Core Insights - Newell Brands Inc. reported adjusted earnings per share of 24 cents for the second quarter, aligning with analyst expectations [1] - Quarterly sales reached $1.935 billion, reflecting a 4.8% decline year-over-year, which fell short of the analyst consensus estimate of $1.947 billion [1] - The company anticipates third-quarter adjusted EPS between 16 to 19 cents, below the consensus of 26 cents, and has revised its full-year 2025 adjusted EPS guidance down to 66 to 70 cents from 70 to 76 cents due to increased tariff-related inventory costs [2] Management Commentary - Chris Peterson, President and CEO, emphasized the company's progress towards becoming a world-class consumer products company, highlighting that net sales, core sales, normalized operating margin, and normalized EPS were all within the guidance ranges provided in the previous quarter [2] - The management expressed confidence in their strategy to enhance core sales growth, improve margins, and generate strong cash flow despite a challenging macroeconomic environment [2] Stock Performance and Analyst Ratings - Following the earnings announcement, Newell Brands shares increased by 5.4%, trading at $5.01 [3] - JP Morgan analyst Andrea Teixeira maintained an Overweight rating on Newell Brands but reduced the price target from $8 to $7 [5] - Canaccord Genuity analyst Brian McNamara also maintained a Buy rating while lowering the price target from $11 to $9 [5]

Core Insights - Newell Brands Inc. (NWL) reported a decline in net sales and earnings for Q2 2025, with normalized EPS of 24 cents, down 31.4% year over year, matching consensus estimates [1][9] - The company experienced a 4.8% decrease in net sales to $1.9 billion, attributed to lower core sales, business exits, and adverse foreign exchange impacts [2] - Despite margin improvements, the overall performance disappointed investors, leading to a 5% drop in share price during premarket trading [4] Financial Performance - Normalized gross margin increased by 80 basis points to 35.6%, marking the eighth consecutive quarter of year-over-year growth [3] - Normalized operating margin rose by 10 basis points to 10.7%, while normalized EBITDA was reported at $280 million, slightly down from $282 million in the previous year [3] - The company ended the quarter with cash and cash equivalents of $219 million, long-term debt of $4.5 billion, and total outstanding debt of $5.1 billion [11] Segment Performance - The Home & Commercial Solutions segment saw net sales of $892 million, a 7.3% decline year over year, driven by a 6.0% drop in core sales [7] - The Learning and Development segment reported net sales of $809 million, down 0.5% from the previous year, with core sales also declining by 0.5% [8] - The Outdoor and Recreation segment's net sales were $234 million, down 9.3% year over year, with core sales falling by 10.9% [10] Future Outlook - For Q3 2025, Newell Brands anticipates a decline in net and core sales between 4% and 2%, with normalized EPS expected to be between $0.16 and $0.19 [12] - The company revised its full-year 2025 guidance, projecting a net and core sales decline of 3% to 2%, and normalized EPS between $0.66 and $0.70 [13] - An incremental cash tariff cost of approximately $155 million is expected compared to 2024, leading to a revision in operating cash flow guidance to a range of $400 million to $450 million [13]

Core Insights - Newell Brands reported revenue of $1.94 billion for the quarter ended June 2025, reflecting a year-over-year decline of 4.8% and an EPS of $0.24, down from $0.36 in the same quarter last year [1] - The revenue was slightly below the Zacks Consensus Estimate by 0.47%, while the EPS met the consensus estimate [1] Financial Performance Metrics - Net sales in Learning and Development were $809 million, slightly below the average estimate of $814.23 million, with a year-over-year change of -0.5% [4] - Net sales in Outdoor and Recreation reached $234 million, exceeding the average estimate of $231.47 million, but showing a significant year-over-year decline of -9.3% [4] - Net sales in Home and Commercial Solutions were reported at $892 million, also below the average estimate of $899.3 million, with a year-over-year change of -7.3% [4] - Normalized Operating Income (Loss) for Corporate was reported at -$56 million, better than the average estimate of -$62.82 million [4] - Normalized Operating Income (Loss) for Outdoor and Recreation was $13 million, significantly above the average estimate of $2.12 million [4] - Normalized Operating Income (Loss) for Learning & Development was $207 million, slightly below the average estimate of $210.55 million [4] - Normalized Operating Income (Loss) for Home and Commercial Solutions was $44 million, below the average estimate of $64.84 million [4] Stock Performance - Over the past month, shares of Newell Brands have returned -3.9%, contrasting with the Zacks S&P 500 composite's increase of +2.