Newell Brands Inc. Stock Price: Quote, Forecast, Splits & News (NWL)

Perplexity Finance

NWL

Newell Brands Inc.

NWL

NASDAQ

Market Closed

Wednesday, May 21, 2025

$5.71

+$0.02

0.35%

At close: May 20, 4:00:00 PM EDT

$5.74

+$0.03

0.53%

After hours: 7:56:27 PM EDT

Change

+$0.02

0.35%

Financial Profile

Prev Close

$5.69

Market Cap

$2.39B

Day Range

$5.68 - $5.82

Open

$5.70

P/E Ratio

-9.7

52W Range

$4.22 - $11.78

24H Volume

$40.03M

Dividend Yield

4.90%

EPS

-0.59

Earnings

Report Date

Apr 30, 2025

Reported Revenue

1.6B

Miss -20.3%

Avg 1d Change

24.02%

Report Period

Q1 2025

Reported EPS

-0.01

Beat +85.71%

Implied Move 1d

16.44%

Transcript

10m 2s

Good morning, everyone, and welcome to Newell Brands First Quarter twenty twenty five Earnings Call. On the call with me today are Chris Peterson, our President and CEO and Mark Ersegg, our CFO. Before we begin, I'd like to inform you that during today's call, we will be making forward looking statements which involve risks and uncertainties. Actual results and outcomes may differ materially and we undertake no obligation to update forward looking statements. I refer you to the cautionary language and risk factors available in our our earnings release, our Form 10 ks, Form 10 Q, and other SEC filings available on our Investor Relations website for a further discussion of the factors affecting forward looking statements. Please also recognize that today's remarks will refer to certain non GAAP financial measures, including those referred to as normalized measures. We believe these non GAAP measures are useful to investors although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non GAAP measures are available and reconciliations between GAAP and non GAAP measures can be found in today's earnings release and tables that were furnished to the SEC. Thank you. And with that, I'll turn the call over to Chris.

11m 23s

Thank you, Joanne. Good morning, everyone, and welcome to our first quarter earnings call. We had a strong start to the year with Q1 results in line or ahead of expectations across all key financial metrics. Core sales at minus 2.1% improved both sequentially and versus year ago. Both learning and development and the international business in total delivered core sales growth in the quarter. Normalized gross margin increased meaningfully for the seventh consecutive quarter expanding by 150 basis points. Normalized operating margin exceeded our outlook even after A and P investment dollars by high single digits compared to prior year and normalized earnings per share came in point $5 better than the upper end of our guidance range driven by strong operational performance. We remain confident that Newell's new strategy is working, A key piece of our new strategy relates to product innovation as we shared last quarter our multi year innovation funnel has now largely been rebuilt with exciting consumer led proprietary products, which will begin launching in a sustained manner starting with the second half of this year. Despite the dynamic operating environment, we remain laser focused on driving continued progress on our where to play and how to win strategy choices, and the capabilities required to deliver against them.

12m 49s

That said, we know that tariffs are top of mind, so we'd like to start this morning by explaining why we're confident Newell Brands, after what will likely be a period of temporary disruption, is well positioned to disproportionately benefit from the global trade realignment currently underway. Specifically, we believe past decisions to proactively prepare for higher China tariffs by aggressively shifting sourced finished goods procurement to alternate geographies and to maintain and invest in a robust and extensive in house domestic manufacturing base while many of our top competitors outsourced or off shored much of their production capability, gives us a unique opportunity to not just manage through this period of tariff related sourcing, dislocations, but to be on a net basis significant beneficiaries of them. Let's take each of those two decisions in turn. First, we have made remarkable progress derisking our China supply base over the past several years. Recall that just a few years ago, 35% of Newell's total cost of goods sold was sourced finished goods imported from The U. S. Into The U. S. From China. Last year, 2024, that number was down to 15%. To help put this in perspective, consider the following: In 2024, total sourced finished goods imported to The U. S. From all countries represented 24% of Newell's total global cost of goods sold.

14m 18s

After netting out the 15% imported from China, Mexico, which is 98% USMCA compliant, was the second largest country of origin, accounting for roughly half of the remaining 9% of U. S. Imports. The remaining balance is sourced from various countries, none of which individually exceed 1%, of our total global cost of goods sold. This effectively means that China is what we needed to be focused on. That is why, even prior to the announcement of an additional 125% tariff on Chinese imported goods, we had plans to reduce U. S. Sourced finished goods from China down to 10% by the end of twenty twenty five and even lower than that by the end of twenty twenty six. Second, in 2024, over 60% of Newell brands total sales were in The United States. And since the 2017 Tax Cuts and Jobs Act, we have invested nearly $2,000,000,000 in U. S. Manufacturing. Much of which was spent on high return automation projects and dramatic improvements in our distribution and transportation systems. As a result, more than half of our 2024 U. S. Sales were manufactured through an extensive North America supply base and are not subject to tariffs. This means we are now uniquely positioned to support multiple product categories and to successfully partner with and lead our U. S. Customers through this tumultuous period of impending supply disruption.

15m 48s

In fact, we believe that the number of categories where we are strategically advantaged with North American tariff free production significantly exceeds the number of categories where we are disadvantaged. Key categories that we manufacture tariff free across 15 U. S. Plants and two USMCA compliant plants in Mexico, which collectively employ roughly 7,300 individuals include eight of our top 10 brands. Namely Rubbermaid, Rubbermaid Commercial, Sharpie, Expo, Yankee Candle, Papermate, Coleman, and Oster. We also manufacture Nook baby care products and Ball Mason jars domestically. Many of these products compete against China sourced brands which we believe provides us with a significant competitive advantage in the current environment. With a significant number of customers canceling outstanding purchase orders, and actively stopping shipments from China, we have significant untapped capacity across our U. S. And facilities due to the automation and operational excellence programs we have implemented over the past several years. This gives us the ability to quickly ramp up production of high quality products not subject to tariffs to allow our top strategic customers to keep their store shelves full.

17m 12s

When we shared our 2025 plan back in February, we expected a fluid and dynamic macroeconomic environment, which is certainly playing out. Mark will provide additional context on our outlook for the year and walk you through the numbers shortly, but let me spend a few minutes explaining our philosophical and strategic approach to guidance and tariff management. In terms of top line growth, we are maintaining our net sales guidance for the year. Within this, we are moderating our expectations for category growth from what was previously flat to now down 1% to 2%. We believe this is prudent given lower consumer confidence levels and more muted macroeconomic forecasts. Importantly, we are not changing our forecast for market share for the year, as our new product innovation pipeline remains on track. Offsetting this impact our foreign exchange outlook based on current rates has improved by one to two percentage points. Additionally, we continue to expect stronger top line performance in the back half of the year compared to the front half based on the timing of our innovation launches and distribution gains. Relative to operating margin and earnings per share, we are maintaining our stated guidance for the year, as we expect lower commodity and input cost inflation, favorable foreign exchange, stronger productivity results, and select pricing actions to offset higher tariff costs.

