"Every time I hit rock bottom, somebody throws me a shovel." -- Garfield
Few companies can match Spectrum Brands
The company formerly known as Rayovac had amply warned folks that this quarter would be ugly, and it delivered on that pledge. Sales were down 4% on an organic basis, led in particular by poor results in the battery business. High materials costs continue to hurt margins, and the company reported a substantially lower pro-forma profit. And the rotten cherry atop this mess was a further cut in guidance.
It's not as though this is the first time Spectrum Brands has dropped guidance, either. In fact, it has been foundering for quite some time, making management's comment about the need to "execute flawlessly" on cost-cutting initiatives almost laughable.
I tend to like these smaller housewares/consumer products companies: I'm a bit interested in Chattem
Maybe, just maybe, this is the bottom and the company can overcome destocking at places like Wal-Mart and Home Depot and compete better against the likes of Procter & Gamble
I'll certainly keep an eye on this as a turnaround candidate, but I'd first like to see at least a month or two go by without estimates going lower yet again.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).