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited statements show decreased sales and a significant drop in year-to-date net income [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Q2 net sales declined 4.8% to $1.94 billion, while six-month net income fell sharply by 75% to $9 million Key Financial Metrics | Financial Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,935M | $2,033M | $3,501M | $3,686M | | **Gross profit** | $685M | $699M | $1,188M | $1,203M | | **Operating income** | $171M | $163M | $192M | $179M | | **Net income** | $46M | $45M | $9M | $36M | | **Diluted EPS** | $0.11 | $0.11 | $0.02 | $0.09 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $11.51 billion, while total stockholders' equity slightly decreased to $2.69 billion Balance Sheet Summary | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $3,111M | $2,775M | | **Total assets** | $11,507M | $11,004M | | **Total current liabilities** | $2,779M | $2,437M | | **Long-term debt** | $4,535M | $4,508M | | **Total liabilities** | $8,815M | $8,253M | | **Total stockholders' equity** | $2,692M | $2,751M | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations turned negative to ($271 million) for the first six months, a reversal from the prior year Cash Flow Summary | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | ($271M) | $64M | | **Net cash used in investing activities** | ($92M) | ($84M) | | **Net cash provided by financing activities** | $382M | $78M | | **Increase in cash, cash equivalents and restricted cash** | $23M | $44M | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the 'Realignment Plan', a major debt refinancing, credit downgrades, and segment performance - The company is implementing an 'Organizational Realignment Plan' announced in January 2024 to strengthen commercial capabilities and reduce costs, with estimated restructuring charges between **$75 million and $90 million**[31](index=31&type=chunk) - In May 2025, the company issued **$1.25 billion of 8.500% senior notes** due 2028 and used the proceeds to redeem its 4.200% senior notes due 2026, resulting in a **$13 million loss** on debt extinguishment[40](index=40&type=chunk)[41](index=41&type=chunk) - During Q2 2025, Moody's and S&P downgraded the company's senior unsecured debt rating, which will increase annual interest expense by about **$5 million**[44](index=44&type=chunk) Segment Performance | Segment Performance (Three Months Ended June 30) | Net Sales 2025 | Net Sales 2024 | % Change | Operating Income 2025 | Operating Income 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Home and Commercial Solutions** | $892M | $962M | (7.3)% | $24M | $48M | | **Learning and Development** | $809M | $813M | (0.5)% | $202M | $205M | | **Outdoor and Recreation** | $234M | $258M | (9.3)% | $8M | ($11M) | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 4.8% Q2 sales decline, an ongoing turnaround plan, and negative operating cash flow [Overview and Business Strategy](index=25&type=section&id=Overview%20and%20Business%20Strategy) The company is executing a multi-year turnaround plan focused on growth, margin expansion, and cash flow - The company's key priorities for 2025 are returning to profitable top line growth, expanding margins, deleveraging the balance sheet, driving operational excellence, and strengthening its culture[99](index=99&type=chunk) - A key initiative is the 'Realignment Plan,' which involves creating a cross-functional brand management organization and centralizing functions to drive efficiency under a 'One Newell' approach[97](index=97&type=chunk)[101](index=101&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) The company is managing new U.S. tariffs, a major debt refinancing, and recent credit rating downgrades - The company anticipates an incremental cash tariff cost of approximately **$155 million in 2025** due to new U.S. tariffs, prior to any mitigating actions[105](index=105&type=chunk) - The company completed a debt offering of **$1.25 billion of 8.500% senior notes** due 2028 and used the proceeds to redeem its 4.200% senior notes due 2026[106](index=106&type=chunk) - Debt rating downgrades by Moody's and S&P in Q2 2025 will increase the company's annualized interest expense by approximately **$5 million**, effective in the fourth quarter[107](index=107&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 net sales fell 4.8% to $1.94 billion, though gross margin improved and operating income increased Consolidated Results (Q2) | Consolidated Results (Three Months Ended June 30) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $1,935M | $2,033M | (4.8)% | | **Gross margin** | 35.4% | 34.4% | +100 bps | | **Operating income** | $171M | $163M | 4.9% | | **Net income** | $46M | $45M | 2.2% | Consolidated Results (YTD) | Consolidated Results (Six Months Ended June 30) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $3,501M | $3,686M | (5.0)% | | **Gross margin** | 33.9% | 32.6% | +130 bps | | **Operating income** | $192M | $179M | 7.3% | | **Net income** | $9M | $36M | (75.0)% | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow was negative $271 million for the first half, a $335 million decline from the prior year Cash Flow Summary | Cash Flow Summary (Six Months Ended June 30) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Cash from operating activities** | ($271M) | $64M | ($335M) | | **Cash used in investing activities** | ($92M) | ($84M) | ($8M) | | **Cash from financing activities** | $382M | $78M | $304M | - At June 30, 2025, the company had net availability of approximately **$459 million** under its $1.0 billion Credit