18m 39s

Within this guidance, we have created two separate tariff buckets. In the first tariff bucket, we have placed five items. First, Mexico and Canadian tariffs which from a Newell perspective have been effectively resolved because our two Mexican manufacturing facilities are 98% USMCA compliant. Second, the initial IEEPA 20% China tariffs, Third, the Section two thirty two Global Steel and Aluminum Tariffs, fourth, the reciprocal tariffs that were announced April 2 and then suspended on April 9 leaving a residual baseline tariff of 10% on all countries except China, Finally, the retaliatory tariffs announced by both Canada and China against the US. We expect to fully offset the expected bottom line normalized earnings per share impact from the five elements which make up our first tariff bucket, with a number of proactive actions. First, we updated our commodity and input cost estimates for the full year, and found additional savings versus our going in budget estimates in several important areas. For example, the price of crude oil has dropped about 15% since the start of the year, and natural gas is down close to 10%, which in addition to providing direct cost savings is favorably impacting resin prices in transportation costs.

20m

Second, in tariff affected markets, our procurement team has gone back to suppliers and extracted, broadly speaking, a couple of points of cost reduction. Third, we put discretionary overhead and A and P spending under a micro microscope and made some tough but prudent decisions. Having said that, we still plan to spend more on A and P this year than at any point over the past several years as we invest in the business. Fourth, we updated foreign exchange rates, which have largely moved in our favor since our last earnings call, and we increased prices in select geographies where exchange rate movements versus the U. S. Dollar were justified and appropriate. Finally, we initiated two separate rounds of targeted tariff related price actions the U. S. One of which has already gone into effect and one of which will be effective May 1. The good news is that after these five actions, we have a plan to fully offset the negative bottom line 2025 normalized earnings per share impacts related to what we are calling our first bucket of tariffs. Second tariff bucket is uniquely centered and isolated against incremental 125% share China tariff. Given the magnitude of this element, and since it seems to be particularly fluid, we have chosen to handle it separately and outside of guidance for now, as a sensitivity.

21m 22s

As previously mentioned, we already have plans to dramatically reduce our dependency of sourced finished goods originating from China this year. However, considering the incremental 125% tariffs being placed on China, we have done what many leading retailers have done, and paused virtually all outstanding Chinese purchase orders. In addition, as we shared on our February call, we put a moratorium in place stating we will not be signing up any new suppliers who do not already have manufacturing capabilities outside of China or have defined plans to do so. We have taken these actions because we believe as a practical matter, a excluding the baby gear category, that the amount of incremental pricing required to hold gross margins and the associated new retail shelf price at this tariff level would be so significant that it would preclude many consumers from purchasing those items. Therefore, instead of continuing to source finished product or raw materials out of China, we will leverage existing inventory on hand while rapidly developing and qualifying alternative sourcing solutions for impacted items. As part of this effort, we have encouraged our business leaders and brand managers to embrace another round of SKU simplification, which is something Newell has proven to be very adept at, having already cut our SKU count from over 100,000 items to less than 20,000 as of last year.

22m 46s

The other thing we are doing, which frankly we are very excited about, is aggressively selling and providing key strategic retailers access to our tariff free North America manufacturing base, during what we expect to be an extended period of constrained supply in certain product categories. We have already secured notable wins in food storage and vacuum sealing bags both of which are included in our updated guidance, and are in active dialogue across many more fronts as we pursue opportunities to expand distribution, [indiscernible] while simultaneously helping customers offer high quality Made in America Newell brands to their customers. That said, and in full transparency, the one piece that is most challenging is baby gear. Which is an industry wide issue. This is because approximately 97% of baby strollers and 87% of baby car seats in The U. S. Are sourced from China. In the past, the Trump Administration offered Section three zero one Tariff Exemption Trump Exemptions on Baby Gear products, to help young families afford the significant costs associated with having and raising children. Thus, we are hopeful the Administration will do so again, but in the meantime, we will do everything we can to protect and manage our Baby Gear business.

24m 4s

Before turning the call over to Mark, let me reiterate the key message coming out of this morning's call, which is as follows: We believe that the number of opportunities we have in advantaged categories where we have domestic have domestic, or USMCA compliant production exempt from tariffs significantly exceeds the number of categories where we are disadvantaged. Consistent with this, we are actively pursuing numerous incremental sales opportunities and are confident that these short term challenges will give way to lasting medium and long term gains. When we look back a few years from now, we believe this time will be remembered as a pivotal point in Newell Brands' evolution into a high performing, world class consumer products company. It has been seven quarters since we deployed our new strategy, and we remain excited and energized by the progress we are making the results we are delivering and look forward to sharing additional updates with you in the future. Finally, I'd like to thank our dedicated employees for their resilience throughout this dynamic environment and their continued commitment to operating with excellence and delighting consumers around the world. Mark? Thanks, Chris. Good morning, everyone. First quarter twenty twenty five core sales were minus 2.1% which was at the high end of our guidance range.

25m 20s

Reflecting new product innovation and to a lesser extent, pricing benefits. Both the Learning and Development segment and our International business which represents nearly 40% of Newell's total sales, posted positive core sales growth for the last five consecutive quarters which we believe further demonstrates that our new strategy and One Newell operating model are working. Twenty twenty five first quarter net sales included about 2.5 points of currency headwind and just over half a point of category exits. Normalized gross margin in the first quarter expanded by 150 basis points to 32.5% which was the seventh consecutive quarter of year over year improvement Gross productivity savings and pricing more than offset inflation and foreign exchange Please excuse us one moment We're experiencing a little bit of technical difficulty. Please just hold for one moment. Call dropped. It looks like we are making progress. If you guys can hear me okay, and if we can hear you okay, we may begin again if you're ready.

27m 58s

Yeah. We can hear you.

28m

That's great. Thank you for your patience, everyone. Allow us to begin again.

28m 8s

Great. Thanks, for being patient with us on our little technical snafu there. I'm going to go ahead and start with my first portion of my prepared remarks, transitioning over from Chris. So thanks and good morning everyone. First quarter twenty twenty five core sales were minus 2.1% which was at the high end of our guidance range reflecting new product innovation and to a lesser extent net pricing benefits. Both the Learning and Development segment and our International business which represents nearly 40% of Newell's total sales, posted positive core sales growth for the last five consecutive quarters. Which we believe further demonstrates that our new strategy and One Newell operating model are working.

