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    ACCO
    Earnings call· Jun 2026(Q2 FY26)

    ACCO BRANDS Q2 FY26 earnings call ACCO

    Jul 31, 2026 Source

    Executive summary

    ACCO Brands Q2 FY26 — Sales and EPS Exceed Outlook, Full-Year Guidance Raised

    ACCO Brands delivered a strong second quarter, surpassing sales and adjusted EPS expectations, primarily driven by robust performance in the Americas and successful integration of the EPOS acquisition. Despite facing headwinds in technology peripherals and international markets, the company raised its full-year outlook, reflecting confidence in its cost reduction programs and strategic growth initiatives. Management remains focused on operational excellence and repositioning towards faster-growing categories, while acknowledging a seasonally adverse product and geographic mix in the second half.

    Highlights

    5

    • Q2 consolidated sales grew 5% and adjusted EPS exceeded outlook.

    • Americas segment sales up 6% with comparable sales up 2%, driven by strong back-to-school placements in North America and solid growth in Mexico.

    • EPOS acquisition integration on track, with Q2 sales ahead of expectations and full-year sales expected at $80 million.

    • Adjusted gross profit margin increased 20 basis points to 33.1% due to cost savings.

    • Full-year outlook for both sales (up 2%-5%) and adjusted EPS ($0.87-$0.91) raised.

    Concerns

    4

    • Comparable sales were down 2% due to soft demand in Brazil and technology peripherals.

    • International segment comparable sales down approximately 9% due to weak demand in EMEA and Australia, compounded by a distribution system upgrade disruption.

    • Technology peripherals demand soft due to cautious end-user spending, elevated hardware costs, constrained memory chip availability, soft console gaming, and shifts to AI investments.

    • Anticipate lower gross profit and operating income margin in H2 FY26 compared to prior year due to higher inflationary costs and lagging pricing efforts.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year reported sales
    up within a range of 2% to 5%
    high materiality
    High
    Full-year adjusted EPS
    within the range of $0.87 to $0.91
    high materiality
    High
    Full-year free cash flow
    within the range of $75 million to $85 million
    medium materiality
    High
    Full-year restructuring payments
    $24 million
    low materiality
    High
    Full-year CapEx
    $15 million
    low materiality
    High
    Year-end consolidated leverage ratio
    within a range of 3.7 to 3.9x
    medium materiality
    High
    Q3 reported sales
    within a range of down 1% to up 2%
    medium materiality
    High
    Q3 adjusted EPS
    within a range of $0.17 to $0.21
    medium materiality
    High
    EPOS 2026 sales
    approximately $80 million
    medium materiality
    High
    EPOS cost synergies
    $15 million
    medium materiality
    High
    Cost reductions
    $100 million
    high materiality
    High
    Back-to-school sales
    up mid-single digits
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Americas
    Comparable sales up 2%. Good growth in Learning & Creative in both North America and Mexico, partially offset by softer demand in Brazil and in core office and technology peripheral products. Adjusted operating income was $56 million, up approximately $13 million. Margin rate improved 380 basis points, driven by stronger volume and cost savings. Prior year results were impacted by tariff-related disruption.
    		up 6%——21.2%
    International
    Comparable sales down approximately 9%. Demand in EMEA and Australia was soft due to purchasing hesitancy related to geopolitical and economic factors. Planned EMEA distribution system upgrade disrupted supply chain and customer deliveries, now resolved. Adjusted operating income was $4 million, both down versus the prior year. Second quarter is seasonally the weakest margin quarter due to lower sales and volume.
    		up 4%——2.4%

    Operational metrics

    12
    Adjusted gross profit
    $138 millionup 6%
    Q2 FY26
    Adjusted gross profit margin
    33.1%up 20 bps
    Q2 FY26

    Increase mostly attributable to cost savings.

    Adjusted SG&A expense
    $89 millionup
    Q2 FY26

    Cost mitigation in place, with savings more than offsetting cost inflation.

    Adjusted operating income
    $48 millionup
    Q2 FY26

    Reflecting cost savings, partially offset by fixed cost deleveraging due to organic volume declines.

    Year-to-date free cash outflow
    $39 millioncomparable to last year
    YTD Q2 FY26

    In line with plan. Generally use cash in the first half and generate significant cash flow in the second half.

    Inventory
    up $14 millionYoY
    Q2 FY26
    Cash returned to shareholders
    $7 million
    Q2 FY26
    Available for borrowing under revolver
    $205 million
    Q2 FY26
    Consolidated leverage ratio
    4.3x
    Q2 FY26

    Well below debt covenants. Second quarter is peak quarter for borrowing.

    Cost savings
    more than offsetting cost inflation
    Q2 FY26

    Strong cost mitigation in place.

    Tariff refunds claims (Phase 2)
    $20 million
    Expected 2026

    Not assumed in actual results or outlook, accounted for as a gain contingency.

    Tariff refunds claims (additional)
    $5 million
    Expected 2027

    Not assumed in actual results or outlook, accounted for as a gain contingency.

