Exchange: NYSE | Sector: Industrials | Industry: Business Equipment Supplies
Q3 2025
Published: Oct 31, 2025
Earnings Highlights
Revenue of $383.70M down 8.8% year-over-year
EPS of $0.04 decreased by 58.7% from previous year
Gross margin of 33.0%
Net income of 4.00M
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ACCO Brands Corporation (ACCO) QQ3 2025 Results: Revenue Decline Amid Margin Pressure in a Diversified Office Products Portfolio
Executive Summary
ACCO Brands reported QQ3 2025 revenue of $383.7 million, a year-over-year decline of 8.8% and a quarter-over-quarter drop of 2.8%. Gross profit reached $126.6 million with a gross margin of 32.99%, while operating income stood at $26.0 million, yielding a margin of 6.78%. Net income totaled $4.0 million and diluted EPS was $0.04 for the quarter. The company posted a negative net income progression on a YoY/QoQ basis, reflecting pressure from mix, input costs, and a higher effective tax rate, with net margin at 1.04% and tax rate shown as a high 72.8% in the period. EBITDA was $26.0 million (6.78% EBITDA margin). Liquidity remained solid with a current ratio of 1.68 and a modest debt posture (debt ratio 5.6%, debt/equity 0.19), supporting a positive cash-flow profile: operating cash flow per share $0.78 and free cash flow per share $0.72, alongside cash per share of $0.90. However, inventory days outstanding (~110 days) and receivables days (~69 days) imply working-capital intensity and a cash conversion cycle of about 118 days, underscoring near-term working-capital optimization needs. Management commentary is not included in the dataset, limiting quote-based interpretation, but the quantitative backdrop signals a cautious near-term outlook with potential for margin stabilization if price realization and cost controls take hold. The Quarter-to-Date performance sits within a multi-quarter trend of elevated working-capital requirements and modest top-line momentum, suggesting ACCO remains disciplined on balance-sheet management while pursuing product/channel mix improvements and price leverage to drive margin recovery. The investment implication is a cautious stance pending evidence of improved top-line trajectory and sustainable margin expansion, supported by robust cash generation and conservative leverage.
Key Performance Indicators
Revenue
383.70M
QoQ: -2.81% | YoY:-8.84%
Gross Profit
126.60M
32.99% margin
QoQ: -2.39% | YoY:-7.52%
Operating Income
26.00M
QoQ: -21.21% | YoY:-1.14%
Net Income
4.00M
QoQ: -86.30% | YoY:-56.99%
EPS
0.04
QoQ: -87.50% | YoY:-58.72%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $383.7 million in Q3 2025, YoY -8.84%, QoQ -2.81%. Four-quarter trend shows Q2 2025 at $394.8m, Q1 2025 at $317.4m, Q4 2024 at $448.1m, highlighting sequential volatility and a softer Q3 relative to year-ago levels.
Operating Income & Margin: Operating income $26.0 million; operating margin 6.78% (0.0678). YoY margin decline of about 1.14%; QoQ drop of 21.21% in operating income.
Net Income & EPS: Net income $4.0 million; net margin 1.04%. YoY net income down -56.99%; QoQ down -86.30%. EPS $0.04; YoY EPS down -58.72%; QoQ down -87.50%.
EBITDA & Efficiency: EBITDA $26.0 million; EBITDA margin 6.78%. Interest expense $12.5 million; pretax income $14.7 million; tax expense $10.7 million; effective tax rate 72.8% (notable for the quarter).
Financial Highlights
- Revenue: $383.7 million in Q3 2025, YoY -8.84%, QoQ -2.81%. Four-quarter trend shows Q2 2025 at $394.8m, Q1 2025 at $317.4m, Q4 2024 at $448.1m, highlighting sequential volatility and a softer Q3 relative to year-ago levels.
- Gross Profit & Margin: Gross profit $126.6 million; gross margin 32.99% (0.3299). YoY gross profit decline -7.52%; QoQ decline -2.39%.
- Operating Income & Margin: Operating income $26.0 million; operating margin 6.78% (0.0678). YoY margin decline of about 1.14%; QoQ drop of 21.21% in operating income.
