Newell Brands(US:NWL)2026-02-06 14:30Financial Data and Key Metrics Changes - Fourth quarter net sales were $1.9 billion, down 2.7% year-over-year, and core sales declined 4.1% [17] - Full-year net sales were $7.2 billion, a decline of 5%, and core sales decreased by 4.6% [21] - Normalized gross margin for the fourth quarter was 33.9%, down 70 basis points year-over-year, while normalized operating margin was 8.7%, up 160 basis points [18][19] - Normalized earnings per share for 2025 were $0.57 compared to $0.68 in the prior year [23] Business Line Data and Key Metrics Changes - The Learning and Development segment showed resilience, with strong performance from brands like Sharpie and Expo [9] - The Baby segment improved significantly, with Graco's market share increasing by 160 basis points for the full year and over 350 basis points in the fourth quarter [9] - The Home and Commercial segment faced challenges, particularly in the Kitchen category, but promotional activities and selective price adjustments helped stabilize performance [10] - Outdoor and Recreation segment showed stabilization with improved gross and operating margins as the year progressed [11] Market Data and Key Metrics Changes - Core sales in Argentina grew slightly in the fourth quarter due to economic recovery, while Brazil's core sales were down only mid-single digits [18] - The overall market environment remains challenging, with expectations of a 2% decline in categories for 2026 [12] Company Strategy and Development Direction - The company has focused on rebuilding front-end capabilities and strengthening back-end capabilities while reducing complexity [4] - A global productivity plan was announced to enhance competitiveness and support long-term value creation [6] - The company aims to convert strengthened capabilities into improved performance while maintaining margin and cash discipline [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was more challenging than anticipated due to tariffs impacting consumer behavior and retail dynamics [5] - The company expects core sales to decline by approximately 2% for 2026 but is confident in outperforming the category due to strong innovation and distribution improvements [12][30] - Management highlighted the importance of innovation, with over 25 Tier 1 and Tier 2 launches planned for 2026 [13] Other Important Information - The company reduced its China sourcing exposure to below 10%, enhancing supply chain resilience [6] - Full-year operating cash flow guidance for 2026 is set at $350-$400 million, reflecting a 40% increase over 2025 [27] Q&A Session Questions and Answers Question: Can you help us understand your level of visibility on shelf space wins and confidence in sales growth? - The company is planning for category declines but expects to outperform due to strong innovation and secured shelf space wins that will kick in starting in Q2 [37][40] Question: Can you elaborate on the pricing interventions in the baby and kitchen categories? - The company adjusted pricing in response to tariff rollbacks and is implementing a 15% price reduction on Rubbermaid EasyStore lids to remain competitive [42][44] Question: What are the expectations for category growth in the long term? - The company anticipates that real income growth and product life cycles will contribute to category recovery, aiming for a long-term growth rate of 2%-3% [58]