Company Performance & Strategy - Newell's net sales were $7.6 billion [9] - Approximately 90% of sales are attributed to 25 brands [9] - International sales account for 38% of total sales [9] - In 2024, the company implemented a new corporate strategy based on a capability assessment conducted in 2023 [17, 39, 102, 146] - The company is focused on its top 10 brands [30] Financial Improvements & Outlook - TTM normalized EBITDA was $884 million as of Q1 2025 [9] - TTM Normalized Gross Margin percentage is 31.9%, reflecting a +610 bps increase [113] - Operating cash flow improved by over $750 million from FY22 to FY24 [138] - The company reduced net debt by approximately $175 million in 2024 [138] - The leverage ratio decreased from 5.8x in FY23 to 4.9x in FY24 [140] Supply Chain & Cost Optimization - China to US sourcing has been reduced from 35% to less than 10% by the end of 2025 [91] - The company has reduced its supply base by approximately 45% since 2020 [122] - Transportation costs decreased by 40 bps in 2024 [114, 126] - Headcount has been reduced by 14% since 2022 [132]

Group 1 - Investors in Newell Brands Inc. (NWL) should monitor stock movements due to high implied volatility in the options market, particularly the Sep 19, 2025 $2 Call option [1] - Implied volatility indicates market expectations for significant price movement, suggesting potential upcoming events that could lead to a rally or sell-off [2] - Newell Brands currently holds a Zacks Rank 3 (Hold) in the Consumer Products - Staples industry, which is in the bottom 36% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, no analysts have raised earnings estimates for Newell Brands, while six analysts have lowered their estimates, reducing the Zacks Consensus Estimate from 32 cents to 24 cents per share [3] - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on such options, hoping the stock does not move as much as anticipated [4]

Core Insights - Newell Brands Inc. (NWL) is enhancing efficiency and profitability through a productivity mechanism that focuses on automation, cost management, and optimizing category mix [1][10] - The company is implementing strategic initiatives to achieve productivity gains, including managing revenue growth and improving supply-chain performance [1][10] Operational Strategy - Key pillars of Newell's operational strategy include optimizing category mix, managing revenue growth, streamlining SKUs, and improving supply-chain performance [1][10] - The company is prioritizing investments in innovation, brand-building, and go-to-market excellence to strengthen commercial capabilities and improve organizational efficiency [2] Financial Performance - In Q1 2025, normalized gross margin expanded by 150 basis points, marking the seventh consecutive quarter of year-over-year growth [3] - Gross productivity savings and pricing actions have successfully offset inflation and foreign currency impacts, with expectations for a 120 basis point expansion in normalized gross margin for 2025 [3][5] Organizational Changes - Newell's organizational realignment aims to enhance front-end commercial capabilities, sharpen consumer insights, and strengthen brand performance [4] - The company is focused on driving operational efficiencies, reducing complexity, and reallocating funds for reinvestment through consumer-led innovations [4] Competitive Landscape - Major competitors in productivity improvements include Procter & Gamble, Colgate-Palmolive, and Clorox, all of which are advancing productivity initiatives to counter inflation and enhance margins [6][7][8][9] Price Performance and Valuation - Newell's shares have decreased by 45.7% year-to-date, contrasting with a 0.4% drop in the industry [13] - The company trades at a forward price-to-earnings ratio of 7.63X, significantly lower than the industry average of 20.46X [14] Earnings Estimates - The Zacks Consensus Estimate for NWL's EPS indicates year-over-year growth of 1.5% for 2025 and 0.9% for 2026, with stable estimates for 2025 and an upward revision for 2026 in the past 30 days [15]

Core Insights - Newell Brands Inc. reported an increase in operating income due to improvements in productivity and recent restructuring actions [1] - The company announced potential new initiatives to be implemented in 2025, along with new products in the L&D segment [1] Financial Performance - The increase in operating income indicates a positive trend in the company's financial health, driven by operational efficiencies [1] - The focus on productivity improvements suggests a strategic shift towards enhancing operational capabilities [1] Future Outlook - New initiatives planned for 2025 may signal a forward-looking approach to growth and innovation within the company [1] - The introduction of new products in the L&D segment could diversify the company's offerings and potentially increase market share [1]

