Why ACCO Brands Stock Jumped 20% Today

The school and office supplies maker's Q2 earnings bested Wall Street's expectations.

Joe Tenebruso
Joe Tenebruso
Jul 31, 2019 at 8:08PM
Consumer Goods

What happened

Shares of ACCO Brands (NYSE:ACCO) popped more than 20% on Wednesday, following the release of the company's second-quarter financial results. 

So what

The owner of brands such as Five Star and Mead delivered record sales of $518.7 million, representing year-over-year growth of 4% and 6.8% when excluding the impact of foreign currency movements.

Better still, ACCO Brands' operating income jumped 18.5% to $61.4 million, while net income surged 39.7% to $35.9 million. All told, the company's earnings per share came in at $0.35, which was above analysts' estimates for EPS of $0.32. 

"We have managed the business well, and offset inflation and tariffs with pricing and tight expense management," CEO Boris Elisman said in a press release.

A person pointing to an upwardly sloping line chart that's above a flat line chart

ACCO Brands' stock rose sharply on a down day for the market. Image source: Getty Images.

Now what

These results prompted ACCO Brands to raise its full-year sales and profit guidance. The company now expects net sales to be flat year over year, up from a prior forecast of flat to down 3%. Adjusted earnings per share, meanwhile, are projected to be between $1.15 and $1.20, up from $1.10 to $1.20. Management also reiterated its free cash flow target of $165 million to $175 million.

"Our strategy of diversifying into growing channels and geographies is working, and our focus on consumer-centric products and brands is paying off as evidenced by the strong sales and profit growth in North America where we are well-positioned for a very good back-to-school season," Elisman said.