icon
icon
icon
icon
Upgrade
icon

Newell Brands shares stuck in neutral following mixed results, cautious outlook

AInvestFriday, Feb 9, 2024 9:14 am ET
1min read

Newell Brands Inc. reported its financial results for the fourth quarter of 2023, which were mixed. The company beat EPS expectations by 5 cents but fell short on revenues and provided a cautious outlook. T

The company's net sales for the quarter were $2.1 billion, representing a decline of 9.1% compared to the prior year period, but outpacing analyst expectations. Core sales declined by 9.3% compared to the prior year period. 

The Home & Commercial Solutions segment generated net sales of $1.3 billion compared with $1.4 billion in the prior year period, reflecting a core sales decline of 8.2% and the impact of certain category exits, partially offset by the impact of favorable foreign exchange. The Learning & Development segment generated net sales of $635 million compared with $684 million in the prior year period, as a core sales decline of 7.7% was partially offset by the impact of favorable foreign exchange. The Outdoor & Recreation segment generated net sales of $165 million compared with $211 million in the prior year period, reflecting a core sales decline of 21.8%.

Newell Brands reported operating cash flow of $930 million, an increase of $1.2 billion compared with the outflow of $272 million in the prior year. The company reduced debt to $4.9 billion at the end of 2023, compared with $5.4 billion at the end of 2022.

The company initiated its full-year 2024 outlook, expecting net sales to decline by 8% to 5% and normalized earnings per share of $0.52 to $0.62, both lower than analyst forecasts. The company also announced an organizational realignment, which is expected to strengthen its front-end commercial capabilities and result in restructuring and related charges in the range of $75 million to $90 million and annualized pre-tax savings in the range of $65 million to $90 million, net of reinvestment.

The company's guidance for the first quarter of 2024 anticipates net sales to decline by 10% to 8%, core sales to decline by 8% to 6%, and normalized operating margin to be between 2.4% to 3.2%. The company also expects normalized earnings per share to range from a loss of $0.09 to a loss of $0.05 which missed consensus numbers.

In conclusion, Newell Brands' fourth-quarter results were mixed, with declines in net sales and core sales across all segments. The company's outlook for the first quarter of 2024 is cautious, with expectations of further declines in sales and operating margin. The company's full-year 2024 outlook is also cautious, with expectations of a decline in net sales and normalized earnings per share. However, the company's strong operating cash flow and reduced debt are positive signs for the future.

$NWL(NWL)

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.