Energizer Holdings (NYSE:ENR) reported a 6.3% year-over-year drop in sales for FQ1, amounting to $717M in revenue.

During the quarter, organic sales declined by 7.4%, primarily attributed to a 7% volume decrease in the battery business due to earlier holiday orders compared to the previous year. Weaker performance at non-tracked channels and relatively flat pricing also contributed to the decline, resulting in a net decrease to organic sales of 0.4%.

On the positive side, the gross margin improvement was propelled by Project Momentum, which produced savings of approximately $16 million in the quarter. However, this benefit was partly offset by mix impacts, slightly increased product costs, and lower pricing.

Adjusted gross margin experienced a 50 basis points improvement, reaching 39.5% of sales, compared to 39.0% in the previous year. Earnings per share (EPS) stood at $0.59, surpassing the consensus of $0.57 but falling short of $0.72 a year ago.

CEO update: “We improved adjusted gross profit margin and delivered outstanding free cash flow, which has enabled us to meaningfully reduce debt for the sixth consecutive quarter. We continue to evaluate opportunities to further optimize our cost structure and simplify our operations to better leverage our global scale, and today we announced the expansion of Project Momentum and the savings expected under the program. I am confident these initiatives will further strengthen the company and advance our strategic priorities as we return to growth over the balance of the year.”

Looking ahead, Energizer (ENR) forecasts a Q2 EPS in the range of $0.65 to $0.70, compared to the consensus of $0.71. Organic revenue is anticipated to decline by 2% to 3% during the quarter. For the full year, Energizer (ENR) expects EPS of $3.10 to $3.30, against a consensus of $3.21, with organic revenue projected to remain flat or decrease by low single digits.