28m 47s

Twenty twenty five first quarter net sales included about 2.5 points of currency headwind just over half a point of category exits. Normalized gross margin in the first quarter expanded by 150 basis points to 32.5%. Which was the seventh consecutive quarter of year over year improvement Gross productivity savings and pricing more than offset inflation and foreign exchange headwinds. During Q1, Newell's normalized operating margin was 4.5% which was comfortably above the guidance range we provided during our last earnings call. Operating margin results were better than anticipated despite higher levels of A and P investment for two reasons. First, core sales came in towards the top end of our guidance range and second, gross margin performance was stronger than expected. Net interest expense of $72,000,000 represented an increase of $2,000,000 from the prior year and a normalized income tax provision $2,000,000 was recorded in Q1. Relative to normalized diluted earnings per share, we recorded a loss of $01 in the quarter. But this was $05 to $08 above our guidance range without any discrete tax benefits distorting operating results. We had an operating cash outflow of $213,000,000 versus a positive cash flow of $32,000,000 in the year ago period.

30m 3s

However, the first quarter is typically Newell's smallest quarter of the year due to seasonality and as a result it has always historically been a cash take quarter. Last year, we were able to break the trend due to a significant contribution from working capital. Which lowered our cash conversion cycle by thirty days. Coupled with a below target cash bonus payout, which is always made during the first quarter of the year. This year, our cash conversion cycle did improve by four additional days, but it would have improved even more absent a decision to pull some inventory purchases forward to avoid impending tariff increases. A significantly higher cash bonus payout versus year ago also negatively impacted Q1 operating cash flow. Our net leverage ratio for the quarter was 5.3 times, which compares favorably to Q1 of twenty twenty four, when it was 5.6 times. Chris mentioned several ways we are mitigating the impact impact of looming tariffs. One of which included additional procurement and supply chain related cost savings. Recently, have been asked with increased frequency if there is still ample gross margin runway ahead of us. Thus, before I take you through our outlook for the full year and second quarter, I would like to address that.

31m 12s

Newell Brands has 42 global manufacturing plants, and as mentioned earlier, 15 are in The U. S. And two USMCA Compliant Facilities Are Located Just Over The Border In Mexico. We have a strong frontline engagement program focused on continuous improvement that we refer to as PEEK, which is a mountain climbing metaphor which connotes a never ending climb to the summit of continual improvement. Within peak there are six levels of attainment, and each level generally takes twelve to twenty four months depending on the phase, size and complexity of the site to complete. Our first sites understandably took a little longer to ramp. But more recent sites have been moving faster through the program. Phase one is referred to as foundations, Phase two is base camp. Phases three through five are designated as climb one, two or three. And this is where we expand in site extend across the value chain, or consolidate and optimize respectively. Finally, phase six is the summit. Where continual improvement has become the cultural norm and as such is fully embedded in everything we do. Now with respect to our 42 plants, 15 of our smaller plants have not started their journey. Seven are in Phase one, and 10 plants are in both phases two and three.

32m 27s

This means we have any plants that have reached phases four through six yet.

32m 32s

Let me repeat that. We don't have any plans in phases four through six. In addition to our manufacturing facilities, we have seven North American service centers all of which are in Phase one through Phase three of peak.

32m 45s

And we have only 14 distribution centers out of roughly 70 in total that are currently in either Phase one or two. So yes, while we have made and are continuing to make solid progress in gaining meaningful cost efficiencies, we are not even halfway on our journey to the summit continuous improvement. Leaving ample room going forward us to continue to improve Newell's gross margin and by proxy operating margin. And of course, Peak is just one of the many cost reduction and supply chain efficiency programs we are scaling across the enterprise. In just the past three years, we have reduced our supply chain staffing needs by three eight hundred positions through our automation efforts. Which gives us a tremendous opportunity to capture highly accretive unit economics as we look to leverage and monetize our strong domestic manufacturing base across our tariff advantaged categories. Now turning to our outlook, having made a series of swift interventions including targeted pricing actions incremental cost reduction efforts and rapid sourcing decisions, in conjunction with our Q1 bottom line over delivery we expect to fully offset on a full year basis all bucket one tariffs Chris referenced during his prepared remarks. Therefore, today we are affirming our 2025 financial outlook for net sales normalized operating margin and normalized earnings per share.

34m 2s

Specifically, net sales are still expected to be between negative 4% and negative 2% which now includes an approximate 1% headwind largely driven by category exits. Normalized operating margin remains unchanged at 9% to 9.5%, which at the midpoint represents roughly 110 basis point improvement from 2024. And is more than double our evergreen target of 50 basis point improvement each year. And our normalized diluted earnings per share range is unchanged at $0.70 to $0.76 which represents an 18% increase versus 2024 at the midpoint and on a tax equivalent basis. Please note that this normalized diluted earnings per share range still assumes an effective tax rate in the low to mid teens but also includes a higher level of expected interest expense which we will likely incur when we refinance the remaining balance on our outstanding April 2026 notes at some point later this year. With all this being said, it becomes clear that the only substantive change we are making to our full year 2025 guidance relates to core sales. Core sales are now expected to be between minus 3% to minus 1% versus our previous expectation for core sales that finished the year between minus 2% and plus 1%.

35m 14s

As Chris mentioned earlier, this change is solely due to a slightly more pessimistic view of category growth. Which we now expect to be essentially down 1% to 2% in 2025. Previously, we had expected our categories in aggregate to be flat.

35m 30s

Finally, for the full year, we have widened our operating cash flow range between $400,000,000 to $500,000,000 from the previous range of $450,000,000 to $5,000,000 primarily due to higher tariff induced inventory valuations. Putting all this together and combining projected cash flow and EBITDA growth, we continue to expect a year end 2025 leverage ratio about 4.5 times. Which is roughly three quarters of a turn better than where it sits today and moves us closer to our longer term ambition of being an investment grade debt issuer. As it relates to the second quarter of twenty twenty five, we expect both net and core sales to decline 5% to 3%. Operating margin to be between 10.410.8%, and with a tax rate in the mid teens normalized diluted earnings per share of $0.21 to $0.24 So in closing, despite the challenging macroeconomic environment, we remain confident that the substantial investments we have made to strengthen our core capabilities are accelerating Newell's business transformation. And have put us in a position to not just navigate through today's dynamic business environment, but to actually emerge even stronger. This is because we have significantly more categories which should benefit from these increased tariffs than be harmed by them.