Revolver[145](index=145&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There were no material changes to the company's market risk disclosures from its 2024 Annual Report - There have been no material changes from the market risk information previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[151](index=151&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective as of June 30, 2025**[153](index=153&type=chunk) - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025[154](index=154&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from the financial statement footnotes - Information on legal proceedings is incorporated by reference from the Notes to Condensed Consolidated Financial Statements (Footnote 14) in Part I of this report[156](index=156&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since its 2024 Annual Report - There have been no material changes in risk factors from those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[157](index=157&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company purchased 81,254 shares to satisfy employee tax obligations from vested stock units Issuer Purchases of Equity Securities | Calendar Month | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April | — | $ — | | May | 34,548 | $5.85 | | June | 46,706 | $5.30 | | **Total** | **81,254** | **$5.54** | - Shares purchased during the quarter were acquired to satisfy employees' tax withholding obligations in connection with vesting of restricted stock units, not as part of a publicly announced buyback plan[158](index=158&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement this quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[159](index=159&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including material contracts and required certifications

Financial Data and Key Metrics Changes - Normalized operating margin increased by 10 basis points year-over-year to 10.7%, with all three business segments showing positive results for the first time since 2022 [6][22] - Normalized gross margin rose by 80 basis points to 35.6%, marking the highest rate in four years and the eighth consecutive quarter of year-over-year expansion [7][22] - Normalized earnings per share (EPS) reached $0.24, at the top end of the guidance range, despite a higher than expected tax rate [8][22] - Core sales for the second quarter decreased by 4.4%, while net sales contracted by 4.8% due to unfavorable foreign exchange and business exits [21][22] Business Line Data and Key Metrics Changes - The international business, accounting for nearly 40% of total sales, achieved positive core sales growth for the sixth consecutive quarter [22] - The Writing and Home Fragrance segments reported growth in core sales, while the Baby business also showed positive trends [22][49] Market Data and Key Metrics Changes - Market growth was estimated to be down in low single digits for 2025, with Newell Brands largely maintaining market share during the first half of the year [9][10] - The company expects subdued market growth as certain consumer cohorts remain under pressure [10] Company Strategy and Development Direction - The company is focused on improving front-end capabilities and has strengthened distribution, innovation, and marketing plans for the second half of the year [10][11] - Newell Brands is positioned to benefit from global tariff-driven trade realignment, leveraging its North American manufacturing capabilities [11][12] - A significant investment in marketing is planned for 2025, with expectations of higher returns on investment due to improved marketing capabilities [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the mid- to long-term trajectory of the U.S. and global economy, while remaining cautious in the short term due to inflation and high interest rates [17][18] - The company updated its core sales guidance to reflect category growth expectations at the low end of the prior range, offset by better foreign exchange [18][27] Other Important Information - The company redeemed $1.25 billion in outstanding bonds, indicating strong investor support for its corporate strategy [24] - ERP harmonization efforts are on track to be completed by 2026, following successful integrations in the second quarter [25] Q&A Session Summary Question: Comments on back-to-school performance and exit rates across categories - Management noted that it is early to assess back-to-school performance but expressed confidence in sell-in and setup heading into the season, with record high fill rates and secured exclusivity on key products [36][38] Question: Core sales moving in the wrong direction despite innovation - Management highlighted sequential progress in core sales growth, with improvements noted in specific segments like Writing and Baby, while acknowledging challenges in broader category growth dynamics [47][48] Question: Drivers of expected core sales improvement in Q4 - Management indicated that tariff distribution wins and significant innovation launches, particularly for Yankee Candle, are expected to drive improvement in Q4 [56][58] Question: Impact of retailer inventory destocking and competitive pricing response - Management observed some impact from inventory destocking due to direct import issues but noted that overall retail inventories remain in good shape [82][83]

