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].

Newell Brands (NWL) came out with a quarterly loss of $0.01 per share versus the Zacks Consensus Estimate of a loss of $0.07. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 85.71%. A quarter ago, it was expected that this consumer products company would post earnings of $0.14 per share when it actually produced earnings of $0.16, delivering a surprise of 14.29%.Over the last four quarters, ...

Financial Data and Key Metrics Changes - The company reported a core sales decline of 2.1%, which was at the high end of the guidance range, reflecting new product innovation and some pricing benefits [27][32] - Normalized gross margin increased by 150 basis points to 32.5%, marking the seventh consecutive quarter of year-over-year improvement [28][34] - Normalized operating margin was 4.5%, exceeding the guidance range despite increased advertising and promotion investments [34] - The company recorded a normalized diluted earnings per share loss of $0.01, which was $0.05 to $0.08 above the guidance range [35] Business Line Data and Key Metrics Changes - The Learning and Development segment and the International business, which represent nearly 40% of total sales, posted positive core sales growth for the last five consecutive quarters [28][33] - The first quarter net sales included about 2.5 points of currency headwind and just over half a point from category exits [28][33] Market Data and Key Metrics Changes - The company maintained its net sales guidance for the year but moderated expectations for category growth from flat to down 1% to 2% due to lower consumer confidence levels [17][44] - The foreign exchange outlook improved by one to two percentage points based on current rates [19] Company Strategy and Development Direction - The company is focused on product innovation and has rebuilt its multiyear innovation funnel, with new products set to launch in the second half of the year [7][8] - The company believes it is well-positioned to benefit from global trade realignment due to proactive sourcing strategies and investments in domestic manufacturing [9][10] - The company plans to reduce dependency on sourced finished goods from China, aiming to lower this to 10% by the end of 2025 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic operating environment and emphasized the importance of their domestic manufacturing capabilities [26][45] - The company expects to fully offset the impact of certain tariffs through proactive actions and has affirmed its 2025 financial outlook for net sales, normalized operating margin, and normalized earnings per share [41][45] - Management acknowledged the challenges posed by the additional 125% China tariff but indicated that they have plans to mitigate its impact [46] Other Important Information - The company has made significant investments in U.S. manufacturing, totaling nearly $2 billion since the 2017 Tax Cuts and Jobs Act, which has enhanced its competitive position [13][14] - The company has a strong pipeline of new products and is actively engaging with retailers to shift their sourcing from China to U.S. or Mexican manufacturing [66] Q&A Session Summary Question: Retail destocking and tariff mitigation efforts - Management noted that they have not seen significant changes in retailer inventory levels in Q1 and are adjusting their core sales guidance out of caution due to macroeconomic forecasts [52][53] - They have taken proactive actions to mitigate the impact of tariffs, particularly in the baby gear category, which is their biggest exposure [54][56] Question: Leveraging U.S. capacity and private label considerations - Management clarified that they are not set up to produce private label products but are encouraging retailers to replace private label items with their branded products, leveraging U.S. manufacturing advantages [63][66] Question: Guidance and market growth expectations - Management explained that while forecasting market growth is challenging, they believe providing guidance is important for clarity and that they have a plan to offset tariff impacts [86][89]

