Newell Brands Navigates Tariff Headwinds: A Delicate Balancing Act in 2025

Newell Brands Inc. has unveiled its earnings guidance for the second quarter and full year of 2025, revealing a challenging landscape marked by trade tensions, cost pressures, and strategic realignments. The company’s outlook underscores a precarious balancing act between mitigating tariff-driven headwinds and maintaining profitability in a volatile macroeconomic environment.

Q2 2025: A Loss Amid Revenue Declines

Newell’s Q2 guidance signals immediate turbulence. The company anticipates a 3%–5% year-over-year drop in net sales, with core sales also declining 5%–3%, driven by lingering tariff impacts and soft consumer demand. Notably, it projects a normalized loss per share of $0.21–$0.24, contrasting sharply with analyst expectations of $0.32 earnings. This divergence highlights the stark reality of Newell’s operational challenges: .

Analysts have adjusted their forecasts to reflect these pressures, now projecting Q2 revenue at $1.96 billion—a 3.36% decline—while excluding special items. The gap between Newell’s internal guidance and external estimates underscores the market’s skepticism about near-term recovery prospects.

Full-Year Outlook: Resilience Amid Uncertainty

For the full year, Newell reaffirmed its normalized EPS guidance of $0.70–$0.76, despite a projected 2%–4% net sales decline. The company attributes this cautious optimism to productivity gains, pricing actions, and a strategic pivot toward domestic manufacturing to reduce reliance on Chinese imports. However, the 125% U.S. tariff on Chinese goods looms large. If sustained, this tariff could shave up to $0.20 from EPS, though Newell estimates its mitigating measures—such as reshoring production—will halve that impact.

The full-year outlook also includes a widened cash flow range of $400–500 million, reflecting higher tariff-related inventory costs. This adjustment suggests Newell is bracing for prolonged trade friction, with non-GAAP metrics like normalized EBITDA ($136 million in Q1) serving as critical indicators of core performance.

Operational Progress and Strategic Shifts

First-quarter results provided a glimpse of resilience. Despite a 5.3% sales decline to $1.6 billion, gross margins expanded to 32.1%, thanks to pricing strategies and cost controls. Normalized EBITDA of $136 million, though down from $152 million in 2024, reflects the company’s efforts to offset inflation and tariff costs. Newell’s emphasis on domestic manufacturing—highlighted in its Q1 update—aims to insulate future operations from trade volatility.

Risks on the Horizon

The company’s guidance comes with caveats. Geopolitical tensions, inflationary pressures, and supply chain disruptions remain key risks. Newell’s exposure to tariffs is particularly acute, given its reliance on Chinese imports for many products. The 125% tariff, if extended, could further strain margins. Meanwhile, consumer spending on discretionary household goods remains vulnerable to broader economic slowdowns.

Conclusion: A Fragile Path to Stability

Newell Brands’ 2025 guidance paints a picture of a company fighting to stabilize earnings in an unforgiving environment. While its normalized EPS targets ($0.70–$0.76) reflect operational discipline, the path to achieving them hinges on two critical factors: tariff resolution and execution of its domestic manufacturing strategy.

The data tells a nuanced story. Q1’s margin improvement (32.1% gross margin) and EBITDA resilience suggest Newell can adapt, but its stock’s underperformance relative to broader markets () indicates investor wariness. Meanwhile, the $0.20 EPS sensitivity to tariffs—mitigated but still impactful—highlights the fragility of its outlook.

Investors should weigh Newell’s strategic moves against the macro backdrop. If trade tensions ease and reshoring efforts gain traction, the stock could rebound. However, with full-year revenue projected to fall and a Q2 loss on the horizon, the company’s success in 2025 will depend on its ability to execute in an environment where geopolitical risks remain as unpredictable as its stock price.

In short, Newell Brands’ journey in 2025 is a microcosm of the globalized economy’s struggles—a race to adapt to protectionism while maintaining profitability. For now, the company’s guidance offers a cautious roadmap, but the destination remains uncertain.