Newell 2025 Q2 Earnings Misses Targets as Net Income Rises 2.2%

Newell (NWL) reported its fiscal 2025 Q2 earnings on Aug 01st, 2025. Despite expectations, Newell's results fell short, with revenue declining and missing analyst consensus. The company adjusted its guidance downward due to tariff impacts, anticipating a low single-digit revenue decline for the full year. Despite these challenges, Newell Brands reported a rise in net income, reflecting a resilient performance amid difficult market conditions. The company continues to focus on innovation and distribution gains to drive future growth.

Revenue
Newell's revenue fell by 4.8% in Q2 2025, totaling $1.94 billion compared to $2.03 billion in Q2 2024. The Home and Commercial Solutions segment generated $892 million, showing a decrease from the previous year. The Learning and Development segment brought in $809 million. Outdoor and Recreation contributed $234 million, while the Corporate segment recorded no revenue, culminating in a total revenue of $1.94 billion.

Earnings/Net Income
Newell Brands reported stable EPS of $0.11 for Q2 2025, consistent with the previous year. The company's net income increased to $46 million, a 2.2% rise from $45 million in Q2 2024. This stability in EPS suggests a balanced financial performance despite revenue pressures.

Price Action
The stock price of Newell has dropped 7.21% during the latest trading day, has plummeted 24.08% during the most recent full trading week, and has plummeted 15.45% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Newell (NWL) shares after a quarter-over-quarter revenue increase and holding for 30 days led to significant underperformance. This approach resulted in a return of -71.46%, considerably trailing the benchmark by 116.05%. The negative Sharpe ratio of -0.67 indicated poor risk-adjusted returns, while a maximum drawdown of 0% showed no recovery ground was covered. Investors looking for gains through this strategy were met with disappointment as Newell stocks failed to hold their value, reflecting broader market challenges and company-specific hurdles.

CEO Commentary
Newell Brands demonstrated agility in Q2 2025, managing both short- and long-term needs amid a challenging macroeconomic environment. CEO Christopher H. Peterson noted, "normalized operating margin increased 10 basis points... with all 3 business segments being positive for the first time since Q3 of 2022." He emphasized ongoing improvements in structural economics, stating, "we are focused on dramatically improving the structural economics of the business." Peterson highlighted the importance of innovation, mentioning, "we remain confident that Newell's new strategy is working," and acknowledged challenges from category softness while expressing optimism about future growth driven by distribution gains and new product launches.

Guidance
Newell Brands updated its core sales guidance for 2025 to reflect a low single-digit decline across product categories, now expected between minus 3% and minus 2%. The company anticipates normalized EPS to range from $0.66 to $0.70, assuming an effective tax rate in the mid-teens. For Q3, net and core sales are projected to decline by 4% to 2%, with normalized operating margins expected between 9.1% and 9.5%. Operating cash flow is now forecasted to be between $400 million and $450 million for the year.

Additional News
Newell Brands recently announced the appointment of Gary Pilnick, Chairman and CEO of WK Kellogg Co, to its Board of Directors. Pilnick brings over 30 years of consumer-packaged goods experience and will serve on the Audit and Compensation and Human Capital Committees. Additionally, Newell Brands declared a quarterly cash dividend of $0.07 per share, payable on June 13, 2025. The company also unveiled a brand refresh for Yankee Candle, enhancing product quality and design, partnering with actress Brittany Snow for the campaign. This strategic focus on brand innovation highlights Newell's efforts to boost consumer engagement and market presence.