36m 45s

Due to our strong domestic and USMCA compliant manufacturing capabilities. It is for this reason we are affirming our twenty twenty five financial outlook for net sales normalized operating margin and normalized EPS as it relates to all bucket one tariffs which as noted in our press release include the initial two rounds of IEEPA tariffs on China totaling 20% Section two thirty two global steel and aluminum tariffs all other reciprocal tariffs of 10% currently in effect for countries outside of China and any retaliatory tariffs that other countries have enacted against The United States. If the additional 125% China tariff remains in effect for the full year, we currently estimate based on a comprehensive sensitivity analysis we have conducted that the unmitigated impact could reduce Newell Brands 2025 normalized operating earnings per share by approximately $0.2 That said, we already have a clear line of sight to recover at least half of this impact which means the net impact of the continued 125% China tariffs for the rest of the year could be a reduction of up to $0.10 on our normalized EPS guidance range of $0.70 to $0.76 Operator, we'll now open the call to questions.

38m

Thank you.

38m 1s

At this time, we will now conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait In order to stay within the time scheduled for the call, please limit yourself to one question during the Q and A session. Please standby while we compile the Q and A roster. Our first question comes from Andrea Teixeira from JPMorgan. The floor is yours.

38m 34s

Thank you, operator, and good morning, everyone. I wanted to just go back to what you both said in terms of the retail destocking and also clarification on the tariffs and the 125%. But just on the destocking and consumption, you can walk us through how was the exit rate for consumption and if we are mostly out of it seems like from your second quarter guidance, you still assuming some destocking by retailers and how we should be thinking about those. As you set yourself to the big season for back to school? And then second would be the [indiscernible] did call out that it was not included in your guidance. But the $0.20 impact and you would have mitigation for half of it. So we are just wondering if you can explain what those one is the likelihood and the mitigation not the likelihood, of course, it's out of your control, but what are the mitigation efforts that you would see and why to begin with you didn't include that tariff in the guide? Thank you.

39m 50s

Yep, very good, thanks Andrea. Let me start with the first part of your question. Through the first quarter, we delivered obviously core sales growth of minus 2.1%, which was at the high end of our guidance range and frankly a little bit better than than our base plan. [indiscernible] through Q1, we believe we're on track. We decided to lower our market growth assumption from what was previously flat when we issued guidance in February to now down 1% to 2%, out of a spirit of caution and prudence, given what we've seen from consumer confidence levels and broader macroeconomic forecast. We have not yet seen consumption levels decline in our categories broadly versus our plan. But we believe that it's prudent for us to do that because we didn't want to wind up over planning the inventory and having too much cash flow. So that's why we took the decision to lower the forecast for market growth this year. We believe it's prudent. We believe it derisks the plan. And frankly, we believe that we have a plan to to fully offset that and not have an impact operating income or earnings per share. As a result. On retailer, inventory levels, we really didn't see a significant change in retailer inventory levels in Q1.

41m 31s

Of any magnitude. Recall that the liberation day tariffs were announced on April 2, so after Q1 ended. And so we didn't see a big surge in retailer inventory levels Q1. That being said, as we've talked many times in the past, we do tend to look at our business on six month periods versus quarterly periods, because sometimes order flow is associated with promotional events can drive a point or two of difference between one quarter and another quarter. So relative to our going in plan, we believe we're right on track for the first half of the year. Including the Q2 guidance when put together with the Q1 result. On tariff mitigation, as we said in the prepared remarks, we have taken already proactive action to fully mitigate the tariffs that we mentioned in our bucket one. Which include all tariffs except for the additional 125% on China. We chose to put that as a sensitivity because frankly, there's a lot of discussion about that tariff level being unsustainable. We're not sure if it's going to sustain for the year or not. If it does sustain for the year, our biggest exposure is the baby gear category. Now let me put that into perspective a little bit.

43m 3s

Because as I said, we've already taken a number of mitigations. Actions on baby gear. So first of all, if you look at the baby business, about 20% of our baby business is baby care. Which is the Nook brand primarily. On the Baby Care business, we are not tariff exposed, and in fact we are tariff advantaged because we manufacture the Nook brand in a manufacturing plant in Wisconsin. So we believe on that business, we are likely to gain market share as many of our competitors are sourcing from China they are going to have tariff costs, we are not. And so we're in active discussions with retailers right now on the baby care business to move their shelf space from China sourced products to our Wisconsin sourced products. There's then a second part of the baby business, which is the gear business that's sold outside The United States, which is another 20% of the business, that also is not impacted by tariffs. And then there's the remainder of the baby gear business, which is about 60% of the overall baby business that is generally sourced from China and sold in The United States.

44m 16s

That part of the business we've taken two rounds of pricing so far. We took a 10% price increase for the tariffs that was effective on April 1. That has already gone into effect. We announced a second 10% price increase that's going into effect tomorrow, So we will have priced up the Baby Gear products by about 20% to date. We have not priced yet for the 125% tariffs, for a couple of reasons. One is we accelerated, as Mark mentioned, inventory purchases into The United States prior to the implementation of the tariffs. And so as we sit here today, we have probably three or four months of inventory on hand in The US that is not subject to the tariff. We've also paused additional input or orders of inventory from China at this point, so we're not paying the tariff at this point. At some point, we will begin to run out of inventory Retailers will begin to run out of inventory. And we will turn back on reordering from China. When that happens, because the whole industry sources from China we would expect that we and the rest of the industry will take additional pricing to offset the tariff cost.

45m 43s

And so, that's but we're monitoring it on sort of a daily basis. If the tariff regime changes in the meantime, think we're well positioned If the tariffs remain in effect, I think also we are well positioned despite what will likely be a period of some volatility during this transition period.

46m 8s

Thank you very much. Thank you.

46m 12s

Thank you for your question. Our next question comes from the line of Lauren Lieberman from Barclays. The floor is yours.

46m 23s

Hey, thanks. Good morning.

46m 25s

You guys mentioned looking to utilize your U. S. Capacity and talking to retailers and, you know, effectively looking to contract manufacturer in your plants, I think is what you were suggesting. So I just wanted to understand that a little bit better. Are you considering doing private label for retailers? Just want to understand a little bit more about in the near term, how you were what you meant sort of say about leveraging The U. S.-based manufacturing and the excess slack that you have in the system? Thanks.

