"To date, we have announced 2 strategic price increases while maintaining our competitive position, secured improved terms with third-party manufacturing partners and accelerated production shifts to cost-competitive countries for U.S.-bound products."
— Thomas W. Tedford, President and Chief Executive Officer, ACCO Brands
03Detailed Report
ACCO
Company ACCO
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
ACCO Brands reported Q2 2025 revenue of $394.8 million, down 9.9% year over year, with gross margin of 32.9% and an operating margin of 8.36%. Net income was $29.2 million, delivering $0.32 per share on a reported basis and $0.31 per share on a diluted basis. Management attributed the results to tariff-related disruption in the Americas and softer demand across multiple channels, offset by ongoing cost-reduction actions and price increases. The company has progressed its multi-year cost-reduction program, realizing $8 million in savings in the quarter and over $40 million of annualized savings to date. This, together with tariff mitigation efforts and strategic pricing, is positioned to support margin stabilization and modest sequential improvement into Q3 and beyond. Looking into the second half, ACCO expects pricing actions to partially offset tariff costs and currency tailwinds to contribute positively in the near term. Management reaffirmed a longer-term growth thesis centered on expanding higher-growth product categories, accelerating new product introductions (notably in computer accessories and gaming peripherals), and selective acquisitions (e.g., Buro Seating) to enhance footprint in Australia and New Zealand. The company continues to target a gross margin of 33%–34% and expects adjusted free cash flow of approximately $100 million for the year, with leverage guided to the 3.8x–3.9x range by year-end. Management also signaled ongoing operational discipline and leadership changes to accelerate transformation.
Key Performance Indicators
Revenue
Decreasing
394.80M
QoQ: 24.39% | YoY: -9.92%
Gross Profit
Decreasing
129.70M
32.85% margin
QoQ: 30.22% | YoY: -8.14%
Operating Income
Decreasing
33.00M
QoQ: 592.54% | YoY: -37.97%
Net Income
Increasing
29.20M
QoQ: 321.21% | YoY: 123.32%
EPS
Increasing
0.32
QoQ: 328.57% | YoY: 124.81%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability:
- Q2 2025 revenue: $394.8 million; YoY change: -9.92%, QoQ change: 24.39% (per ratiosInfo). Gross profit: $129.7 million; gross margin 32.85%. Operating income: $33.0 million; operating margin 8.36%. Net income: $29.2 million; net margin 7.40%. EPS: $0.32 (GAAP); diluted EPS $0.31.
- YTD performance reflects tariff-driven headwinds and volume deleveraging but benefited from first-quarter margin strength and cost reductions.
Cost structure and efficiency:
- SG&A: $83.0 million; impact from cost-reduction actions and lower incentive comp.
- EBITDA: $52.8 million; EBITDA margin about 13.37% (EBITDARatio 0.1337).
- Multiyear cost reduction program: $8 million in cost savings in the quarter; cumulative annualized savings > $40 million; drivers include manufacturing footprint optimization, headcount reductions, and delayering.
Cash flow and balance sheet:
- Net cash flow from operations: -$38.9 million; free cash flow: -$43.5 million for the quarter; year-to-date free cash flow is negative at $24 million (including $17 million cash proceeds from asset sales).
- Cash and equivalents: $133.3 million; total assets: $2.378 billion; total liabilities: $1.740 billion; net debt: approximately -$3.6 million (cash > debt).
- Leverage: 4.3x at quarter end; covenant amendment increased leverage covenants by 50 bps for 2025 and 25 bps for 2026 to provide additional cushion.
Segment and geographic mix:
- Americas: comparable sales down 14% in Q2; adjusted operating margin 17.4% below prior year due to weaker volumes, tariff impact, and fixed-cost deleveraging.
- International: comparable sales down 4%; adjusted operating margin 8.5% benefited from pricing, cost savings, and lower incentive comp; Asia growth positive, Europe softer (Germany, UK, France).
- Outside the U.S. (~60% of sales) not impacted by tariffs; management emphasized China plus one strategy and supply-chain optimization to protect margins.
Strategic updates and guidance:
- Nintendo Switch 2 related accessories (PowerA) launched June 5; expect stronger Switch 2 demand in H2 and into 2026 as adoption grows.
- New product introductions: Thunderbolt 5 docking station targeting Apple ecosystem; work lights in Europe under Repeat; ergonomic Sit Stand desktop solution; Buro Seating acquisition integrated in Australia and New Zealand.
- Full-year guidance: revenue down 7% to 8.5%; adjusted EPS $0.83–$0.90; adjusted free cash flow around $100 million; year-end leverage 3.8x–3.9x. Q3 guidance: revenue down 5% to 8%; adjusted EPS $0.21–$0.24. Outlook assumes pricing actions offset tariff costs and some FX tailwinds.
Market positioning and valuations:
- Current ratios and liquidity modestly constrained by seasonally high working capital needs; price-to-book ~0.52x; price-to-sales ~0.84x; P/E ~2.84x; dividend yield ~2.02%. Enterprise value multiple ~24.08x. These metrics imply a defensively priced stock with potential upside if demand stabilizes and margin recovery occurs.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
394.80M
-9.92%
24.39%
Gross Profit
129.70M
-8.14%
30.22%
Operating Income
33.00M
-37.97%
592.54%
Net Income
29.20M
123.32%
321.21%
EPS
0.32
124.81%
328.57%
Key Financial Ratios
Gross Profit Margin
Fair
32.90%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Fair
8.36%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Fair
7.40%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
1.23%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
4.58%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.85
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
High Risk
1.69
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Value
2.84x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Undervalued
0.52x
Trading below book value, potential value opportunity or distressed
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