Financial Data and Key Metrics Changes - Normalized operating margin increased by 10 basis points year-over-year to 10.7%, with all three business segments showing positive results for the first time since 2022 [6][21] - Normalized gross margin rose by 80 basis points to 35.6%, marking the highest rate in four years and the eighth consecutive quarter of year-over-year expansion [7][21] - Normalized earnings per share (EPS) reached $0.24, at the top end of the guidance range, despite a higher than expected tax rate [7][23] - Core sales for the second quarter decreased by 4.4%, while net sales contracted by 4.8% due to unfavorable foreign exchange and business exits [20][21] - First half core sales for 2025 were down 3.4%, an improvement compared to the previous year [8] Business Line Data and Key Metrics Changes - The international business, accounting for nearly 40% of total sales, achieved positive core sales growth for the sixth consecutive quarter [20] - The Writing and Home Fragrance businesses both experienced core sales growth [21] - The Baby business showed strong core sales growth in the first quarter, with continued positive trends in the second quarter [39] Market Data and Key Metrics Changes - Market growth was estimated to be down in low single digits for 2025, with Newell Brands largely maintaining market share during the first half of the year [8] - The company noted that certain consumer cohorts remain under pressure, impacting overall market growth expectations [9] Company Strategy and Development Direction - The company is focused on improving front-end capabilities and strengthening distribution, innovation, and marketing plans [9] - Newell Brands is positioned to benefit from global tariff-driven trade realignment, with over half of U.S. sales manufactured domestically [10] - A significant investment of nearly $2 billion in the North American production system since 2017 has provided untapped capacity to meet strategic customer needs [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the mid- to long-term trajectory of the U.S. and global economy, while remaining cautious in the short term due to inflation and high interest rates [15][16] - The company updated its core sales guidance to reflect short-term category softness, while also anticipating better foreign exchange impacts [17] - Management expects sequential top-line progress to resume, driven by distribution gains, innovation launches, and marketing programs [19] Other Important Information - The company fully redeemed $1.25 billion of outstanding bonds, indicating strong investor support for its corporate strategy [24] - Two additional ERP integrations were successfully completed, moving towards a harmonized system by 2026 [25] Q&A Session Summary Question: Can you comment on the back-to-school category performance and exit rates across all categories? - Management indicated it is early to assess consumer off-take for back-to-school, but they feel confident about their setup and sell-in [36][37] Question: With core sales moving in the wrong direction, what is driving that? - Management noted sequential progress in core sales growth, with improvements from previous periods, and emphasized the timing of retailer shipments and category growth dynamics [46][49] Question: What drives the expected material inflection in Q4 core sales? - Management highlighted tariff distribution wins, significant innovation launches, and retailer shelf resets as key drivers for expected improvements in Q4 [57] Question: How is the retailer environment affecting inventory levels and repurchasing? - Management observed some impact from inventory destocking, particularly in direct import business, but overall retail inventories remain in good shape [80][81]

Group 1: Earnings Performance - Newell Brands reported quarterly earnings of $0.24 per share, matching the Zacks Consensus Estimate, but down from $0.36 per share a year ago [1] - The company had a surprise of +85.71% compared to the expected loss of $0.07 per share, as it actually posted a loss of $0.01 [1] - Over the last four quarters, Newell Brands has surpassed consensus EPS estimates two times [1] Group 2: Revenue Performance - The company posted revenues of $1.94 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.47%, and down from $2.03 billion year-over-year [2] - Newell Brands has topped consensus revenue estimates just once over the last four quarters [2] Group 3: Stock Performance and Outlook - Newell Brands shares have declined approximately 43.7% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The company's earnings outlook will be crucial for understanding future stock movements, with current consensus EPS estimate at $0.26 for the coming quarter and $0.69 for the current fiscal year [4][7] - The Zacks Rank for Newell Brands is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 4: Industry Context - The Consumer Products - Staples industry, to which Newell Brands belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Newell Brands achieved Q2 2025 net sales, core sales, normalized operating margin, and normalized EPS within guidance, marked by significant gross margin expansion and successful debt refinancing [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) The