Summary of Newell Brands Conference Call Company Overview - Newell Brands is a $7.6 billion company with approximately $900 million in trailing twelve-month EBITDA [4][46] - The company operates 25 brands that account for 90% of sales, with 62% of revenue generated in the US and 38% internationally [4][5] Core Business Segments - Newell's portfolio is divided into three segments: Home and Commercial, Learning and Development, and Outdoor and Recreation [5] - Key brands include Rubbermaid, Graco, Coleman, Sharpie, Papermate, Yankee Candle, and Oster [5] Strategic Initiatives - A new corporate strategy was implemented in February 2023, focusing on capability assessment and operational improvements [6][46] - The strategy aims to enhance consumer understanding, innovation, brand building, and retail expertise [9][10] - Significant changes included a consumer-first global brand management organization and a centralized operating model [11][12] Financial Performance - Gross margins have improved for seven consecutive quarters, reaching 34.4%, a 610 basis point increase [47][48] - The company has seen strong operating cash flow and expects continued value creation [46][47] - Normalized EBITDA growth of over 15% was reported, with a trailing twelve-month EBITDA of $900 million [59] Market Trends and Consumer Insights - Core sales trends have improved, particularly in the Learning and Development segment and international markets, which have shown positive growth for five consecutive quarters [46][47] - The company aims to grow faster than market growth by focusing on innovation and targeting higher-income consumers [66][67] Supply Chain and Operational Efficiency - Newell has reduced its supplier base by approximately 45% since 2020, aiming for further reductions to improve procurement efficiency [51][52] - The global fill rate exceeded 95%, the highest in the company's history, with a significant reduction in customer penalties and shortages [53][54] - The company has invested over $2 billion in capital to automate its 42 manufacturing plants, improving efficiency [42][49] Innovation and Product Development - New product launches include innovations in the Sharpie and Rubbermaid brands, with a focus on higher price point segments [25][34][35] - The company is actively pursuing new market segments, such as wet erase markers and premium candles, to drive growth [27][34] Future Outlook - Newell Brands is positioned for continued growth with a focus on operational excellence, innovation, and market share expansion [46][62] - The company plans to maintain a dividend payout ratio of 30-35% while pursuing high-return internal growth opportunities [61] Additional Insights - The company has resumed purchases from China, particularly in the baby gear sector, while also gaining traction in tariff-advantaged categories [70][71] - Retailers are increasingly shifting towards US manufacturing to mitigate supply chain risks, which Newell is leveraging in its sales strategy [71]

Core Insights - Multiple well-known consumer goods companies have reported their latest earnings, showing a mixed performance across the sector [1] Group 1: Earnings Reports - Procter & Gamble reported Q3 earnings for the period ending March 31, 2025, with net sales of $19.776 billion, down from $20.195 billion year-over-year. Operating profit was $4.558 billion, slightly up from $4.460 billion, and net profit was $3.769 billion, compared to $3.754 billion last year [1] - Colgate-Palmolive's Q1 earnings for 2025 showed net sales of $4.911 billion, down from $5.065 billion year-over-year. Operating profit increased to $1.076 billion from $1.047 billion, while net profit rose to $690 million from $683 million [1] - Kimberly-Clark reported Q1 2025 net sales of $4.840 billion, a decline of 6% from $5.149 billion. Operating profit decreased by 9.8% to $769 million, and net profit fell by 12.4% to $567 million [1] - Estée Lauder's Q3 earnings revealed a significant drop in net profit to $159 million from $330 million year-over-year, with net sales declining to $3.55 billion from $3.94 billion, a 10% decrease [1] - Coty reported Q3 earnings with net revenue of $1.299 billion, down from $1.386 billion year-over-year, and an operating loss of $280 million compared to a profit of $77.8 million last year [1] Group 2: Regional Performance - Shiseido's Q1 2025 net sales were ¥228.2 billion, down 21.2% from ¥249.5 billion, while operating profit improved to ¥7 billion from an operating loss of ¥8.7 billion [1] - LG Household & Health Care reported Q1 sales of ₩1,698 billion, down from ₩1,729 billion year-over-year, with operating profit decreasing to ₩142 billion from ₩151 billion [1] - Amorepacific Group's Q1 revenue increased to ₩1,164.8 billion from ₩1,006.8 billion year-over-year, with operating profit rising to ₩128.9 billion from ₩83 billion [1] Group 3: Other Notable Earnings - Natura & Co reported Q1 net revenue of R$6.679 billion, up from R$4.583 billion year-over-year, with a net loss of R$151 million compared to a net loss of R$935 million last year [1] - Herbalife's Q1 global net sales were $1.222 billion, down from $1.264 billion year-over-year, but net profit increased to $50.4 million from $24.3 million [1] - Proya's Q1 revenue reached ¥2.359 billion, an increase of 8.13%, with net profit growing by 28.87% to ¥390 million [1]