Financial Data and Key Metrics Changes - The company reported a core sales decline of 2.1%, which was at the high end of the guidance range, reflecting new product innovation and some pricing benefits [26][32] - Normalized gross margin increased by 150 basis points to 32.5%, marking the seventh consecutive quarter of year-over-year improvement [27][32] - Normalized operating margin was 4.5%, exceeding the guidance range despite increased advertising and promotion investments [32][33] - The company recorded a normalized diluted earnings per share loss of $0.01, which was $0.05 to $0.08 above the guidance range [33] Business Line Data and Key Metrics Changes - The Learning and Development segment and the International business, which represent nearly 40% of total sales, posted positive core sales growth for five consecutive quarters [26][32] - The first quarter net sales included about 2.5 points of currency headwind and just over half a point from category exits [27][32] Market Data and Key Metrics Changes - Over 60% of total sales were in the United States, with significant investments made in U.S. manufacturing, totaling nearly $2 billion since the 2017 Tax Cuts and Jobs Act [12][13] - The company plans to reduce U.S. sourced finished goods from China to 10% by the end of 2025 [11] Company Strategy and Development Direction - The company is focused on product innovation and has rebuilt its multiyear innovation funnel, with new products set to launch in the second half of the year [7][25] - The strategy includes leveraging U.S. manufacturing capabilities to mitigate tariff impacts and capitalize on competitive advantages [14][25] - The company is actively pursuing sales opportunities in categories where it has domestic production exempt from tariffs [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic operating environment and emphasized the potential for long-term gains despite short-term challenges [25][44] - The company is maintaining its net sales guidance for the year but moderating expectations for category growth from flat to down 1% to 2% due to lower consumer confidence [16][41] - Management highlighted that the number of categories with domestic production significantly exceeds those that are disadvantaged by tariffs [25][86] Other Important Information - The company has paused virtually all outstanding Chinese purchase orders in response to the new tariffs and is focusing on alternative sourcing solutions [22][23] - A significant portion of the baby gear business is exposed to tariffs, with management actively working on mitigation strategies [55][56] Q&A Session Summary Question: Retail destocking and tariff mitigation efforts - Management noted that core sales growth was at the high end of guidance and that they have not seen significant changes in retailer inventory levels in Q1 [50][52] - They have taken proactive actions to mitigate tariffs, particularly in the baby gear category, which is their most exposed segment [53][54] Question: Leveraging U.S. manufacturing capacity - Management clarified that they are not set up for private label production but are encouraging retailers to replace private label products with their branded products [63][64] Question: Guidance and market growth expectations - Management acknowledged the challenges in forecasting market growth but emphasized that the majority of their business is not significantly impacted by tariffs [84][86] Question: Sensitivity of China tariffs and impacts - The majority of the tariff impact is concentrated in the baby gear category, which is primarily sourced from China [93]

Newell Brands Announces First Quarter 2025 Results Year-Over-Year Sales Growth Improved Sequentially Strong Gross Margin Expansion Versus Prior Year Affirms Net Sales, Operating Margin and EPS Outlook for Full Year 2025 ATLANTA, GA – April 30, 2025 – Newell Brands (NASDAQ: NWL) today announced its first quarter 2025 financial results. Chris Peterson, Newell Brands President and Chief Executive Officer, said, "We had strong results in the first quarter with core sales growth, operating margin and earnings pe ...

Investor Presentation Q1 2025 FORWARD LOOKING STATEMENTS This presentation and the accompanying remarks contain non-GAAP measures. An explanation of most directly comparable GAAP measures are contained in the Appendix. © Newell Brands 2 • the Company's ability to optimize costs and cash flow and mitigate the impact of soft global demand and retailer inventory rebalancing through discretionary and overhead spend management, advertising and promotion expense optimization, demand forecast and supply plan adjus ...

Core Viewpoint - Newell Brands Inc. (NWL) is anticipated to report a year-over-year decline in both revenue and earnings for Q1 2025, with revenues expected at $1.55 billion, reflecting a 6.4% decrease from the previous year [1] Financial Performance - The consensus estimate for the bottom line indicates a loss of seven cents per share, a decline from break-even earnings in the same quarter last year [2] - In the last reported quarter, NWL's earnings exceeded the Zacks Consensus Estimate by 14.3%, with an average earnings beat of 46.4% over the trailing four quarters [2] Factors Impacting Results - The company faces challenges from a tough macroeconomic environment, including high core inflation, which has likely led to reduced demand for discretionary and durable products [4] - Additional headwinds include foreign currency translations, adverse impacts from business exits, shifting consumer preferences, and geopolitical volatility [5] - Management projected a net sales decline of 5-8% and core sales drop of 2-4% for Q1 2025, with a normalized operating margin expected to be between 2-4%, down from 4.8% in the prior year [6] Segment Performance - The Outdoor & Recreation segment is projected to experience a significant sales drop of 12.2% [7] Positive Aspects - On a positive note, NWL's front-end commercial capabilities, including innovation and business development, along with a streamlined organizational structure, may provide some support to performance [8] - Pricing strategies in international markets to counter inflation and currency fluctuations are also expected to help cushion the company's performance [8] Valuation - From a valuation perspective, NWL is trading at a forward 12-month price-to-earnings ratio of 7.39x, which is below its five-year high of 16.88x and the industry average of 20.94x, indicating attractive investment opportunities [10] - Over the past six months, NWL's shares have declined by 40.2%, contrasting with a 0.4% growth in the industry [11]

Company Overview - Newell Brands Inc. (NASDAQ: NWL) is set to report its Q1 results on April 30th, 2023, following a significant turnaround plan initiated after a weak financial performance earlier in the year [1]. Financial Performance - The company has been focusing on a turnaround strategy in 2023 to address previous financial weaknesses [1]. Investment Philosophy - The investment philosophy highlighted emphasizes identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1].