Q: SPB took a huge hit this morning, What’s happening? Is it still a hold?
5i Research Answer:
SPB cut its dividend by 75% and reported earnings. EPS was -27c vs estimates of -16c. Revenue of $359.4M missed estimates of $396M. EBITDA of $17.4M missed estimates by 22%. It lowered its guidance from 5% growth to 'flat'. Competitive pressures and warm weather were cited as the reasons. As a yield stock, investors are dumping shares because of the dividend cut. We think it can be sold, but would prefer to wait for a bounce after today's big hit. But fundamentals have deteriorated and the cut is making a statement by the company.