Newell to Report Q2 Earnings: Does a Surprise Await Investors?

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]