Newell Brands' Q3 2024 Earnings: A Turnaround in Progress

Newell Brands Inc. (NASDAQ: NWL) reported its third-quarter 2024 earnings, demonstrating significant progress in its ongoing turnaround efforts. The company's strategic deployment has contributed to sequential sales improvement, while cost reduction efforts and pricing strategies have driven gross margin expansion and core sales performance.

Newell Brands' strategic deployment has yielded positive results, with year-over-year sales performance improving sequentially. The company's core sales declined by only 1.7 percent compared to the prior year period, reflecting a strong pricing strategy in international markets to offset inflation and currency movements. This pricing strategy has been a meaningful contributor to the company's core sales performance.

The company's cost reduction efforts and productivity gains have been instrumental in driving gross margin expansion. Newell Brands' reported gross margin increased to 34.9 percent compared to 30.3 percent in the prior year period, marking the fifth consecutive quarter of significant gross margin expansion. This improvement is a testament to the company's commitment to enhancing operational efficiency and reducing costs.

Newell Brands' debt reduction and EBITDA growth have contributed to its balance sheet improvement. The company has meaningfully de-levered its balance sheet through both debt reduction and EBITDA growth, demonstrating a commitment to financial discipline and strengthening its financial position.

The company's increased advertising and promotions (A&P) investment has influenced its sales and operating margin performance. Newell Brands purposefully increased its level of A&P investment during the third quarter, which has contributed to its sequential sales improvement and gross margin expansion.

Restructuring actions and savings have contributed to Newell Brands' operating margin improvement. The company's reported operating margin improved to negative 6.2 percent compared to negative 7.8 percent in the prior year period. This improvement reflects benefits from higher gross profit and savings from restructuring actions that were partially offset by higher incentive compensation expense, advertising and promotions costs, and additional amortization of certain tradenames.

In conclusion, Newell Brands' Q3 2024 earnings call highlights the company's progress in its turnaround efforts. The company's strategic deployment, cost reduction efforts, pricing strategy, debt reduction, and increased A&P investment have all contributed to its sequential sales improvement, gross margin expansion, and operating margin improvement. As Newell Brands continues to execute its strategic plan, investors can expect the company to build on its progress and lay a solid foundation for future growth.