Core Insights - Sharpie continues its Rookie of the Year program, featuring top draft picks Ashton Jeanty and Tetairoa McMillan, who will use Sharpie S-Gel pens for signing their rookie contracts [1][5][8] Company Overview - Sharpie is part of Newell Brands, a leading global consumer goods company with a diverse portfolio of well-known brands [10] - Sharpie has been recognized for its precision and performance in writing instruments since the introduction of its first pen-style permanent marker in 1964 [9] Product Highlights - The Sharpie S-Gel pen is designed with no-smear, no-bleed technology, making it suitable for high-performance needs, particularly for athletes [1][8] - The S-Gel pens are noted for their bold, vibrant ink, which aligns with the qualities of the athletes using them [5][8] Marketing and Brand Positioning - The partnership with Jeanty and McMillan emphasizes Sharpie's commitment to being part of significant moments in the athletes' careers, starting with their contract signings [7][8] - Sharpie's brand management highlights the importance of high-performance tools for high-performing individuals, reinforcing the brand's image in the sports community [7][8]

Core Insights - Newell Brands Inc. (NWL) reported a narrower-than-expected loss per share of one cent for Q1 2025, compared to the Zacks Consensus Estimate of a loss of seven cents per share, although both metrics declined year over year [1][2] - Net sales decreased by 5.3% year over year to $1.6 billion, surpassing the consensus estimate of $1.5 billion, with core sales falling by 2.1% [2][3] - The normalized gross margin improved by 150 basis points to 32.5%, marking the seventh consecutive quarter of year-over-year growth, while the normalized operating margin decreased by 30 basis points to 4.5% [3] Financial Performance - Normalized EBITDA for Q1 2025 was $136 million, down from $152 million in the same quarter last year, with a model prediction of a 33.6% decline in adjusted EBITDA [3] - NWL's shares fell by 3.3% during trading hours due to disappointing Q1 results and tariff concerns, with a significant 47.5% decline over the past three months compared to a 1% growth in the industry [4] Segment Performance - The Home & Commercial Solutions segment reported net sales of $812 million, a 9.1% decrease year over year, with core sales down 5% due to declines in various business areas [5] - The Learning and Development segment saw net sales increase by 2.3% to $572 million, with core sales growing by 4.2%, offsetting foreign exchange impacts [6] - The Outdoor and Recreation segment's net sales fell by 9.5% to $182 million, with core sales down 7.1%, although it exceeded the estimate of $176.5 million [7] Financial Position - At the end of Q1 2025, NWL had cash and cash equivalents of $233 million, long-term debt of $4.5 billion, and total outstanding debt of $4.9 billion, with shareholders' equity at $2.7 billion [8] - The company utilized $213 million in cash from operating activities during the quarter [8] Outlook - Management revised the core sales and operating cash flow outlook for 2025, factoring in various tariffs, including a 20% IEEPA tariff on China and other global tariffs [9] - If the 125% tariff on China remains in effect, it could reduce 2025 normalized EPS by nearly 20 cents, although mitigating efforts may halve this impact [10] - The company anticipates a sales decline of 2-4% year over year, with core sales expected to decrease by 1-3% [11] - For Q2 2025, net sales are projected to decline by 3-5%, with normalized EPS expected to be in the range of 21-24 cents, down from 36 cents in the previous year [12]