46m 56s

Yeah, thanks Lauren. Yeah, let me clarify. We've been asked by a number of retailers whether we would be willing to do their private label because much of the private label products that retailers are selling are sourced from China. Our answer has been that we're not really set up to do that. So that's not what we're referring to. Instead, what we're recommending is that the retailers basically discontinue discontinue their private label product and replace it with our branded product. In addition, there's a number of our competitive brands that are 100% sourced from Asia that are subject to significant tariffs where we are not. And so we're recommending there that retailers replace other branded products that are sourced from Asia with our branded products that are sourced from either The US or Mexico. Let me give you an example. We have a blender plant in Mexico. It's one of our two Mexican blender plants. Have invested over the last several years significant amount of money in automating that blender plant And as a result, the capacity on that blender plant has virtually doubled. And we are operating with 50% capacity So we can scale up that blender plant to take and supply The US market blender plant largely today supplies Latin America.

48m 26s

It does not supply The US. But almost all blenders that are sold in The US come from either China or other Southeast Asia countries. That are going to be subject to some amount of tariff our blender plant in Latin America or in Mexico is not subject to any tariffs and so we believe it's going to create a competitive advantage. So we are in active dialogue with retailers at discontinuing other branded blenders and replacing them with Oster branded blenders because our products will become a much better value versus competitive blender products.

49m 3s

That's an example of what we're trying to talk about here.

49m 6s

Okay, that's great. Thank you.

49m 9s

And then also, I know you mentioned in terms of your core sales guidance and your expectations on categories, I just want to make sure I heard it correctly that at this point you haven't really seen any change in consumer behavior in your categories that is different than what you had in your budget. But that you're adjusting the core sales guidance on an assumption that the environment does become more challenged and to avoid having excess inventory if that comes to pass. Yes, that's correct. And it's interesting because it's a little bit hard to predict We just felt like it was prudent to do that based on sort of the macro forecast, even though we haven't seen it. It could be that we're wrong and the category does better than we think. One of the trends that we been talking with market researchers about is if consumers begin to cut back on eating out at restaurants and that type of thing, and start to spend more time eating at home, that generally is a is tailwind for our category of our kitchen products. And so it's possible that depending on how this plays out, we may be wrong and overly conservative in our outlook.

50m 27s

But we felt like we would rather on the side of being a little bit more muted in our category growth outlook to ensure that we don't overbuild inventory and ensure that we deliver the cash flow that's in our cash flow forecast.

50m 43s

Perfect. Okay. Thanks so much. I'll pass it on.

50m 46s

Thank you for your question. Our next question comes from Steve Powers with Deutsche Bank. The floor is yours. Steve Powers, the floor is yours. Sorry about that.

51m 9s

I was on mute.

51m 12s

Assuming the [indiscernible] the China tariffs do remain, it sounds like you would not really start to feel the impacts that you've called out until the second half of the year. So a couple of questions around that. First, we think about the annualized twelve month impact should we be thinking kind of 2x as a run rate? Or would the longer term impacts be a little bit more muted because of further mitigation and maybe some seasonality? Question number one. And then if you could, just sort of the sensitivities that you've run would be the analogous impacts on operating cash flow, both in fiscal twenty twenty five and on an annualized basis? As well as on your go forward leverage ratio expectations.

51m 53s

Great questions. So as we think about the tariff effects, they would, as you rightly said, largely fall into the second half of the year. As we've done our math, we probably think the impact would be roughly 40% in third quarter, 60% in the fourth. That's probably driven by some of the commentary that Chris offered earlier. As we sit here today, at March 31, home and commercial had about one hundred and ten days on hand, learning development was around 120. Outdoor and rec had a higher number than that. So we have inventory that we can actually bleed through and work into the system. As far as the cash impact, if that $0.10 that we can't mitigate actually does come home to roost, we put that in on an after tax basis, that's probably a $30,000,000 impact to operating cash flow in the current year. Now that said, we widened our range to 400 to five hundred million dollars and so entirely reasonable to assume it could fall within And then as far as trying to project that out into '26, frankly, you know, I don't think that's a game we really wanna play right now. Because I think people are thinking about tariffs in isolation.

52m 52s

And I'm not an economist, I'm not a politician, most certainly, but there's lot of other things that play here. And we're talking about consumer dynamics, fuel prices are down, the last few inflation reports were fairly benign. There is talk about a meaningful tax cut that would largely advantage and help the lower and middle class. So it's really, I think, too early to say what this looks like on an ongoing basis. We just know that we're well positioned as we sit here today We invested in a domestic manufacturing base that others have not. Chosen to do and we're ready and prepared to help our strategic retailers provide great high quality products to their consumers.

53m 28s

The other thing I would say on that which is interesting is that there's a bit of a timing impact here. So in all of these categories where we are advantaged, with U. S. Or Mexican manufacturing, that revenue up up lever that we expect is going to be a little bit delayed because it relies on retailers changing their store shelves or changing their merchandise events. Which tends to take a little bit of time to work through the system. [indiscernible] as a tailwind I would expect would be significantly larger in 2026 than 2025, given the timing of implementation of that. The tariff impact on baby, which again affects the whole industry, baby gear, in The US, I think creates a little bit of a near term issue [indiscernible] if the market moves up in pricing, which I expect it will, if it sustains, it's unclear whether that continues as a headwind into 'twenty six or not.

54m 36s

Yes. Okay. Very good. Very good. And do you have it sounds like you have a lot of active conversations ongoing where you are competitively advantaged. In terms of our expectations, when do you think, I mean, to your point, most of this as you are successful probably benefits next year more than this year. But when do you feel like those conversations will start to materialize in actual contracted change.

55m 7s

Yes, so we've seen a couple of them already. I mentioned in the prepared remarks, [indiscernible] we've gotten some wins there because some of the competitive product was sourced from China. The retailer that was selling that has basically discontinued that item and moved their entire business back to us. So that's a win that will start to materialize in July. Also on Rubbermaid food storage, we've gotten significant uptake in that business. I think I mentioned on the last call, we have a major innovation that's launching this summer with Rubbermaid EasyStore. That's replacing EasyPine lids. It also happens in that business that we manufacture that product in Ohio And much of the competitive product is coming from Asia. And so we've gotten significant wins on that. Both in terms of promotions that are shifting from competitive product to us and in terms of some of the private label product being delisted entirely because it's no longer economically viable. That was coming from China. We are Beyond those two categories, we are in active discussions on 19 total categories. So we factored those two into our guidance, there are 17 others where we believe we've got a significant competitive advantage that we're having active discussions across our top 10 retailers as we speak. [indiscernible] how to navigate and move their stores to advantage our brands.

56m 55s

Okay. Thank you. That's very helpful framing. Appreciate it. I'll pass it on.

56m 59s

Thank you for your question. Our next question comes from Bill Chappell with Truist Securities. The floor is yours.

57m 12s

Thanks. Good morning. Hey, just Morning, Bill.

