Office Products News

ACCO Brands exceeds early forecasts

First quarter 2023 top- and bottom-line results at ACCO Brands came in ahead of the forecasts the company published in February.
 
The vendor had said first quarter comparable sales were expected to be down by 7-10% year on year, with adjusted earnings per share (EPS) of between $0.05-$0.07. The revenue decline was 6.4%, while adjusted EPS was $0.09.
 
Company CEO Boris Elisman praised the “solid execution” of the ACCO team during the quarter. “Our results reflect the ongoing strength of our brands and the impact of the actions we have taken to transform our business by expanding our product categories, broadening our geographic reach, bringing innovative new consumer-centric products to market, and streamlining our cost structure,” he stated.
 
A top priority at ACCO this year is to restore margins, which took a hit at the end of 2022. Elisman said “significant progress” had been made in this area due to pricing, productivity and restructuring initiatives.
 
In Q1 2023, gross margin improved by 280 basis points to 29.6%, adjusted operating margin was up by 90 basis points to 6% and adjusted EBITDA margin was 9.6%, versus 8.8% 12 months ago. Nevertheless, the companywide improvement masked challenges in North America (see below).
 
Total company sales in the quarter were $403 million, down from $442 million in Q1 2022. The decline was blamed on reduced volumes, the timing of back-to-school (BTS) purchases by retailers in North America and weaker sales of technology accessories. These factors more than offset the effects of price increases and volume growth in ACCO’s International business.
 
Q1 2023 segment results (compared with Q1 2022):
 
North America:
  • Sales: $176.7 million, a comparable decline of 14.6%
  • Adjusted operating profit: $10.9 million (-15.3%)
  • Adjusted operating margin: 6.2% (-330 basis points)

EMEA:

  • Sales: $135.8 million, a comparable decline of 7.3%
  • Adjusted operating profit: $13.6 million (-13%)
  • Adjusted operating margin: 10% (+420 basis points)
International:
  • Sales: $90.1 million, a comparable increase of 17.2%
  • Adjusted operating profit: $11.7 million (+17%)
  • Adjusted operating margin: 13% (+490 basis points)
ACCO reaffirmed its full-year outlook of flat to -3% comparable sales, but expects the figure to be down by 4-7% in the current quarter, reflecting what it called a “challenging near-term demand environment”.
 
For more on this story and other global news from OPI, go to https://www.opi.net/news/region/001-north-america/acco-beats-expectations/
Date Published: 
12 May 2023