Net Sales for Newell Brands Decline 19.2% in Q3 Results

Net sales for Newell Brands were $2.3 billion, a 19.2% decline compared with the prior year period, the company reported. This included the year over year impact from the sale of the Connected Home & Security (CH&S) business at the end of the first quarter 2022.

 

“Following strong performance over the first half of the year, results decelerated in Q3, reflecting a tough operating environment as many retailers rightsized their inventory positions, inflationary pressure on both the consumer and our business, as well as the impact of a stronger dollar,” said Ravi Saligram, Newell Brands CEO. “We expect economic uncertainty and external disruptions to persist in the near-term and are staying agile, as we adjust our playbook to this environment, while taking decisive actions to maximize profits and cash. We remain confident in the strength of our brands and our ability to drive sustainable and profitable growth over the long term.”

 

Core sales declined 10.8% compared with the prior-year period. One of seven business units increased core sales compared with the prior year period. Reported operating margin was 1.6%, including the impact of a $148 million non-cash impairment charge, compared with 10.1% in the prior year period. Normalized operating margin was 10.2% compared with 11.4% in the prior-year period.

 

Reported diluted earnings per share were $0.07 compared with $0.44 per share in the prior year period. Normalized diluted earnings per share were $0.53 compared with $0.54 per share in the prior-year period.

 

The company strengthened its financial flexibility and refinanced its unsecured revolving credit facility as well as its senior notes due April 2023. In September, the company issued $1.0 billion of senior notes and in October, used the net proceeds, together with available cash, to redeem the April 2023 notes.

 

The company's leverage ratio was 3.9 times at the end of the third quarter versus 3.1 times in the prior-year period and 3.0 times at the end of 2021.

 

“During the third quarter, we enhanced Newell's financial flexibility and maintained strong cost discipline, as results were impacted by top line deleveraging,” said Chris Peterson, president and CFO. “We remain laser focused on aligning the company's cost structure with the macro backdrop, reducing inventory and strengthening cash flow, while continuing to invest in core capabilities.”

 

The Home Solutions segment generated net sales of $510 million compared with $598 million in the prior year period, reflecting core sales decline of 11.6%, the impact of unfavorable foreign exchange and the exit of 42 Yankee Candle retail locations during the first nine months of the year. Core sales declined across both the home fragrance and Food business units. Reported operating loss was $88 million, or negative 17.3% of sales, compared with an operating income of $75 million, or 12.5% of sales, in the prior year period. The year-over-year difference was impacted by a $108 million impairment charge related to goodwill. Normalized operating income was $30 million, or 5.9 percent of sales, versus $86 million, or 14.4% of sales, in the prior-year period.