• Adjusted EPS: Above outlook range for Q2 2024.

• Gross Margin: Expanded by 150 basis points year-over-year.

• SG&A Expenses: Reduced by 10% compared to the same period last year.

• Inventory Levels: Reduced by 17% versus the prior year.

• Net Debt Position: 13% lower compared to last year.

• Leverage Ratio: Consolidated net leverage ratio of 3.7 times, expected to be about 3 times by end of 2024.

• Reported Sales: Decreased 11% versus the prior year; comparable sales down 10% excluding foreign exchange.

• Gross Profit: $153 million, a decrease of 7% due to lower sales.

• Adjusted Operating Income: $65 million, similar level to last year.

• Americas Segment Sales: Declined 13%, with lower-margin business exit accounting for over 5% of the decline.

• International Segment Sales: Declined 5% with double-digit growth in computer accessories.

• Free Cash Flow: Improved by $43 million versus the prior year; free cash outflow of $2 million through June 30.

• Total Gross Debt: $986 million, $100 million lower than the same time last year.

• Cash Balance: $113 million, higher than a year ago.

• Full-Year 2024 Outlook: Reported sales expected to be down 8% to 9%; adjusted EPS expected to be $1.04 to $1.09 per share.

• Third Quarter 2024 Outlook: Reported sales expected to be down 5% to 7%; adjusted EPS expected to be $0.21 to $0.24 per share.

• Warning! GuruFocus has detected 4 Warning Signs with ACCO.

Release Date: August 02, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ACCO Brands Corp (NYSE:ACCO) reported adjusted EPS above their outlook range for the second quarter of 2024.

• The company achieved a gross margin expansion of 150 basis points and reduced SG&A expenses by 10% for the quarter.

• ACCO Brands Corp (NYSE:ACCO) successfully reduced inventory levels by 17% compared to the prior year, improving cash flow and balance sheet strength.

• The company's net debt position improved, with a 13% reduction compared to last year, and they expect to end 2024 with a leverage ratio of about 3 times.

• ACCO Brands Corp (NYSE:ACCO) is strategically investing in new product development and strengthening partnerships to gain market share.

Negative Points

• Reported sales for the second quarter of 2024 decreased by 11% compared to the prior year, with comparable sales down 10%.

• The company took a noncash impairment charge of $165 million related to goodwill and intangible assets due to market capitalization declines and reduced volumes.

• Demand for office product categories remained below expectations, contributing to a sales shortfall versus outlook.

• The Americas segment experienced a 13% decline in comparable sales, primarily due to lower business and consumer spending.

• ACCO Brands Corp (NYSE:ACCO) anticipates continued challenges in the back-to-school market, with industry experts forecasting sales to be down compared to the prior year.