    Industry KPIs

    3
    MetricValueDetails
    Volumedown 2%%
    Core price—
    Price to cost spread—

    Deals & partnerships

    1
    EPOS (from Demant A/S)Acquisition of technology peripherals business

    Integration progressing as planned, with second quarter sales ahead of expectations. Inherited a great team, strong capabilities, and product portfolio. Initial integration focused on IT infrastructure and synergy conversations, now shifting to growth opportunities.

    Risks & headwinds

    5
    Uncertain Global Operating EnvironmentH2 FY26

    Seasonally adverse product and geographic mix in the back half of the year.

    Mitigation: Maintaining a prudent view of the second half of the year.

    Weak Industry Demand in Technology PeripheralsQ2 FY26, expected to continue in H2 FY26

    Soft in the second quarter due to cautious spending, elevated hardware costs, constrained memory chip availability, soft console gaming, and shifts in enterprise investments to AI. Global PC shipments declined.

    Mitigation: Optimistic in PowerA brand and well positioned to benefit when industry dynamics improve. Expect the fourth quarter release of Grand Theft Auto 6 to drive positive sales momentum.

    Soft Demand in BrazilQ2 FY26

    Weaker sales due to a soft economy, creating hesitancy in customer purchasing and an adverse product mix.

    Mitigation: Adjusted product assortment, go-to-market strategies, sales incentive plans, and pricing where appropriate to better align with consumer needs.

    Weak Demand in EMEA and AustraliaQ2 FY26

    Weaker than expected due to geopolitical and economic conditions. Negatively affected by a systems upgrade at largest distribution center in Europe.

    Mitigation: Distribution system upgrade is now behind us with performance improving in June.

    Higher Inflationary CostsH2 FY26

    Anticipate a lower gross profit and operating income margin compared to prior year due to higher inflationary costs and the fact that pricing efforts will lag cost increases.

    Mitigation: Strong cost mitigation in place with savings more than offsetting cost inflation. Assessing ability to pass through price by market and geography.

    What to watch in Q3 FY26

    5

    Back-to-School Season Performance

    next quarter
    CurrentSell-in strong, early sell-through in line or better than plan, taking share
    TargetFull season sales up mid-single digits

    Why it matters

    Back-to-school is an important season for ACCO Brands, impacting product sales and margins.

    We now expect sales of back-to-school products to be up mid-single digits for the full season.

    Q&A highlights

    7

    What are you seeing in back-to-school channels, inventory levels, and retailer approach?

    Early reads are positive with strong sell-in and sell-through in line or better than plan. ACCO Brands is taking market share, and inventory positions are good. Retailers are cautiously optimistic.

    “Our sell-in was strong. We see the sell-through or sellout of our products, again, early in the season to be in line or better than our plan. And our brands are taking share in the first few weeks of back-to-school.”

    asked by Greg Burns · answered by Thomas Tedford

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and Raised Outlook

    ACCO Brands reported Q2 sales and adjusted EPS above expectations, leading to a raised full-year outlook for both metrics. This performance was driven by strong results in the Americas segment, particularly North America back-to-school, and a solid contribution from the EPOS acquisition. The company's multi-year cost reduction program and focus on commercial excellence are yielding positive results, despite a cautious view for the second half due to seasonal mix and an uncertain global environment.

    02

    Americas Segment Strength

    The Americas segment saw a 6% sales increase, with comparable sales up 2%. This was primarily fueled by robust back-to-school placements in North America and strong growth in Mexico, where strategic changes in go-to-market, pricing, and product assortment have paid off. This strength helped offset weaker demand in Brazil and technology peripherals. The segment's adjusted operating income increased by $13 million, with margin improving 380 basis points to 21.2%, driven by volume and cost savings.

    03

    International Headwinds and EPOS Contribution

    The International segment experienced a 4% sales increase, but comparable sales were down approximately 9%. This decline was attributed to soft demand in EMEA and Australia due to geopolitical and economic factors, as well as disruptions from a distribution system upgrade in Europe, which is now resolved. The EPOS acquisition, however, provided a significant boost to international sales and is performing ahead of expectations, with $80 million in sales projected for 2026 and $15 million in cost synergies within 18 months.

    04

    Technology Peripherals Demand Softness

    The demand environment for technology peripherals was challenging in Q2, impacted by cautious end-user spending, elevated hardware costs, memory chip constraints, a soft console gaming market, and enterprise investment shifts towards AI. These trends are expected to persist in the second half. Despite the near-term difficulties, management remains optimistic about the long-term growth opportunities in these categories and continues to pursue organic and inorganic initiatives to expand market share.

    05

    Cost Optimization and Financial Position

    ACCO Brands is on track to achieve its targeted $100 million in cost reductions for the year, with cost savings more than offsetting inflationary pressures. The company maintains a strong financial position, with $205 million available under its revolver and a consolidated leverage ratio of 4.3x at quarter-end, well below debt covenants. They anticipate leverage to decrease to 3.7-3.9x by year-end, with no debt maturities until 2029, supporting their strategy to generate consistent free cash flow.

    06

    Tariff Refunds Update

    The company has submitted claims for $20 million in tariff refunds related to Phase 2, expected in 2026, and an additional $5 million claim for 2027. These potential benefits are not included in the current outlook, as they are accounted for as a gain contingency, only to be recorded upon assured receipt.

    AI-generated summary of the company’s earnings call. Not investment advice.