Updated from 8:26 a.m. EST.
The Middleton, Wis.-based consumer products company posted adjusted earnings of $1.21 per diluted share, topping analysts' projections of $1.14 per share. Revenue of $1.21 billion slightly missed analysts' forecasts of $1.22 billion.
Earnings increased 19.8% year-over-year due to volume, improved mix, operating efficiencies and lower interest costs, the company said.
"We delivered solid first quarter adjusted EBITDA and adjusted earnings per share growth with strong margin expansion despite a continuation of foreign currency headwinds," CEO Andreas Rouve said in a statement.
"Hardware and home improvement delivered record results, the performance of global batteries and small appliances was excellent and, regionally, Europe, Latin America, Canada and Asia-Pacific reported solid organic adjusted EBITDA growth," he added.
Sales in the hardware and home improvement unit rose 2.2% to $288.8 million over last year. The results were driven by growth in the North American residential security category. Home and garden segment revenue rose 4.4% to $49.8 million year-over-year, driven by double-digit growth in the household insect control category.
Sales in the global batteries and appliances segment were $609.5 million during the period vs. $611.3 million a year ago. Organic net sales increased 2.3% as consumer batteries and small appliances increases more than offset lower personal care net sales.
But the global pet supplies division posted net sales of $194.2 million compared to $203.4 million last year. Revenues from European pet foods and North American companion animal product sales were lower during the period.
Global auto care segment revenue dropped 5.7% to $69.5 million from last year due to the timing of some shipments and U.S. retailer inventory adjustments.
Core category growth was partly offset by the strategic decisions to exit unprofitable businesses and deemphasizing low-margin promotions on Black Friday and during the holidays, executives said on a conference call with analysts.
Rouve also said it is premature to speculate about a border adjustment tax because there are "so many unknowns and variations." He noted that all of Spectrum's competitors are in the same situation, so if import taxes are raised, it would likely lead to a chain reaction and higher prices in the market.
Given the high proportion of Spectrum's costs of goods sold (COGS) produced overseas, shares could remain volatile pending further signals from the Trump administration regarding border tax reform, Piper Jaffray analysts said. The firm estimates that the company's COGS are more than 80%.
For fiscal 2017, the maker of George Foreman grills and Nature's Miracle products expects net sales to "grow above category rates." Spectrum also sees negative impact from foreign exchange of about 100 to 150 basis points.