57m 16s

Taking a taking a step back guess I'm not a % sure I understand why you're continuing to have guidance. And I say that if I understand kind of how you operate and you understand your tariff exposure and pricing. But it seems like forecasting market growth, especially when it's a combination of volume and price, is next to impossible at this point for all your various categories. So I'm maybe help us understand how you came to that estimate. And are you expecting price to be up double digits and volume to be down double digits? And how your competitors will I'm just trying to understand how we get confidence in and not necessarily your numbers in a vacuum, but the market growth over the next two, three quarters?

58m 9s

Yes, it's a good question. We spend fair amount of time talking about that. And I think we feel like in the majority of our business, is not tariff impacted. And so when we're talking about the tariff impact, the tariff impact of significance is largely this China 125% which is largely centered on the baby gear category, which is for import into The US, which is less than 10% of the total company, revenue. And so for 90 plus percent of our business, the tariff impact is relatively minor And And we've got a plan to fully offset it, as I mentioned. And so we think that our thought on this is that we have pretty good visibility in internally to the plan, how we're adjusting the plan, how we're offsetting this, And we have a view of what we would do [indiscernible] if this 125% sustains on China. You're right that our ability to forecast in the current macro environment has become more challenged. But I think our other view is that given the data that we have, we believe that providing some guidance is helpful to the street. Because if we left it out there with no guidance, we feel like people would be all over the map and not really understanding.

59m 43s

And we actually feel I think, better about our position than what I think the market was thinking about our position over the last three months. Because if you look back on this period, as I mentioned in the prepared remarks, a year or two from now, I actually think this is going to be a benefit for Newell, all in.

1h 6s

Because the advantaged categories that we have with our US manufacturing base significantly exceed the the number of places where we're disadvantaged. We've heard some of our competitors who are 100% sourced from China talk about going out of business. We're not anywhere close to that position. We're talking about 19 product categories where we're competitively advantaged, where we're selling we've got incremental capacity, And by the way, that incremental capacity with when you factor in the fixed cost element of our manufacturing base, is highly profitable. And so if we do our job well, and sell the incremental volume on our US and Mexican manufacturing base, I think we're going to come out stronger over medium and long term [indiscernible] than if the tariffs had not gone into place. And if I could, we've talked in the past about how we've largely rebuilt our internal management reporting systems. And our new trade fund management system that allows us to get much better price promotion diagnostics. And so we feel that we have demonstrated the ability to be pretty good with respect to our forecast as of late. And then as Chris intimated, you know, we feel guidance is frankly an obligation of management.

1h 1m 28s

You know, we don't own this company. We have an obligation to our owners to tell them what we know. Now, as part of our approach to this particular exercise, will say that we really went out of our way to de risk our fiscal year plan. And that's why I think we've been so communicative on all these different elements as we sit here today.

1h 1m 45s

Yeah, I appreciate that. It's still It seems like it's in a vacuum because we don't know if you're competitors have liquidation sales or what they do with pricing or stuff like that. That's what understand you can forecast. I'm just trying to understand how you forecast your competitive space. But thanks a lot. Thank you for your question. Our next question comes from Brian McNamara from Canaccord Genuity. The floor is yours.

1h 2m 22s

Hey, good morning, guys. Thanks for taking the questions. I guess the China sensitivity sounds a little worse than we would have expected given your relatively low exposure there and your high domestic sourcing. Is it simply just lack of pricing in the baby categories specifically with triple digit tariffs in place? Or is there anything else we should be considering?

1h 2m 44s

I think it's primarily driven by the baby category. Because that's our 70% of our of our China import exposure is the baby year category. The balance of what's coming from China to The US We've had a plan in place that we've been working on for a number of years, as I mentioned, to move out of China We are accelerating that plan as we speak. And so there could be a small amount of impact in a few other places, but the majority of the impact is the baby gear category. By the way, the baby gear category, I think what Mark said or what we said was that at this point, we've got a plan to mitigate at least half of the $0.20 impact. It could be better than that. Because we're not alone in this, the majority of the stroller market today is in the super premium and premium category. Those brands are all affected by this as well, And Graco being positioned at the high end of mass could wind up being a beneficiary. As prices in the market move up not just for us but for everybody, depending on how this tariff sustains. So that's the primary impact.

1h 4m 10s

The other piece of the puzzle is, look, said it's $0.20 a assuming that $1.25 China tariffs stay in force for the full calendar year. We said, as we sit here today, we found ways that we think we can offset half of it. Roughly. Well, we still have eight months to go. And the last thing we're going do is sit on our hands. So the full intention is to continually chew against that. And we're optimistic that with the team we have in place, and the lines that we have in the water, to bring in incremental sales we can continue to make headway.

1h 4m 45s

I appreciate the transparency there. Secondly, Chris, you just alluded to this a little while ago, but your market especially the small kitchen appliances still have some pretty significant sourcing, many are 100% as you said. If triple digit tariffs remain in place on China, wouldn't this result in material consolidation with smaller players effectively dropping out of the market and effectively widen your competitive moat?

1h 5m 12s

Yes. No question about it. And that's we think we've got that opportunity in a number of product categories. I think I mentioned there's 19 product categories that we think we are competitively advantaged And we do think that there are going to be some competitors that basically drop out that's going to allow for significant market share gains for us in some of these categories. As I mentioned on the prepared remarks, the two places where we're seeing already wins are [indiscernible] vacuum sealing with the FoodSaver brand and in the Rubbermaid food storage business. But we've, as Mark said, got a lot of lines out in the water right now And I think we're in active discussions with retailers on shifting their shelf space and shifting their merchandising to our brands that are made in The U. S. If we could wave a wand and either make the Chinese 125 tariffs go away or be guaranteed they would be in place for the full calendar year, we would take the latter based on our positioning in market. And based on our strong domestic manufacturing base and based on what we know about the competitive set. Now, might be some temporal disruption, but for the mid and long term, we're well positioned to be advantaged by this scenario.

1h 6m 31s

Very helpful. Thanks, guys. Best of luck.

1h 6m 35s

Thank you for your question. Our next question comes from Filippo Falomi. At Citi. The floor is yours.

1h 6m 46s

Hi, good morning everyone.

1h 6m 49s

I want to ask you on pricing. Just following up on Bill's question. Based on the announced pricing as of today, what are you expecting in terms of price contribution in your core sales guidance? And just roughly like what elasticities are you assuming based on your expected response from competitors?

1h 7m 9s

Right now, based in our sales walk and our build bridges we would tell you that for the full year, we think pricing net of elasticity will be up a point or two. And that's a total company number?

1h 7m 23s

Being international.

1h 7m 24s

Correct.

1h 7m 25s

Correct.

1h 7m 26s

Got it.

1h 7m 27s

Got it.

1h 7m 27s

Okay.

