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Newell Brands(NWL) - 2025 Q1 - Quarterly Report
NWLNewell Brands(NWL)2025-04-30 13:22
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Financial Performance - Net sales for Q1 2025 decreased by 5.3% to 1,566millioncomparedto1,566 million compared to 1,653 million in Q1 2024, impacted by soft global demand and net distribution losses [106]. - Gross profit remained flat at 503million,withgrossmarginimprovingto32.1503 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 16millioninQ12024,reflectingbenefitsfromrestructuringactionsandlowerrelatedcharges[111].−Interestexpenseroseby2.916 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 18million,comparedto18 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 812millionforthethreemonthsendedMarch31,2025,comparedto812 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 572million,drivenbygrowthintheBabybusiness,whiletheWritingbusinessfacedadeclineduetosoftdemand[117].−OutdoorandRecreationnetsalesdecreasedby9.5572 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 2millionforHomeandCommercialSolutions,adecreasefromanoperatingincomeof2 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 233millionasofMarch31,2025,with233 million as of March 31, 2025, with 185 million held by non-U.S. subsidiaries [123]. - Cash used in operating activities was (213)millionforthethreemonthsendedMarch31,2025,adecreaseof(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 1.2billionseniornotesmaturingonApril1,2026,toincreaseliquidity,althoughtherearenoassurancesthatfavorabletermswillbeavailable[121].−Moody′sdowngradedtheCompany′sseniorunsecureddebtratingto"B1,"resultinginanexpectedincreaseininterestexpenseofapproximately1.2 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 1.0billionseniorsecuredrevolvingcreditfacilitywith1.0 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].