In the first quarter of its FY ending 1 January 2023, the US manufacturer’s pet portfolio income jumped 84.6% to $22.7 million.
Pet Care sales of the Wisconsin-based company in the 3 months dropped 8.2% to $277.5 million (€260M) from $302.2 million (€282M) in January 2022.
However, earnings almost doubled in the quarter to $22.7 million (€21M) compared to $12.3 million (€11.5M) earned in the same period of the previous year.
Spectrum notes that the decrease in sales was driven by elevated retail inventory levels limiting replenishment orders.
Lower retail sales
The pet segment was also impacted by diminished retail sales in hard goods categories, mostly among pet specialty retailers. It was, however, offset by positive pricing adjustments in Europe, Middle East, and Africa (EMEA).
Sales and distribution for its Chews and Treats segment remain steady with a decline in hard goods and aquatic products as compared to previous year. Its EMEA sales were impacted by lower aquatic sales compensated by a growth in pet food sales.
Sales across the brand’s divisions dropped 5.8% which it says was caused by decreased replenishment orders, sluggish holiday retail sales, and adverse foreign currency.
David Maura, Chairman and Chief Executive Officer of Spectrum Brands said that the company expects most of the higher-cost inventory to be distributed in the first half of the year, leading to “much better profitability” in the second half of its FY.
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