Shares of Newell Brands (NWL 12.25%) were down 9.6% as of 3:45 p.m. ET Friday after the company behind brands such as Sharpie, Rubbermaid, Coleman and Yankee Candle announced mixed quarterly results and lowered its full-year outlook.
Newell Brands' third-quarter net sales fell 9.1% year over year to $2.05 billion, translating to adjusted (non-GAAP) earnings of $0.39 per share (down from $0.50 per share a year earlier). Analysts, on average, were modeling lower earnings of $0.24 per share but on higher sales of $2.11 billion.
On the fruits of Newell Brands' new strategy
Delving deeper into Newell Brands' results, revenue declines were broad-based; the home and commercial solutions segment sales declined 7.1% to $1.1 billion, learning and development segment revenue dropped 8.1% to $694 million, and outdoor and recreation segment sales fell 20.9% to $231 million.
Still, Newell Brands CEO Chris Peterson praised the company's margin and cash-flow improvements since unveiling an update on its strategic priorities and capital allocation framework in June, as well as its restructuring initiatives announced in January 2023.
"The substantial progress we are making gives me great confidence that our new strategy, which focuses on our leading brands in top markets and puts consumer understanding and insights at the center of everything we do, will accelerate the company's performance and drive significant value creation over time, despite a challenging macroeconomic backdrop," Peterson added.
Is Newell Brands stock a buy now?
In the meantime, Newell Brands lowered its full-year outlook to call for net sales of $8.02 billion to $8.09 billion (including a 13% core sales decline and down from its old range of $8.20 billion to $8.34 billion) and for adjusted earnings per share of $0.72 to $0.77 (down from $0.80 to $0.90 previously). Newell simultaneously narrowed its outlook for full-year operating cash flow to a range of $800 million to $900 million, an increase of $100 million from the lower end of its previous range.
Newell Brands appears to be taking steps in the right direction with regard to bolstering cash flows and profitability in today's difficult macroeconomic environment. But after coupling its mixed quarter with reduced top- and bottom-line guidance for the year, it's no surprise to see investors selling their shares. Until we see more tangible signs of a sustained return to profitable growth, I'm personally content continuing to watch this leading consumer goods stock from the sidelines.