- Net Income & EPS: Net income $4.0 million; net margin 1.04%. YoY net income down -56.99%; QoQ down -86.30%. EPS $0.04; YoY EPS down -58.72%; QoQ down -87.50%.
- EBITDA & Efficiency: EBITDA $26.0 million; EBITDA margin 6.78%. Interest expense $12.5 million; pretax income $14.7 million; tax expense $10.7 million; effective tax rate 72.8% (notable for the quarter).
- Cash Flow & Liquidity: Operating cash flow per share $0.78; free cash flow per share $0.72; cash per share $0.90. Current ratio 1.68; quick ratio 0.96; cash ratio 0.19. Dividend yield 1.86%; payout ratio listed at 170% (likely reflecting timing of dividends vs. buybacks or data artifact).
- Leverage & Capital Structure: Debt ratio 0.055; debt/equity 0.193; long-term debt to capitalization 9.31%; total debt to capitalization 16.2%. Interest coverage around 2.08x.
- Asset/Liability Management & Turnover: DSO 69.5 days; DIO 110.4 days; CCC ~118.4 days; receivables turnover 1.30x; inventory turnover 0.82x. Price multiples: P/E ~22.87x; P/B 0.57x; P/S 0.95x; EV/EBITDA ~15.69x.
- Market Position Indicators: Dividend yield 1.86%; enterprise value multiple 15.69x; price-to-book ~0.57x, indicating a value-like posture relative to book.
- Net takeaway: The quarter shows top-line softness with mixed profitability signals, a high effective tax rate, and a cash-strong, low-leverage balance sheet. Cash generation supports flexibility for strategic investments and potential deleveraging if macro conditions improve.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
383.70M
-8.84%
-2.81%
Gross Profit
126.60M
-7.52%
-2.39%
Operating Income
26.00M
-1.14%
-21.21%
Net Income
4.00M
-56.99%
-86.30%
EPS
0.04
-58.72%
-87.50%
Key Financial Ratios
currentRatio
1.68
grossProfitMargin
33%
operatingProfitMargin
6.78%
netProfitMargin
1.04%
returnOnAssets
0.18%
returnOnEquity
0.62%
debtEquityRatio
0.19
operatingCashFlowPerShare
$0.78
freeCashFlowPerShare
$0.72
dividendPayoutRatio
170%
priceToBookRatio
0.57
priceEarningsRatio
22.87
Net Income vs. Revenue
Expense Breakdown
Management Commentary
The dataset provided contains an empty earnings transcript (earningsTranscript: []). Therefore, there are no management quotes or theme-driven highlights available to group by strategy, operations, or market conditions. Investors should consult the official earnings call for verbatim commentary on price realization, margin management, cost controls, and any forward-looking guidance. In lieu of transcript quotes, the analysis relies on the reported KPI trajectory and known quarterly results.
