Energizer's Fiscal 2025: Project Momentum Extends Cost Savings, Steady Earnings Amid Market Headwinds
Project Momentum Surpasses $200 Million in Savings and Gets a Fourth Year Extension
Energizer Holdings, Inc. (NYSE: ENR) wrapped up its fiscal 2025 by extending its flagship cost-saving initiative, Project Momentum, for a fourth year after already exceeding $200 million in cumulative savings. The extension is aimed at ongoing tariff mitigation, boosting operational efficiency, and accelerating the integration of the recently acquired Advanced Power Solutions (APS) business.
CEO Mark LaVigne highlighted how the company's focus and agility allowed it to deliver solid results despite a volatile macro environment. "We adjusted quickly, found opportunities, and executed with discipline to deliver a strong year," LaVigne said, underscoring confidence in Energizer's ability to invest for future growth while protecting margins.
Revenue Grows Modestly on Acquisition and E-Commerce Gains, While Organic Sales Remain Mixed
Full-year net sales rose by 2.3%, reaching $2.95 billion, thanks primarily to $63.6 million in acquisition-related revenue and a modest 0.7% growth in organic net sales. Quarterly net sales for Q4 were $832.8 million, up 3.4%, again lifted by the APS acquisition even as organic sales dipped 2.2% on softer consumer demand in North America.
| Quarter/Fiscal Year | Net Sales (million) | % Change | Organic Change | Acquisition Impact |
|---|---|---|---|---|
| Q4 2025 | $832.8 | 3.4% | -2.2% | $42.8M (5.3%) |
| FY 2025 | $2,952.7 | 2.3% | 0.7% | $63.6M (2.2%) |
For the full year, e-commerce, new innovation in Auto Care, and international growth partially offset slower volume in traditional channels. Pricing gains (0.7% in Q4, -0.8% for the year) and continued distribution wins in batteries and lights also contributed, though Q4 was weighed by weaker category volumes and North American demand.
Margins Flat Year-Over-Year, But Tariff and Integration Costs Pressure Fourth Quarter
Gross margin for the full year on a reported basis improved to 41.7% from 38.3%. However, adjusted gross margin for Q4 slipped to 38.5% from 42.2% last year, reflecting increased production and distribution costs, higher tariffs, and the lower margin profile of the newly integrated APS business.
| Margin | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 |
|---|---|---|---|---|
| Gross Margin (Reported) | 36.6% | 38.1% | 41.7% | 38.3% |
| Gross Margin (Adjusted) | 38.5% | 42.2% | 40.9% | 40.9% |
Adjusted EBITDA climbed to $623.6 million for fiscal 2025 (up 1.8% currency neutral), while adjusted earnings per share rose 6% to $3.52. However, the company continues to see near-term pressure on margins, especially in Q1 of fiscal 2026 as tariff impacts and integration costs are expected to remain elevated.
Cost Controls and Capital Returns: Project Momentum, Buybacks, and Dividends Support Shareholder Value
Operational savings remained a bright spot, with Project Momentum generating roughly $50 million in annual cost reductions for fiscal 2025. Energizer also prioritized shareholder returns, repurchasing 4.0 million shares for $22.42 each (totaling $89.7 million), and paying $1.20 per share in dividends. Operating cash flow for the year was $147.1 million, with free cash flow at $63.2 million—reflecting the impact of strategic reinvestment and a production tax credit benefit of $120.9 million.
Outlook for Fiscal 2026: Near-Term Margin Pressure but Recovery Expected as Year Progresses
For fiscal 2026, Energizer expects organic sales to remain flat to slightly up, with adjusted EPS in the range of $3.30 to $3.60 and adjusted EBITDA between $580 million and $610 million. Management warned that the first quarter will be most impacted by tariffs and integration costs—projecting Q1 adjusted EPS of just $0.20 to $0.30—but expects double-digit adjusted earnings growth over the remaining quarters.
| Guidance Metric | Q1 2026 Outlook | FY 2026 Outlook |
|---|---|---|
| Adjusted EPS | $0.20–$0.30 | $3.30–$3.60 |
| Adjusted EBITDA | — | $580–$610 million |
| Organic Sales | Down high-single digits | Flat to slightly up |
The company will lean on additional production credits, accelerated integration of APS, and ongoing cost discipline to offset cost headwinds and rebuild margin momentum as 2026 advances.
Takeaway: Solid Foundation Amid Volatility, Focused on Long-Term Resilience
Energizer exits fiscal 2025 with stable top-line growth and improved cash flow discipline, albeit facing some pressure on margins in the near term due to tariffs and acquisition integration. With Project Momentum delivering above-target savings, ongoing buybacks and dividends, and the benefit of production tax credits, the company has built a solid foundation for recovery in the latter part of fiscal 2026.
Investors watching Energizer may want to track the company’s margin progression as cost-saving efforts and integration mature—especially after the tough first quarter. Management's ability to navigate the complex mix of tariff, production, and distribution pressures will determine whether Energizer can meet or beat its 2026 outlook and sustain shareholder returns over the next fiscal cycle.
Contact Information:
If you have feedback or concerns about the content, please feel free to reach out to us via email at support@marketchameleon.com.
About the Publisher - Marketchameleon.com:
Marketchameleon is a comprehensive financial research and analysis website specializing in stock and options markets. We leverage extensive data, models, and analytics to provide valuable insights into these markets. Our primary goal is to assist traders in identifying potential market developments and assessing potential risks and rewards.
NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.
Disclosure: This article was generated with the assistance of AI