1h 7m 28s

And then, just to follow-up on the baby gear category. You mentioned last time, in the Trump administration, you were able to get an exemption for those categories, or the industry was able to get an exemption for those categories. Are there conversations currently to ask for an exemption? Just any thoughts on potentially getting the exemption again this time.

1h 7m 57s

Yes.

1h 7m 58s

We are actively engaged in lobbying efforts to get an exemption for baby gear products sourced from China. And the Trump administration was the administration that gave the exemption for baby gear products. In the first term when the initial China tariffs went into effect. It's a fluid situation so I certainly can't predict the outcome of it. But I can say that there are certainly efforts ongoing not just by us at Newell, but also by the industry on this on the lobbying front.

1h 8m 42s

Great. Thank you so much, guys.

1h 8m 45s

Thank you for your question. Our last question comes from Olivia Tong at Raymond James. The floor is yours.

1h 8m 55s

Great. Thank you so much. You mentioned no change in your market share outlook. But it's you were able to secure new distribution food storage. Can you talk through that a little bit in terms of how you're thinking about some of the discussions that you're having in the other 17 categories? That's my first question. And then second, you price in any other categories beyond baby? And then my last question is just around your key industries, what your competition is doing, and if there's any excess capacity outside of China or even domestically because, as you mentioned, the efficiency improvements you were able to achieve in The U. S. In the blender category. Getting to 50% more space. Is there other capacity out there that others are able to capitalize on?

1h 9m 44s

Thanks.

1h 9m 47s

Yeah, so let's start with on the pricing. We did take select pricing on some other goods that were sourced from China that we expected to be sourced from China for a long period of time. It was very small so the 20% pricing that we put into effect effective as of tomorrow [indiscernible] I would say, 90% on baby gear, but there was 10% on some other small businesses that we have that we don't anticipate moving out of China. In the near term. But maybe here, for purposes of the financial modeling, was the major place where we took the pricing. From a capacity standpoint, we don't think that there's significant excess capacity in The US or Mexican market. On the categories where we're advantaged. We think many of our competitors have effectively shut down capacity and moved capacity to source finished goods players in Asia. A lot of these a lot of these categories. So I mentioned the two categories where we've already secured wins, On the other 17 categories where we're having discussions, this is still relatively new. So recall that it's only been about four weeks since the Liberation Day tariffs have been announced. Even though it seems like a long time.

1h 11m 19s

And many retailers are still trying to understand the impact of those tariffs and how they're going to mitigate them. Because they affect a lot of different categories, not just that Newell participates in, but that the retailer participates broadly in.

1h 11m 35s

And so we are showing up with a proposal and plan for the categories in which we compete and where we're competitively advantaged As I mentioned, at each of our top 10 retail customers, we've already had initial conversations top to top with all 10 of them. And we're now starting to drive to the next steps, is to go down and begin to have discussions with merchants. What I can tell you is that many of our retailers have paused or canceled their purchase orders from China. In these categories where we're advantaged. So we do believe that there's going to be a supply disruption in the categories where we're competitively advantaged. And that's going to position us I think, to be able to come in and fill in that incremental inventory level. We have not factored that into our guidance at this point, so that is upside to our guidance on the extra 17 because we don't have commitments at this point. And so That's how we're thinking about it and how we're approaching it. [indiscernible] we are having active discussions as we speak across all of these categories with all of these top retailers.

1h 12m 56s

Great, thank you.

1h 13m

Okay.

1h 13m 1s

Thank you all for joining. And we look forward to talking in follow-up conversations.

1h 13m 7s

That's great. Thank you. This does conclude the question and answer session. Thank you for your participation. A replay of today's call will be available later on the company's website at irnuelbrands.com. You may now disconnect. Have a great day.

Key Insights

Q1 2025 results were in line or ahead of expectations, with core sales at -2.1% (improved sequentially and YoY), normalized gross margin up 150 bps to 32.5% (seventh consecutive quarter of improvement), and normalized operating margin and EPS exceeding guidance.
Newell is maintaining its 2025 net sales guidance (-4% to -2%), normalized operating margin (9% to 9.5%), and normalized diluted EPS ($0.70 to $0.76, up 18% YoY at midpoint), despite moderating core sales outlook to -3% to -1% due to more cautious category growth assumptions.
The company has significantly reduced its China sourcing exposure (from 35% of COGS in 2018 to 15% in 2024, targeting 10% by end of 2025), and is leveraging its robust US and USMCA-compliant manufacturing base to offset tariff impacts and pursue incremental sales opportunities in tariff-advantaged categories.
Newell has fully offset the impact of all "bucket one" tariffs (including initial China, steel/aluminum, and reciprocal tariffs) through cost savings, procurement actions, FX benefits, and targeted pricing; the incremental 125% China tariff is excluded from guidance but could reduce 2025 EPS by up to $0.10 after mitigation, mainly impacting the baby gear category.
The company is actively engaging with retailers to replace private label and competitor products (often China-sourced) with Newell's US/Mexico-made brands, already securing wins in food storage and vacuum sealing; further upside is possible from ongoing discussions in 17 additional categories not yet included in guidance.

Recent Transcripts

Q1 results exceeded expectations; tariff mitigation and domestic manufacturing drive resilience.

Group revenue flat, EBITDA and net income up, strong cash flow and debt reduction post-Princes integration.

Netwealth delivered record growth in revenue, EBITDA, and net inflows for H1 FY25.

Newell Brands achieved strong margin expansion and balance sheet improvement despite sales declines in 2024.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$9.4B	$11B	$9.5B	$8.1B	$7.6B
Cost of Revenue	$6.3B	$7.3B	$6.6B	$5.7B	$5B
Gross Profit	$3.1B	$3.3B	$2.8B	$2.4B	$2.5B
Gross Profit %	33%	31%	30%	30%	34%
R&D Expenses	$144M	$153M	$140M	$117M	$0

2020

2021

2022

2023

2024

Revenue

$9.4B

$11B

$9.5B

$8.1B

$7.6B

Cost of Revenue

$6.3B

$7.3B

$6.6B

$5.7B

$5B

Gross Profit

$3.1B

$3.3B

$2.8B

$2.4B

$2.5B

Gross Profit %

33%

31%

30%

34%

R&D Expenses

$144M

$153M

$140M

$117M

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	-$770M	$572M	$197M	-$388M	-$216M
Dep. & Amort.	$357M	$325M	$296M	$334M	$323M
Def. Tax	-$277M	-$41M	$97M	-$283M	-$114M
Stock Comp.	$41M	$52M	$12M	$50M	$74M
Chg. in WC	$495M	-$83M	-$1.2B	$783M	$79M

2020

2021

2022

2023

2024

Net Income

-$770M

$572M

$197M

-$388M

-$216M

Dep. & Amort.

