Newell 2025 Q1 Earnings Wider Loss as Net Income Declines 311%

Newell Brands (NWL) reported its fiscal 2025 Q1 earnings on April 30, 2025. The company posted a net sales of $1.6 billion, a 5.3% decrease compared to the prior year. Despite the decline in sales, Newell reported gross margins improvement from 30.5% to 32.1%. The company maintained its full-year 2025 guidance for net sales, operating margin, and EPS, despite the impact of tariffs. The reported net loss for the quarter was $37 million compared to $9 million in Q1 2024, with a normalized net loss of $6 million.

Revenue

Newell Brands saw a decline in revenue across various segments in fiscal 2025 Q1. The Home and Commercial Solutions segment contributed $812 million, reflecting a downturn compared to previous figures. Meanwhile, the Learning and Development segment generated $572 million, showing a core sales growth of 4.2%. The Outdoor and Recreation segment saw a decrease to $182 million, highlighting a core sales decline of 7.1%. Overall, the consolidated revenue for Newell totaled $1.57 billion.

Earnings/Net Income

Newell's earnings report showed deepening losses, with the company experiencing a diluted loss of $0.09 per share, a significant increase from the $0.02 loss per share in the same quarter last year. Net loss widened to $37 million from $9 million, marking a 311.1% escalation. The EPS figures highlight challenging conditions and suggest a negative outlook for earnings performance.

Price Action

The stock price of Newell edged down 0.62% during the latest trading day, dropped 3.24% over the most recent full trading week, and plummeted 25.20% month-to-date.

Post-Earnings Price Action Review

Following the recent earnings report, the stock price of Newell Brands (NWL) has shown a generally negative trend. A detailed analysis reveals that the market's response to revenue metrics indicates a win rate of 49.36% over three days, 50.40% over ten days, and 50.32% over thirty days. This suggests short-term volatility with a tendency towards a neutral or slightly positive market reaction over longer periods. Similarly, net income metrics exhibit comparable win rates, reflecting a consistent market response to earnings metrics. EPS metrics also illustrate a neutral to slightly positive trend in the longer term. In conclusion, while short-term volatility is evident, the overall trend favors a neutral to positive market reaction. However, the observed negative returns in the 3-Day, 10-Day, and 30-Day periods indicate potential short-term losses for investors.

CEO Commentary

Chris Peterson, President and CEO, expressed that Newell Brands had a strong start to 2025, with core sales improving sequentially and year-over-year, despite a decline of 2.1%. He highlighted the success of the company's new strategy, emphasizing product innovation as a key growth driver. Peterson noted Newell's proactive approach to managing tariffs by shifting sourcing away from China and investing in domestic manufacturing, stating, "We are uniquely positioned to support multiple product categories." He conveyed confidence in navigating challenges and indicated that the company is well-positioned for long-term gains, stating, "We believe this time will be remembered as a pivotal point in Newell Brands evolution."

Guidance

Newell Brands maintains its 2025 financial outlook with net sales projected to decline between 4% and 2%, reflecting a change in category growth expectations to down 1% to 2%. The normalized operating margin is affirmed at 9% to 9.5%, while diluted earnings per share are guided to range from $0.70 to $0.76. The company anticipates operating cash flow between $400 million and $500 million, with a leverage ratio target of approximately 4.5 times by year-end 2025.

Additional News

Recently, Newell Brands has made significant updates concerning its operations and strategy. The company announced a strategic realignment to optimize its manufacturing processes, focusing on enhancing domestic production capabilities amidst global tariff challenges. This move aims to strengthen Newell's position in its core markets by reducing dependency on international sourcing. Additionally, there have been no significant changes in the company's C-level executives, reflecting a stable leadership team amid ongoing market fluctuations. Newell Brands continues to assess its dividend strategy, maintaining a steady payout despite economic pressures. These initiatives demonstrate Newell's commitment to navigating the current economic landscape and positioning itself for future growth.