Newell's Innovations & Other Strategies Seem Encouraging: Apt to Hold

Core Insights - Newell Brands Inc. (NWL) is positioned for growth due to robust business strategies and a recent corporate strategy aimed at optimizing category mix and driving growth across business units [1][2] - The company's shares have increased by 34% over the past three months, contrasting with a 0.5% decline in the industry [1] Strategic Efforts - Newell's corporate strategy focuses on investing in innovation, brand-building, and market excellence, while also standardizing and achieving scale efficiencies in supply-chain and back-office functions [2] - The company has seen a sequential improvement in core sales growth for five consecutive quarters since implementing the new strategy [2] Organizational Changes - Newell has transitioned to a new operating model to enhance organizational effectiveness and agility, fostering a high-performing and innovative culture [3] - The organizational realignment aims to strengthen front-end commercial capabilities, improve accountability, and unlock operational efficiencies and cost savings [4] Product Innovations - Newell is enhancing its commercial capabilities through consumer-driven innovations, including products like Graco's SmartSense Soothing Bassinet and Mr. Coffee Perfect Brew coffeemaker, which are expected to boost sales and profitability [5][6] Challenges - The Outdoor & Recreation segment has faced challenges, with net sales declining by 20.8% year over year and core sales falling by 16.8% in Q3 2024 [7] - The company is also dealing with a challenging macroeconomic environment, leading to a 4.9% decline in net sales year over year in Q3, attributed to lower core sales and adverse foreign exchange impacts [8][9] Future Outlook - For Q4, Newell anticipates net sales to decline by 4-7% year over year, with core sales expected to drop by 2-5% due to adverse foreign currency effects [10] - The company expects normalized operating margin to be in the range of 7-7.7% for the quarter, with higher SG&A expenses anticipated [10] Conclusion - Newell's strategies and organizational changes are expected to continue delivering growth, with a focus on cross-functional brand management and simplifying regional go-to-market organizations [11]