$357M

$325M

$296M

$334M

$323M

Def. Tax

-$277M

-$41M

$97M

-$283M

-$114M

Stock Comp.

$41M

$52M

$12M

$50M

$74M

Chg. in WC

$495M

-$83M

-$1.2B

$783M

$79M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$981M	$440M	$287M	$332M	$198M
ST Investments	$0	$0	$0	$0	$0
Cash & ST Inv.	$981M	$440M	$287M	$332M	$198M
Receivables	$1.7B	$1.5B	$1.3B	$1.2B	$878M
Inventory	$1.6B	$2B	$2.2B	$1.5B	$1.4B

2020

2021

2022

2023

2024

Cash

$981M

$440M

$287M

$332M

$198M

ST Investments

Cash & ST Inv.

$981M

$440M

$287M

$332M

$198M

Receivables

$1.7B

$1.5B

$1.3B

$1.2B

$878M

Inventory

$1.6B

$2B

$2.2B

$1.5B

$1.4B

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $2.4B
IPO Date: 3/17/80
CEO: Mr. Christopher H. Peterson
Fulltime Employees: 24K
Sector: Consumer Defensive
Industry: Household & Personal Products
Country: US
Exchange: NASDAQ Global Select

Peers

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CHD

0.92%

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KMB

0.6%

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Watchlist

Earnings

Report Date

Apr 30, 2025

Reported Revenue

1.6B

Miss -20.3%

Avg 1d Change

24.02%

Report Period

Q1 2025

Reported EPS

-0.01

Beat +85.71%

Implied Move 1d

16.44%

Transcript

10m 2s

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12m 49s

14m 18s

15m 48s

17m 12s

18m 39s

20m

21m 22s

22m 46s

24m 4s

25m 20s

27m 58s

Yeah. We can hear you.

28m

That's great. Thank you for your patience, everyone. Allow us to begin again.

28m 8s

28m 47s

30m 3s

31m 12s

32m 27s

This means we have any plants that have reached phases four through six yet.

32m 32s

32m 45s

34m 2s

35m 14s

35m 30s

36m 45s

38m

Thank you.

38m 1s

38m 34s

39m 50s

41m 31s

43m 3s

44m 16s

45m 43s

46m 8s

Thank you very much. Thank you.

46m 12s

Thank you for your question. Our next question comes from the line of Lauren Lieberman from Barclays. The floor is yours.

46m 23s

Hey, thanks. Good morning.

46m 25s

46m 56s

48m 26s

49m 3s

That's an example of what we're trying to talk about here.

49m 6s

Okay, that's great. Thank you.

49m 9s

50m 27s

50m 43s

Perfect. Okay. Thanks so much. I'll pass it on.

50m 46s

Thank you for your question. Our next question comes from Steve Powers with Deutsche Bank. The floor is yours. Steve Powers, the floor is yours. Sorry about that.

51m 9s

I was on mute.

51m 12s

51m 53s

52m 52s

53m 28s

54m 36s

55m 7s

56m 55s

Okay. Thank you. That's very helpful framing. Appreciate it. I'll pass it on.

56m 59s

Thank you for your question. Our next question comes from Bill Chappell with Truist Securities. The floor is yours.

57m 12s

Thanks. Good morning. Hey, just Morning, Bill.

57m 16s

58m 9s

59m 43s

1h 6s

1h 1m 28s

1h 1m 45s

1h 2m 22s

1h 2m 44s

1h 4m 10s

1h 4m 45s

1h 5m 12s

1h 6m 31s

Very helpful. Thanks, guys. Best of luck.

1h 6m 35s

Thank you for your question. Our next question comes from Filippo Falomi. At Citi. The floor is yours.

1h 6m 46s

Hi, good morning everyone.

1h 6m 49s

1h 7m 9s

Right now, based in our sales walk and our build bridges we would tell you that for the full year, we think pricing net of elasticity will be up a point or two. And that's a total company number?

1h 7m 23s

Being international.

1h 7m 24s

Correct.

1h 7m 25s

Correct.

1h 7m 26s

Got it.

1h 7m 27s

Got it.

1h 7m 27s

Okay.

1h 7m 28s

1h 7m 57s

Yes.

1h 7m 58s

1h 8m 42s

Great. Thank you so much, guys.

1h 8m 45s

Thank you for your question. Our last question comes from Olivia Tong at Raymond James. The floor is yours.

1h 8m 55s

1h 9m 44s

Thanks.

1h 9m 47s

1h 11m 19s

1h 11m 35s

1h 12m 56s

Great, thank you.

1h 13m

Okay.

1h 13m 1s

Thank you all for joining. And we look forward to talking in follow-up conversations.

1h 13m 7s

Key Insights

Q1 2025 results were in line or ahead of expectations, with core sales at -2.1% (improved sequentially and YoY), normalized gross margin up 150 bps to 32.5% (seventh consecutive quarter of improvement), and normalized operating margin and EPS exceeding guidance.
Newell is maintaining its 2025 net sales guidance (-4% to -2%), normalized operating margin (9% to 9.5%), and normalized diluted EPS ($0.70 to $0.76, up 18% YoY at midpoint), despite moderating core sales outlook to -3% to -1% due to more cautious category growth assumptions.
The company has significantly reduced its China sourcing exposure (from 35% of COGS in 2018 to 15% in 2024, targeting 10% by end of 2025), and is leveraging its robust US and USMCA-compliant manufacturing base to offset tariff impacts and pursue incremental sales opportunities in tariff-advantaged categories.
Newell has fully offset the impact of all "bucket one" tariffs (including initial China, steel/aluminum, and reciprocal tariffs) through cost savings, procurement actions, FX benefits, and targeted pricing; the incremental 125% China tariff is excluded from guidance but could reduce 2025 EPS by up to $0.10 after mitigation, mainly impacting the baby gear category.
The company is actively engaging with retailers to replace private label and competitor products (often China-sourced) with Newell's US/Mexico-made brands, already securing wins in food storage and vacuum sealing; further upside is possible from ongoing discussions in 17 additional categories not yet included in guidance.

Earnings

Report Date

Reported Revenue

Avg 1d Change

Report Period

Reported EPS

Implied Move 1d

Transcript

Key Insights

Recent Transcripts

Income Statement

Cash Flow

Balance Sheet

Go Deeper

Related

Go Deeper

Recent Transcripts

Earnings

Report Date

Reported Revenue

Avg 1d Change

Report Period

Reported EPS

Implied Move 1d

Transcript

Key Insights