Shares of household products company Spectrum Brands (NYSE:SPB) fell 7.9% in the morning session after the company reported third quarter results and provided revenue guidance for the next year, which missed Wall Street's expectations. Revenue was narrowly above expectations during the quarter and declined in absolute terms, driven by "slower category POS and planned exit of Non-strategic categories." The company also provided weak guidance on the near-term demand environment, adding, "We believe the overall macro-economic environment will continue to deteriorate and result in top-line pressure, particularly in our Home and Personal Care business." On the other hand, Spectrum Brands blew past analysts' Adjusted EBITDA and EPS expectations this quarter. That stood out as a positive in these results. Overall, this was a weaker quarter for Spectrum Brands, with an underwhelming near-term sales outlook.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Spectrum Brands? Access our full analysis report here, it's free.
What is the market telling us:
Spectrum Brands's shares are somewhat volatile and over the last year have had 6 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Spectrum Brands is up 11.5% since the beginning of the year, but at $69.04 per share it is still trading 17.6% below its 52-week high of $83.79 from August 2023. Investors who bought $1,000 worth of Spectrum Brands's shares 5 years ago would now be looking at an investment worth $1,437.
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