ACCO Brands Corporation has announced its third quarter results for the period ended September 30, 2021. A summary of the results is as follows:

  • Net sales were $527 million, up 19%; comparable sales up 4%, all segments up
  • EPS was $0.21 versus $0.20 in prior year; adjusted EPS was $0.33 versus $0.25 in 2020
  • Higher tax rate impacted EPS and adjusted EPS by $(0.02) and $(0.03), respectively
  • Gross margin improved 120 bps
  • Generated 3Q operating cash flow of $99 million; reduced debt $117 million
  • Raised dividend 15%

“We posted another solid quarter based on improving demand worldwide, with organic sales growth in all segments. EMEA posted double-digit comparable sales growth; back-to-school sell-out was strong in North America; International showed improvement; and PowerA added $57 million. We are managing inflation and the supply chain disruptions well, and expanded our gross margin in the quarter. We remain confident in our strategy and believe that we will deliver record sales and strong profit performance in 2021,” said Boris Elisman, chairman and chief executive officer of ACCO Brands.

ACCO Brands North America

Sales of $287.5 million increased 20.5% from $238.5 million in 2020, primarily due to the PowerA acquisition, which added $45.1 million. Favourable foreign exchange added $2.0 million, or 0.8%. Comparable sales of $240.4 million increased 0.8% primarily due to higher back-to-school replenishment and improved commercial product sales. Computer accessory sales were lower as the prior-year period benefited from a very large order that did not repeat this year.

The segment operating income was $34.6 million versus $22.9 million in 2020. The increase primarily was due to higher sales and gross margin, $2.5 million from PowerA, and $0.5 million of lower restructuring charges, partially offset by more normalized expenses. (The change in the fair value of the contingent consideration for PowerA is not allocated against segment results.) Adjusted operating income of $41.6 million increased from $26.0 million in 2020, primarily for the reasons cited above.

Nine Months Results

Net sales increased 21.7% to $1,455.0 million from $1,195.1 million in 2020 primarily because of the PowerA acquisition, which added $170.2 million, or 14.2%. Comparable sales increased 3.7% driven by higher consumer demand and offices and schools reopening for in-person activity. Favourable foreign exchange added $46.0 million, or 3.8%.

Net income was $48.4 million, or $0.50 per share, compared with $32.2 million, or $0.34 per share, in 2020 due to higher operating income and lower taxes, partly offset by $7.3 million of higher interest expense. Adjusted net income was $83.7 million compared with $54.4 million in 2020 due to higher adjusted operating income. Adjusted earnings per share were $0.86 compared with $0.57 in 2020.

Full Year Outlook

“We have good momentum in all of our segments and expect continued organic growth in the fourth quarter. We also have taken several price increases across all of our businesses globally to help offset the higher costs we are seeing. We are reducing the top end of our sales outlook to reflect the impact of console availability on PowerA’s sales and modifying our adjusted EPS outlook because of the higher full year tax rate,” concluded Elisman.

For the full year, sales are expected to be in a range of $2.0 billion to $2.04 billion, with PowerA contributing $240 million to $260 million. Adjusted earnings per share are expected to be in a range of $1.30 to $1.40, using a 31% adjusted effective tax rate (up from 29% in the prior outlook), and a favourable foreign exchange impact of 2.5% on sales and $0.05 on adjusted earnings per share.

To view the full press release, please click here. 

Source: Business Wiere