Newell Brands reported third-quarter net sales were $2.3 billion, a 19.2% year-over-year decline, citing a core sales decrease of 10.8% and impact from the sale of its Connected Home & Security business at the end of the first quarter 2022, unfavorable foreign exchange and certain category and retail store exits.
Operating income was $35 million compared with $281 million in the prior-year period, Newell reported. The company cited the impact of lower net sales, a one-time impairment charge, significant headwinds from inflation and foreign exchange and an increase in advertising and promotion expense, which it said more than offset benefits from pricing, productivity savings and lower overhead costs.
The company reported a net income of $31 million, or $0.07 diluted earnings per share, compared with $190 million, or $0.44 diluted earnings per share, in the prior-year period.
Newell’s Home Appliances segment, including Oster, Mr. Coffee, Crock-Pot and Sunbeam, generated net sales of $305 million in the third quarter compared with $443 million in the prior- year period. The company cited a core sales decline of 23.2%, the impact of exits from certain low-margin categories and unfavorable foreign exchange. Reported operating loss from the segment in the quarter was $20 million compared with a year-earlier operating income of $19 million. The year-over-year difference was impacted by a $15 million impairment charge related to intangible assets according to Newell. Normalized operating loss was $3 million, or negative 1.0 percent of sales, versus an operating income of $24 million, or 5.4 percent of sales, in the prior year period.
The Home Solutions segment, including the Food business unit with Calphalon, Rubbermaid, Sistema and Ball, generated net sales of $510 million compared with $598 million in the prior-year period. The company cited a core sales decline of 11.6% and the impact of the exit of 42 Yankee Candle retail locations during the first nine months of the year. Core sales slipped year over year across the Home Fragrance and Food business units. Reported operating loss was $88 million compared with a year-earlier operating income of $75 million, The year-over-year difference was impacted by a $108 million impairment charge related to goodwill.
The Outdoor & Recreation segment, including Coleman, Contigo, Bubba and Aerobed, generated net sales of $289 million compared with $391 million in the prior-year period. The company noted a core sales decline of 18.4% and the impact of exits from certain low-margin categories, Reported operating income from the segment in the quarter was $8 million compared with $27 million a year earlier.
“Following strong performance over the first half of the year, results decelerated in Q3, reflecting a tough operating environment as many retailers rightsized their inventory positions, inflationary pressure on both the consumer and our business, as well as the impact of a stronger dollar,” said Ravi Saligram, Newell Brands CEO. “We expect economic uncertainty and external disruptions to persist in the near term and are staying agile, as we adjust our playbook to this environment while taking decisive actions to maximize profits and cash. We remain confident in the strength of our brands and our ability to drive sustainable and profitable growth over the long term.”
Chris Peterson, Newell Brands president and CFO, said, “During the third quarter we enhanced Newell’s financial flexibility and maintained strong cost discipline, as results were impacted by top-line deleveraging. We remain laser-focused on aligning the company’s cost structure with the macro backdrop, reducing inventory and strengthening cash flow, while continuing to invest in core capabilities.”