company met its Q2 2025 financial guidance, demonstrating strong gross margin expansion and enhanced financial flexibility through debt refinancing - Achieved net sales, core sales, normalized operating margin, and normalized EPS within guidance ranges[1](index=1&type=chunk) - Gross margin expanded by **100 basis points** year-over-year to **35.4%**, marking the **eighth consecutive quarter** of **100+ basis point expansion** and the **highest rate in four years**[1](index=1&type=chunk)[4](index=4&type=chunk) - Refinanced **$1.25 billion of debt**, which was **four-times oversubscribed**, indicating strong investor support for the new corporate strategy[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Chris Peterson and CFO Mark Erceg highlighted the company's strategic progress, operational agility, and improved financial health - CEO Chris Peterson stated the company is on track to **improve core sales growth**, **drive margin improvement**, and **generate strong cash flow** amidst a challenging macroeconomic environment[1](index=1&type=chunk) - CFO Mark Erceg highlighted the **100 basis point gross margin expansion** and **enhanced financial flexibility** through the **oversubscribed $1.25 billion debt refinancing**[1](index=1&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Newell Brands reported a decline in net sales but achieved improved gross and operating margins due to productivity and restructuring savings, while managing increased interest expenses [Operating Results](index=1&type=section&id=Operating%20Results) Net sales declined in Q2 2025, but gross and operating margins improved due to cost management, while net income saw a slight increase and normalized EPS decreased | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | Net Sales | $1.9B | $2.033B | (4.8)% | | Core Sales Decline | 4.4% | - | - | | Gross Margin | 35.4% | 34.4% | +1.0 pp | | Normalized Gross Margin | 35.6% | 34.8% | +0.8 pp | | Operating Margin | 8.8% | 8.0% | +0.8 pp | | Normalized Operating Margin | 10.7% | 10.6% | +0.1 pp | | Net Income | $46M | $45M | +2.2% | | Normalized Net Income | $101M | $148M | (31.7)% | | Diluted EPS | $0.11 | $0.11 | 0% | | Normalized Diluted EPS | $0.24 | $0.35 | (31.4)% | | Normalized EBITDA | $280M | $282M | (0.7)% | - Operating margin **improved** to **8.8%** (normalized **10.7%**) primarily due to savings from restructuring actions and lower restructuring-related charges[6](index=6&type=chunk) - Net interest expense **increased** to **$82 million** from **$78 million** in the prior year period[7](index=7&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) The company experienced a year-to-date operating cash outflow, refinanced debt, and ended Q2 2025 with increased debt and reduced cash | Metric | YTD Q2 2025 | YTD Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :----- | | Operating Cash Flow | $(271)M | $64M | $(335)M | | Debt Outstanding (End of Q2) | $5.1B | $5.0B | +$0.1B | | Cash & Cash Equivalents (End of Q2) | $219M | $382M | $(163)M | - Operating cash outflow was impacted by a **large use of working capital**, **cash tariff costs**, and a **lower cash bonus payout** in the prior year[10](index=10&type=chunk) - Refinanced **senior unsecured notes** due 2026 with **$1.25 billion** of **8.50% senior unsecured notes** due 2028[11](index=11&type=chunk) [Operating Segment Results](index=2&type=section&id=Operating%20Segment%20Results) Segment performance varied in Q2 2025, with Home & Commercial Solutions seeing a significant decline, Learning & Development remaining stable, and Outdoor & Recreation improving from a loss to a profit [Home & Commercial Solutions](index=2&type=section&id=Home%20%26%20Commercial%20Solutions) Home & Commercial Solutions experienced a decline in net sales and a significant drop in normalized operating income and margin | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | Net Sales | $892M | $962M | (7.3)% | | Core Sales Decline | 6.0% | - | - | | Normalized Operating Income | $44M | $70M | (37.1)% | | Normalized Operating Margin | 4.9% | 7.3% | (2.4) pp | - Core sales **increased** in Home Fragrance but **declined** in Commercial and Kitchen businesses[12](index=12&type=chunk) [Learning & Development](index=2&type=section&id=Learning%20%26%20Development) Learning & Development reported a slight net sales decline and a modest decrease in normalized operating income and margin | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | Net Sales | $809M | $813M | (0.5)% | | Core Sales Decline | 0.5% | - | - | | Normalized Operating Income | $207M | $212M | (2.4)% | | Normalized Operating Margin | 25.6% | 26.1% | (0.5) pp | - Core sales **increased** in the Writing business but **decreased** in the Baby business[13](index=13&type=chunk) [Outdoor & Recreation](index=2&type=section&id=Outdoor%20%26%20Recreation) Outdoor & Recreation experienced the largest net sales decline but significantly improved its normalized operating income from a loss to a profit | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | Net Sales | $234M | $258M | (9.3)% | | Core Sales Decline | 10.9% | - | - | | Normalized Operating Income | $13M | $(1)M | NM | | Normalized Operating Margin | 5.6% | (0.4)% | +6.0 pp | - Core sales **decline** of **10.9%** was partially offset