Second-quarter results at Newell Brands were in line with analyst estimates with the company reporting it continues working to gain traction despite the challenging macroeconomic climate.
Net income was $46 million, or 11 cents per diluted share, compared with $45 million, or 11 cents per diluted share, in the prior-year quarter. Adjusted for one-time events, net income was $101 million, or 24 cents per diluted share, compared with $148 million, or 35 cents per diluted share, in the year-earlier period, the company reported.
An analyst consensus estimate from Zacks Investment Research called for earnings per adjusted diluted share of 24 cents and revenues of $1.94 billion.
Net sales were $1.94 billion in the quarter, down 4.8% year over year, reflecting a core sales decline of 4.4%, unfavorable foreign exchange and business exits, Newell stated. Operating income was $171 million compared with $163 million in the year-previous period while adjusted operating income was $208 million compared with $215 million.
- In the Home and Commercial Solutions segment, net sales were $892 million compared with $962 million in the year-past quarter, reflecting a core sales decline of 6%, as well as the effects of unfavorable foreign exchange and business exits, Newell noted. Core sales gained in the Home Fragrance business and declined in the Commercial and Kitchen businesses. Operating income was $24 million versus $48 million in the year-before period, while adjusted operating income was $44 million versus $70 million.
- The Outdoor and Recreation segment net sales were $234 million compared with $258 million in the year-past quarter, reflecting a core sales decline of 10.9%, which more than offset the impact of favorable foreign exchange, the company maintained. Operating income was $8 million versus an operating loss of $11 million in the year-before period, while adjusted operating income was $13 million versus an operating loss of $1 million.
- In the Learning & Development segment net sales were $809 million compared with $813 million in the year-past quarter, reflecting a core sales decline of 0.5%, Newell reported. Core sales advanced in the Writing business and decreased in the Baby business. Operating income was $202 million versus $205 million in the year-before period while operating income was $207 million versus $212 million.
Newell updated its full-year outlook, forecasting net sales down 3% to 2% and adjusted EPS of 66 cents to 70 cents. In the first quarter, Newell’s full-year outlooks was for net sales to be down 4% to 2% and adjusted EPS of 70 cents to 76 cents.
Chris Peterson, Newell Brands president and CEO, said, “As part of our journey to become a world-class consumer products company, we took another important step forward by delivering net sales, core sales, normalized operating margin and normalized EPS all within the guidance ranges we provided last quarter. In a challenging macroeconomic environment, our team has demonstrated tremendous agility and our strategy gives us confidence that we are on the right track to continue to improve our rate of core sales growth, drive margin improvement and generate strong cash flow.”
Mark Erceg, Newell Brands CFO, added, “Gross margin expanded by 100 basis points during the second quarter on a year-over-year basis, hitting 35.4%, which is the eighth quarter in a row where gross margin expanded by 100 basis points or more. In addition, we enhanced our financial flexibility by refinancing $1.25 billion of debt in an offering that was four-times oversubscribed which, we believe, is indicative of broad investor support behind Newell Brands’ new corporate strategy, which has enhanced top-line performance, strengthened our balance sheet and fundamentally improved our structural economics.”
Pictured above: Rubbermaid Brilliance glass storage.
