Executive Summary
ACCO Brands reported a seasonally quiet QQ1 2025, with revenue of $317.4 million and a net loss of $13.2 million (-$0.14 per share). On a reported basis, sales declined 12% and were down 8% on a comparable basis excluding foreign exchange, driven by softer discretionary demand across consumer and business channels. Management highlighted a 60-basis-point gross-margin expansion driven by favorable product mix and ongoing cost-reduction actions, including more than $7 million of savings realized in the quarter as part of the $100 million multiyear cost-reduction program. The company continued to execute on its China plus one strategy to de-risk tariffs, temporarily building inventories and accelerating production outside China, while signaling price actions in North America to preserve margins. Despite near-term headwinds, ACCO remains focused on portfolio expansion (ergonomics and seating via ANZ acquisition, Switch 2.0 and other new products), channel expansion, and accelerated SKU rationalization to support medium-term margin targets.
Key Performance Indicators
QoQ: -29.17% | YoY:-11.56%
QoQ: -35.95% | YoY:-0.60%
QoQ: -115.95% | YoY:-211.67%
QoQ: -164.08% | YoY:-109.52%
QoQ: -163.64% | YoY:-112.77%
Key Insights
Revenue YoY -11.56%; QoQ -29.17% (per earnings metrics). Gross profit YoY -0.60%; QoQ -35.95%. Operating income YoY -211.67%; QoQ -115.95%. Net income YoY -109.52%; QoQ -164.08%. EPS YoY -112.77%; QoQ -163.64%. Free cash flow: $3.3 million. Net cash provided by operating activities: $5.5 million. Cash at end of period: $134.6 million. Consolidated leverage: 3.65x (covenant 4.5x). Long-term debt: $69.1 million; total debt: $125.5 million. 60% of sales outside the United States. Management targets...
Financial Highlights
Revenue YoY -11.56%; QoQ -29.17% (per earnings metrics). Gross profit YoY -0.60%; QoQ -35.95%. Operating income YoY -211.67%; QoQ -115.95%. Net income YoY -109.52%; QoQ -164.08%. EPS YoY -112.77%; QoQ -163.64%. Free cash flow: $3.3 million. Net cash provided by operating activities: $5.5 million. Cash at end of period: $134.6 million. Consolidated leverage: 3.65x (covenant 4.5x). Long-term debt: $69.1 million; total debt: $125.5 million. 60% of sales outside the United States. Management targets gross margin of 33%–34% in the medium term, with ongoing cost controls and product innovation as primary drivers.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
317.40M |
-11.56% |
-29.17% |
| Gross Profit |
99.60M |
-0.60% |
-35.95% |
| Operating Income |
-6.70M |
-211.67% |
-115.95% |
| Net Income |
-13.20M |
-109.52% |
-164.08% |
| EPS |
-0.14 |
-112.77% |
-163.64% |
Key Financial Ratios
operatingProfitMargin
-2.11%
operatingCashFlowPerShare
$0.06
freeCashFlowPerShare
$0.04
dividendPayoutRatio
-51.5%
Management Commentary
Key management themes from the QQ1 2025 earnings call include: (1) Tariff environment and supply chain repositioning: ACCO is accelerating moves out of China for US-facing production, building inventories to mitigate tariff impacts, and signaling additional price actions in North America; (2) Revenue trends and geographic dynamics: Americas benefited from early back-to-school purchases and Brazil growth, offset by weakness in other regions; International strength in computer and gaming accessories (Kensington and PowerA dynamics noted); (3) Product pipeline and growth initiatives: launch of Switch 2.0 support products in June; expanded ergonomics portfolio and ANZ acquisition; Kensington pipeline anticipated to drive new-product revenue, with ongoing NPD refinement; (4) Cost discipline: more than $7 million in quarterly savings from the footprint/rationalization program, building on $25 million in 2024 with a target of roughly $40 million for 2025; (5) Capital allocation and liquidity: modest stock repurchases ($15 million) and continued dividend support; balance sheet remains strong with debt maturities not until 2029 and ample revolver availability (~$236 million).
"First quarter comparable sales were down 8%."
— Thomas Tedford
"By the end of 2025, there will remain an insignificant amount of high tariff China sourced product which will represent slow moving, low volume and secular declining categories."
— Thomas Tedford
Forward Guidance
Management does not provide full-year guidance due to tariff uncertainty. For Q2, ACCO expects reported sales to be down 8% to 12% with better FX tailwinds as the dollar weakens. Adjusted EPS for Q2 is guided to $0.28–$0.32. The company intends to defend margins via price actions, supply-chain optimization, and continued cost discipline. Near-term catalysts include tariff resolution outcomes, the Switch 2.0 and other new products, globalization of sourcing, and potential incremental acquisitions. Investors should monitor: (a) tariff developments and the pace of US supplier diversification; (b) the effectiveness of price increases in North America; (c) the trajectory of foreign exchange rates; (d) progress on the 2025 cost-savings target and SKU rationalization; (e) integration and monetization of the ANZ ergonomic seating acquisition and the international ergonomics initiative; (f) demand trends in education (back-to-school) and computer/gaming accessories. Overall, the longer-term thesis hinges on achieving 33–34% gross margin, modest revenue growth from organic and inorganic initiatives, and sustainable free-cash-flow generation.