by favorable foreign exchange[14](index=14&type=chunk) [Outlook](index=3&type=section&id=Outlook) Newell Brands provided its Q3 and updated full-year 2025 guidance, reflecting anticipated tariff costs and projecting continued sales declines with stable normalized margins [Q3 and Full Year 2025 Guidance](index=3&type=section&id=Q3%20and%20Full%20Year%202025%20Guidance) The company initiated Q3 2025 and updated full-year 2025 outlooks, projecting sales declines and specific ranges for normalized operating margin and EPS | Metric | Q3 2025 Outlook | Updated Full Year 2025 Outlook | | :---------------------- | :-------------- | :----------------------------- | | Net Sales | (4%) to (2%) | (3%) to (2%) | | Core Sales | (4%) to (2%) | (3%) to (2%) | | Normalized Operating Margin | 9.1% to 9.5% | 9.0% to 9.5% | | Normalized EPS | $0.16 to $0.19 | $0.66 to $0.70 | - Updated full year 2025 operating cash flow outlook to a range of **$400 million to $450 million** due to higher tariff costs on inventory[16](index=16&type=chunk) [Tariff Impact](index=3&type=section&id=Tariff%20Impact) The updated 2025 outlook incorporates significant incremental cash tariff costs and a substantial gross profit impact before mitigation - Estimated incremental cash tariff cost for full year 2025 is approximately **$155 million** compared to 2024[15](index=15&type=chunk) - Gross profit impact from tariffs, prior to mitigating actions, is estimated at approximately **$105 million**, or **$0.21 per share** after tax[15](index=15&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures to provide a clearer view of underlying business performance and outlines recent changes in normalization practices [Explanation and Use](index=3&type=section&id=Explanation%20and%20Use) Newell Brands utilizes non-GAAP measures to offer a consistent view of underlying sales trends and core operational performance, excluding non-recurring or non-operational

Core Insights - Newell Brands Inc. (NWL) is anticipated to experience a year-over-year decline in both revenue and earnings for Q2 2025, with projected revenues of $1.94 billion, reflecting a 4.4% decrease from the previous year [1][10] - The consensus estimate for earnings per share (EPS) is set at 24 cents, indicating a significant decline of 33.33% compared to the same quarter last year [2][10] - The company has faced challenges due to a turbulent macroeconomic environment, including persistent inflation, geopolitical volatility, and changing retail dynamics, which have negatively impacted consumer sentiment and discretionary spending [3] Revenue and Earnings Projections - The consensus estimate for quarterly revenues is $1.94 billion, down 4.4% year-over-year [1][10] - The expected EPS is 24 cents, down from 35 cents in the year-ago quarter [5][10] - Management had previously projected a decline in net and core sales of 3%-5% for Q2 2025 [4] Segment Performance - The Outdoor & Recreation segment is expected to see a net sales decline of 11.2% [5] - The company has been affected by soft demand in this segment, along with foreign currency headwinds and the impact of business exits [3][10] Strategic Initiatives - Newell has successfully reduced its reliance on Chinese imports, with only 15% of finished goods now sourced from China, down from 35% a few years ago [7] - The company has made significant investments in U.S. manufacturing and automation to create a more resilient supply chain [7] - Positive developments include enhanced front-end commercial capabilities, innovation, and a streamlined organizational structure, which may help offset inflation and currency fluctuations [6] Valuation and Market Performance - Newell is currently trading at a forward 12-month price-to-earnings ratio of 8.63X, which is below its five-year high of 16.88X and the industry average of 19.97X, indicating attractive valuation for investors [11] - The stock has gained 15% over the past three months, outperforming the industry, which saw a decline of 2.4% [14]

Core Viewpoint - Newell Brands (NWL) is expected to report a year-over-year decline in earnings due to lower revenues, with the consensus outlook being crucial for assessing the company's earnings picture [1][3]. Earnings Expectations - The upcoming earnings report is anticipated to show earnings of $0.24 per share, reflecting a decline of 33.3% year-over-year, and revenues are projected to be $1.94 billion, down 4.4% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.64% higher in the last 30 days, indicating a slight bullish sentiment among analysts regarding the company's earnings prospects [4]. Earnings Surprise Prediction - Newell Brands has a positive Earnings ESP of +6.28%, suggesting that analysts have recently become more optimistic about the company's earnings, which may lead to beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Newell Brands was expected to post a loss of $0.07 per share but instead reported a loss of -$0.01, resulting in a surprise of +85.71%. Over the last four quarters, the company has beaten consensus EPS estimates three times [13][14]. Investment Considerations - While Newell Brands appears to be a compelling earnings-beat candidate, investors should consider other factors that may influence stock performance beyond just earnings results [15][17].