Spectrum Brands Trades Near 52-Week Low: Buy, Hold or Sell Stock?

Spectrum Brands Holdings Inc. SPB has seen its shares dive 17.1% in the past three months compared with the industry’s decline of 6.9%. The company has also underperformed the broader Zacks Consumer Discretionary sector’s rise of 3.6% and the S&P 500’s dip of 3.8%. Closing the trading session at $69.81 yesterday, the stock hovers close to its 52-week low of $68.74 reached on March 21.SPB Stock's Price Performance Image Source: Zacks Investment Research This significant decline in Spectrum Brands’ stock price can be attributed to several factors that have weighed on its performance.Factors Affecting SPB’s PerformanceSpectrum Brands is spending a lot of money to grow its business by improving its brands, online sales and supply chain. While this will help in the long run, it is putting pressure on the company’s finances right now. Because of this spending, Spectrum may have less money to buy other businesses or reward shareholders.The company is also facing higher costs due to new trade tariffs, especially on products in its Home & Personal Care (HPC) segment. Since many of its products come from China, these tariffs could hurt profits until SPB finds ways to cut costs. It is trying to move production to other places, while this will take time and could cause short-term problems.Spectrum is also trying to restructure its HPC business by selling some of its parts. However, if the deal takes longer than expected or doesn’t go as planned, the company might not get as much money as it hoped. This could slow down other investments.Another problem is that the U.S. dollar is very strong compared to other currencies, especially in Europe. This makes it harder for Spectrum to make money from its international sales. Even though the company has ways to reduce the impact, changes in currency value could still hurt its profits.Can Growth Strategies Turn the Tide for SPB?Despite challenges, Spectrum Brands’ growth initiatives are expected to help turn its stock performance around. A key driver is strong e-commerce momentum, which remained solid in the first quarter of fiscal 2025. Online sales outperformed in-store sales, contributing more than 30% of global HPC revenues and around the mid-20% range for Global Pet Care (GPC). To sustain this growth, the company is expanding inventory, improving fill rates, and launching new products across both online and retail channels. Management is confident that e-commerce will continue to grow and expects strong sales trends to persist throughout the year.Spectrum Brands has been benefiting from higher prices, cost improvements and a better product mix, which helped drive profit margins in the first quarter of fiscal 2025. The company has taken proactive steps to cut costs, including reducing fixed expenses by permanently eliminating salaried positions and lowering advertising and promotional spending. Additionally, it is focused on cost-saving initiatives and managing the impact of new U.S. tariffs on Chinese imports while maintaining a disciplined cost structure.These efforts contributed to a strong financial performance in the first quarter. Gross profit increased by 5.3% year over year, supported by higher sales, cost-saving measures and favorable foreign currency effects. The company’s gross margin expanded by 140 basis points (bps) to 36.8%, reflecting improved profitability.Looking ahead to fiscal 2025, Spectrum Brands expects a small increase in net sales and a mid-to-high single-digit rise in adjusted EBITDA, driven by higher sales and continued cost improvements. Despite economic challenges, the company remains committed to brand investment, cost efficiency, and e-commerce expansion to support profitability in the coming year.Final Words on SPB StockSpectrum Brands is facing short-term challenges from rising costs, tariffs and financial pressures due to its significant investments in brand-building and e-commerce. These factors have weighed on the stock’s performance, which has lagged behind the industry and is currently trading near its 52-week low, reflecting ongoing weakness.Despite these headwinds, the company’s strong e-commerce growth, cost-saving efforts and pricing strategies have helped expand profit margins. Management remains optimistic, expecting modest sales and EBITDA growth in fiscal 2025 as these initiatives continue to take effect. Given the current outlook, existing investors may consider holding their positions in SPB stock, while potential investors might wait for a better entry point. Spectrum Brands currently carries a Zacks Rank #3 (Hold), indicating a balanced risk-reward scenario.Don’t Miss These Solid BetsCentral Garden & Pet CENT, one of the leading companies in the U.S. pet supplies and lawn and garden supplies space, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Central Garden has a trailing four-quarter earnings surprise of 208.7%, on average. The Zacks Consensus Estimate for CENT’s fiscal 2025 sales and EPS indicates increases of 1% and 10.8%, respectively, from the year-ago period’s reported levels.V.F. Corporation VFC engages in the design, procurement, marketing and distribution of branded lifestyle apparel, footwear and accessories for men, women and children in the Americas, Europe and the Asia-Pacific. It carries a Zacks Rank #2 (Buy) at present. VFC delivered an earnings surprise of 82.4% in the last reported quarter.The consensus estimate for V.F. Corp’s current-quarter EPS indicates growth of 53.1% from the year-ago levels.Hanesbrands Inc. HBI designs, manufactures, sources and sells a range of innerwear apparel for men, women and children in the Americas, Europe, the Asia Pacific and internationally. It currently has a Zacks Rank #2. HBI delivered a trailing four-quarter average earnings surprise of 43.6%.The Zacks Consensus Estimate for Hanesbrands’ current fiscal-year earnings indicates growth of 32.5% from the previous year’s reported figure.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report V.F. Corporation (VFC): Free Stock Analysis Report Hanesbrands Inc. (HBI): Free Stock Analysis Report Central Garden & Pet Company (CENT): Free Stock Analysis Report Spectrum Brands Holdings Inc. (SPB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks