adjusted EBITDA excluding refunds | Margin excluding refunds |
|---|---|---|---|---|
| Global Pet Care | $263.7 million | +3.3% | $51.9 million, up $7.9 million | 19.7% |
| Home & Garden | $225.2 million | +19.0% | $48.4 million, up $9.8 million | 21.5% |
| Home & Personal Care | $264.4 million | +3.6% | $14.4 million, up $7.4 million | 5.4% |
Global Pet Care organic sales increased 2.9%. Companion Animal sales rose by a mid-single-digit percentage, supported by modest category growth and market-share gains in North America, while Aquatics declined by a mid-single-digit percentage. EMEA sales were affected by retailers accelerating orders into the second quarter ahead of an SAP S/4HANA implementation.
Home & Garden organic sales increased 19.1%. Excluding refunds, higher volume and productivity improvements lifted adjusted EBITDA, partially offset by increased trade spending and inflation.
Home & Personal Care organic sales rose only 1.1%, well below its 3.6% reported growth because of favorable currency movements. Personal Care sales increased by a mid-teens percentage, but Home Appliances declined by a mid-single-digit percentage. North American sales also fell by a mid-single-digit percentage amid appliance weakness, selected brand softness and the exit from the direct-response television business. Pricing and cost improvements supported profit, while lower volume and tariff costs remained offsets.
Profitability, liquidity and the balance sheet
The reported gross-margin expansion was heavily influenced by the tariff refund, but underlying profitability also improved. Excluding $60.6 million of refunds, gross profit increased by $45.7 million and gross margin expanded by 330 basis points. Adjusted EBITDA margin excluding refunds improved by 200 basis points as stronger volume and gross margins more than offset higher investment spending.
Spectrum Brands ended the quarter with $258.9 million in cash and $753.7 million of total liquidity, including $494.8 million of undrawn revolver capacity. Total debt was $633.0 million, with no revolver borrowings, resulting in net debt of $374.1 million. Net debt leverage stood at 1.02 times adjusted EBITDA, below the company’s long-term target range of 2.0 to 2.5 times.
Tariff refunds inflated headline earnings, but underlying EBITDA still grew
The $60.6 million tariff refund created a significant gap between reported and underlying results. Reported adjusted EBITDA increased 106.7%, compared with 27.5% growth after removing the refund, while the reported adjusted EBITDA margin expanded 1,010 basis points versus a 200-basis-point underlying improvement.
The effect was even more pronounced in per-share earnings. Tariff refunds contributed $1.90 to adjusted diluted EPS after tax, accounting for most of the reported $2.79. Excluding the refund, adjusted EPS was $0.89, down from $1.24 a year earlier despite higher underlying adjusted EBITDA. Investors therefore need to separate the genuine improvement in sales, mix and productivity from the nonrecurring refund benefit.
Fiscal 2026 guidance
Citing strong year-to-date performance and continued operating momentum, Spectrum Brands raised its adjusted EBITDA framework while retaining its sales and cash-conversion expectations. Both the adjusted EBITDA and adjusted free-cash-flow frameworks exclude tariff refunds.
| Metric | Latest fiscal 2026 framework | Change |
|---|---|---|
| Reported net sales | Flat to low-single-digit growth | Maintained |
| Adjusted EBITDA excluding tariff refunds | Mid-single-digit growth | Raised; exact previous rate not provided |
| Adjusted free-cash-flow conversion excluding refunds | Approximately 50% of adjusted EBITDA | Maintained |
Management perspective
Management attributed the quarter’s sales growth to underlying demand in Global Pet Care and Home & Garden, market-share gains among key brands and favorable weather for seasonal products. Home & Personal Care continued to face soft demand and greater competition, although management noted signs of stabilization in North America and continued strength in Latin America.
The company intends to reinvest the tariff refunds into its businesses. It also completed its first SAP S/4HANA deployment within Home & Personal Care and implementations across the remaining Global Pet Care and Home & Garden entities. The final HPC EMEA implementation is expected later in 2026, after which the company expects to operate on one unified ERP platform.
Recent insider transactions
The supplied transaction data lists one recent open-market purchase: CEO David M. Maura bought $182,125 of SPB shares in May 2026. The other listed transactions were zero-value stock awards rather than open-market purchases or sales.
| Date | Insider | Transaction | Price | Value |
|---|---|---|---|---|
| May 20, 2026 | David M. Maura, CEO | Purchase | $72.85 per share | $182,125 |
No conclusion about management’s outlook can be drawn from a single purchase alone.
Risks investors should monitor
- Tariff-related earnings volatility: The one-time refund materially lifted reported margins, adjusted EBITDA and adjusted EPS. At the same time, higher tariff costs offset part of the underlying gains across several segments.
- Home & Personal Care demand pressure: Soft North American demand, appliance weakness and increased competition continue to constrain organic growth and segment profitability.
- Weather dependence in Home & Garden: Favorable April weather supported point-of-sale demand and retailer replenishment, making the pace of growth sensitive to seasonal conditions that may not repeat.
- Operating expense and tax pressure: Higher operating expenses and income-tax expense contributed to the GAAP loss even as revenue and gross profit increased.
- ERP implementation and order timing: Previous implementation activity shifted some EMEA pet-care orders into the second quarter. The remaining HPC EMEA rollout creates another execution and customer-order timing consideration.
Summary
Spectrum Brands delivered broad-based sales growth in fiscal Q3 2026, led by Home & Garden, while pricing, mix and productivity supported a meaningful increase in underlying adjusted EBITDA. However, the tariff refund substantially amplified reported profitability, and GAAP results weakened because of higher operating expenses, taxes and an impairment charge. The main issues to follow are whether Home & Garden demand remains durable, whether Home & Personal Care stabilizes and whether the company can deliver its raised underlying EBITDA framework without the nonrecurring refund benefit.
Find out more
Comments