Newell Brands(US:NWL)2025-10-31 20:00Financial Performance - Net sales for Q3 2025 decreased by 7% to $1,806 million compared to $1,947 million in Q3 2024, primarily due to softness in global demand and reduced retailer inventory levels [122]. - Gross profit for Q3 2025 was $616 million, a decrease of 9% from $679 million in Q3 2024, with a gross margin decline to 34.1% from 34.9% [123]. - For the three months ended September 30, 2025, net sales decreased by 10% to $942 million compared to $1,047 million in 2024, primarily due to soft global demand and distribution losses [129]. - For the nine months ended September 30, 2025, net sales totaled $5,307 million, a decrease of 5.8% from $5,633 million in 2024, impacted by soft global demand across all segments [136]. - H&CS net sales for the nine months ended September 30, 2025 decreased by 9%, impacted by soft global demand and distribution losses, with business exits affecting sales by approximately 1% [146]. - Learning and Development (L&D) net sales for the nine months ended September 30, 2025 decreased by approximately 1% to $2,062 million, while operating income increased by 13.4% to $424 million [148]. - Outdoor and Recreation (O&R) net sales for the nine months ended September 30, 2025 decreased by 6.7% to $599 million, with an operating loss of $5 million, an improvement from a loss of $52 million in the prior year [150]. Operating Income and Expenses - Operating income improved to $119 million in Q3 2025 from an operating loss of $121 million in Q3 2024, reflecting savings from restructuring actions [125]. - Operating income for the three months ended September 30, 2025 was $40 million, a significant improvement from an operating loss of $94 million in the prior year, mainly due to the absence of a $190 million non-cash impairment charge [131]. - Operating income for the nine months ended September 30, 2025 increased to $311 million from $58 million in the prior year, reflecting savings from restructuring actions and the absence of prior year impairment charges [140]. - Operating income for the nine months ended September 30, 2025 was $62 million, a significant improvement from an operating loss of $30 million in the prior year, primarily due to the absence of a $190 million non-cash impairment charge [147]. - Interest expense increased by $8 million in Q3 2025, with a weighted average interest rate of approximately 6.6%, up from 5.8% in Q3 2024 [126]. - Interest expense for the nine months ended September 30, 2025 increased by $14 million due to higher interest rates, with a weighted average interest rate of approximately 6.3% [141]. Taxation - The effective income tax rate for the three months ended September 30, 2025 was 50.0%, compared to a benefit of 3.4% in 2024, driven by lower forecasted pretax book income [128]. - The income tax provision for the nine months ended September 30, 2025 was $28 million, compared to a benefit of $19 million in 2024, reflecting a significant increase in the effective tax rate [144]. Cash Flow and Financial Position - The Company had cash and cash equivalents of approximately $229 million as of September 30, 2025, with cash provided by operating activities decreasing by $243 million to $103 million [154]. - The Company maintains a $1.00 billion senior secured revolving credit facility, with $932 million of availability as of September 30, 2025 [158][159]. - In May 2025, the Company completed the offering of 8.500% senior notes due 2028, using proceeds to fully redeem its 2026 Notes [161]. - The Company was in compliance with all of its debt covenants at September 30, 2025 [163]. Strategic Initiatives - The company is focused on returning to profitable top-line growth through product innovation, distribution expansion, and international market penetration [113]. - The Realignment Plan aims to strengthen front-end commercial capabilities and unlock operational efficiencies, with several changes implemented by the end of 2024 [111]. - The company is committed to improving cash flow efficiency and further deleveraging its balance sheet [113]. Market Challenges - The company continues to face challenges from macroeconomic volatility, inflationary pressures, and shifting consumer preferences [109]. - Changes in foreign currency unfavorably impacted net sales by $32 million, or 1%, for H&CS and $6 million, or less than 1%, for L&D [146][148]. - The Company regularly assesses its cash requirements amid a rapidly changing retail landscape, influenced by inventory control, interest rates, and geopolitical factors [152]. Other Income - The company recorded a pretax gain of approximately $12 million from the sale of its equity interest in a joint venture for about $22 million in August 2025 [120]. - The company realized a pretax gain of $12 million from the sale of its equity interest in a joint venture during the nine months ended September 30, 2025 [143]. Restructuring Costs - Restructuring-related costs for the nine months ended September 30, 2025 were $23 million, down from $40 million in 2024, primarily related to the Realignment Plan [139].