Core Viewpoint - Newell Brands reported a revenue decline of 5.3% year-over-year for Q1 2025, with a revenue of $1.57 billion, slightly exceeding analyst expectations [1]. Financial Performance - Revenue for the quarter was $1.57 billion, down from the previous year, but above the Zacks Consensus Estimate of $1.55 billion, resulting in a surprise of +1.23% [1]. - Earnings per share (EPS) was reported at -$0.01, an improvement from $0.00 in the same quarter last year, with an EPS surprise of +85.71% against a consensus estimate of -$0.07 [1]. Segment Performance - Home and Commercial Solutions net sales were $812 million, below the estimated $817.89 million, reflecting a year-over-year decline of -9.1% [4]. - Outdoor and Recreation net sales reached $182 million, slightly above the estimated $179.14 million, but still down -9.5% year-over-year [4]. - Learning and Development net sales were $572 million, exceeding the estimated $547.41 million, marking a year-over-year increase of +2.3% [4]. Operating Income - Normalized Operating Income for Home and Commercial Solutions was $20 million, below the average estimate of $34.78 million [4]. - Corporate Normalized Operating Loss was reported at -$52 million, better than the estimated -$62.76 million [4]. - Normalized Operating Income for Learning & Development was $103 million, closely matching the estimate of $103.44 million [4]. Stock Performance - Newell Brands' shares have declined -16.3% over the past month, contrasting with the Zacks S&P 500 composite's slight decline of -0.2% [3]. - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3].

Financial Performance - Net sales for Q1 2025 decreased by 5.3% to $1,566 million compared to $1,653 million in Q1 2024, impacted by soft global demand and net distribution losses [106]. - Gross profit remained flat at $503 million, with gross margin improving to 32.1% from 30.5% in the prior year, driven by productivity and pricing actions [108]. - Operating income increased by 31.3% to $21 million in Q1 2025, up from $16 million in Q1 2024, reflecting benefits from restructuring actions and lower related charges [111]. - Interest expense rose by 2.9% to $72 million due to higher interest rates, with the weighted average interest rate increasing to approximately 6.0% [112]. - The income tax benefit for Q1 2025 was $18 million, compared to $51 million in Q1 2024, with an effective tax rate of 32.7% [113]. Strategic Initiatives - The company is focused on returning to profitable top-line growth through product innovation and international market penetration [99]. - The turnaround plan initiated in 2023 aims to improve top-line growth, expand margins, and enhance cash flow [94]. - The company is addressing global challenges such as shifting consumer preferences and macroeconomic volatility while executing its strategic priorities for 2025 [96]. - The Realignment Plan is designed to strengthen front-end commercial capabilities and unlock operational efficiencies [97]. Sales Performance by Segment - Home and Commercial Solutions net sales decreased by 9.1% to $812 million for the three months ended March 31, 2025, compared to $893 million in the prior year, impacted by soft demand and distribution losses [115]. - Learning and Development net sales increased by 2.3% to $572 million, driven by growth in the Baby business, while the Writing business faced a decline due to soft demand [117]. - Outdoor and Recreation net sales decreased by 9.5% to $182 million, with a 19% decline in the U.S. market, although international markets improved by approximately 11% [119]. - The Company reported an operating loss of $2 million for Home and Commercial Solutions, a decrease from an operating income of $16 million in the prior year, primarily due to lower gross profit [116]. Cash and Liquidity - The Company had cash and cash equivalents of approximately $233 million as of March 31, 2025, with $185 million held by non-U.S. subsidiaries [123]. - Cash used in operating activities was $(213) million for the three months ended March 31, 2025, a decrease of $245 million compared to the prior year [124]. - The Company plans to refinance its $1.2 billion senior notes maturing on April 1, 2026, to increase liquidity, although there are no assurances that favorable terms will be available [121]. - Moody's downgraded the Company's senior unsecured debt rating to "B1," resulting in an expected increase in interest expense of approximately $6 million annually [130]. - The Company maintains a $1.0 billion senior secured revolving credit facility with $870 million of availability based on pledged collateral as of March 31, 2025 [128]. - The Company was in compliance with all of its debt covenants as of March 31, 2025 [131].