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Forward Guidance
- No explicit forward guidance is included in the provided dataset. Investors should monitor four critical factors as management and industry dynamics evolve: (1) price realization and mix effect from product portfolio changes (e.g., GBC, Barrilito, Five Star brands) to stabilize gross margins, (2) ongoing cost containment and SG&A discipline to support operating margins amid input-cost volatility, (3) working-capital optimization, given extended inventory days (110.37 days) and receivables days (69.52 days), to improve cash conversion, and (4) currency exposure and global mix effects across North America, EMEA, and International segments affecting profitability. Additionally, industry trends such as digital adoption in education and hybrid-work office spend could influence end-market demand. Guidance to watch for includes any targeted gross-margin expansion, capex plans, dividend policy adjustments, and any strategic initiatives on channel optimization or acquisitions that could alter the risk-reward profile.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ACCO Focus
32.99%
6.78%
0.62%
22.87%
ACTG
10.10%
-44.10%
-2.59%
-8.31%
EBF
29.30%
13.10%
3.43%
13.59%
HNI
42.10%
9.56%
4.93%
0.00%
SCS
33.40%
5.16%
2.05%
19.77%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
ACCO Brands presents a mixed near-term risk-reward profile. The QQ3 2025 results show a meaningful revenue decline and margin pressure, with net income and EPS trending lower YoY and QoQ, alongside a high apparent effective tax rate. However, the company maintains a conservative balance sheet and delivers positive operating and free cash flow per share, which supports the ability to fund working capital needs, service debt, and pursue value-enhancing initiatives. Relative to a peer group of office-products and furniture players, ACCO’s gross margin sits near mid-pack while operating margins lag some higher-margin peers, reflecting mix and cost structure dynamics. The absence of explicit forward guidance in the provided data requires a cautious stance until management confirms a path to margin stabilization and revenue stabilization or growth. Key catalysts to monitor include: (1) price realization and mix optimization to bolster gross margins, (2) ongoing SG&A discipline and cost-control actions, (3) working-capital efficiency improvements to shorten cash conversion, and (4) potential strategic actions such as product-line optimization, international expansion, or selective acquisitions that could enhance scale and pricing power. If ACCO can demonstrate stabilization or an uptick in revenue with proportionate cost control, the stock could re-rate toward its multi-quarter valuation support (P/S ~0.95x, EV/EBITDA ~15.7x) while maintaining a strong cash-flow backbone. Conversely, persistent deterioration in demand or failure to realize margin benefits could keep earnings and cash-flow growth muted in the near term.
Key Investment Factors
Growth Potential
Diversified brand portfolio (ATAGLANCE, Barrilito, Derwent, Five Star, GBC, Kensington, Leitz, etc.) and a broad multi-channel distribution network create a platform for stabilizing revenue through price mix, product innovation, and geographic expansion. Potential growth in EMEA and International segments may offset North American variability as office-supplies demand normalizes post-pandemic.
Profitability Risk
Significant reliance on timing of price realization and input-cost dynamics; high tax rate observed in Q3 2025; working-capital intensity with long inventory days and elevated DSO; low ROE and modest earnings visibility given current margins; competitive intensity in office supplies and potential channel disruption in e-commerce; FX exposure across international operations.
Financial Position
Conservative leverage profile (debt ratio ~0.055, debt/equity ~0.193) with positive operating and free cash flow per share (0.78 and 0.72 respectively). Cash per share of 0.90 supports liquidity. However, high tax rate and modest net margins indicate limited earnings leverage; cash-flow generation remains a key driver for value creation and shareholder returns.
SWOT Analysis
Strengths
Diversified product portfolio across ACCO Brands North America, EMEA and International segments, with well-known brands (ATAGLANCE, Barrilito, Derwent, Esselte, Five Star, GBC, Kensington, Leitz, etc.).
Multi-channel distribution reach (mass retailers, e-tailers, catalog/stationery dealers, office superstores, contract stationery, and direct-to-consumer via ecommerce).
Solid balance sheet with conservative leverage (low debt ratio and debt/equity), and robust cash generation (operating and free cash flow per share).
Weaknesses
Revenue decline in QQ3 2025 (YoY and QoQ), indicating demand softness in core markets.
Moderate net margins and high effective tax rate (72.8%), compressing bottom-line profitability.
High days inventory outstanding (110.37) and elevated days sales outstanding (69.52), implying working-capital intensity and potential cash conversion delays.
ROE is relatively muted (low return on equity) despite positive cash flow, suggesting limited earnings leverage over equity.
opportunities([
opportunities to optimize pricing, product mix, and channel strategy to improve margins; potential acceleration of growth in international markets; ongoing cost-containment programs to manage input-cost volatility; further capital allocation flexibility via buybacks or dividends given strong cash position.
Opportunities
Global expansion in high-growth regions (EMEA/International) and digital/e-commerce acceleration across channels.
Price realization and product mix improvements to drive margin recovery.
Cross-brand synergies and leveraging a diversified supplier base to optimize COGS.
Threats
Macro-economic weakness and consumer spending cyclicality in office-supplies and education markets.
Competition from low-cost entrants and disruptive channels.
FX volatility impacting international margins.
Supply-chain disruptions and commodity cost pressures that could weigh on COGS and timing of price increases.