Newell Brands President and CEO Chris Peterson reported that the company’s Outdoor & Recreation segment remains its “weakest” division from a profitability and sales perspective and “most in need of a turnaround.” The comments from Peterson came during the company’s Q2 conference call with analysts. Peterson said management in the segment has been overhauled, and sequential improvement is expected in the second half. In the long term, expanding Coleman’s business to a broader definition of outdoor is expected to pay dividends.
“At this point, we have completely restaffed the team and have relocated the business to Atlanta while investing in the front-end capabilities required to get back to winning,” said Peterson. “While performance has been challenged, and we think it will be some time before we fully unlock the potential of the iconic brands such as Coleman, we believe the business has now bottomed and we expect trends to improve sequentially in the back half of the year, starting in the third quarter.”
In addition to Coleman, Newell’s Outdoor & Recreation segment includes Marmot, Ex Officio, Stearns, Bubba, Campingaz and Contigo.
As reported by SGB Media, Newell Brands on Friday reported that sales in the segment continued to erode in the second quarter, declining 22.5 percent to $258 million from $333 million in the prior-year Q2 period. The decline is attributed to a core sales decline of 18.2 percent and the impact of unfavorable foreign exchange and certain business exits.
The segment’s reported operating loss in the quarter was $11 million, or negative 4.3 percent of sales, compared with operating income of $5 million, or 1.5 percent, in the prior-year Q2 period. Normalized operating loss was $1 million, or negative 0.4 percent of sales, compared with normalized operating income of $14 million, or 4.2 percent of sales, in the prior-year Q2 period.
Sales in the first quarter in the segment fell 25.6 percent to $201 million. In 2023, sales slumped 24.0 percent to $999 million after sliding 11.4 percent in 2022.
In the Q&A session, Peterson admitted that while the outdoor market “is challenging,” the Outdoor & Recreation Segment is “clearly underperforming the market.”
He attributed the weakness to the “complete redo” of the segment’s leadership team over the last three to six months following its move from Chicago to Atlanta. He added that the new team is “much more capable in that business than we had previously. It’s the first thing that gives me confidence.”
Among the hires was Nicolas Duran as CEO of the Outdoor & Recreation segment. Before joining Newell, Nico served in several leadership roles at Dorel Industries, Reebok International and Adidas Group.
Peterson also said the strategies being pursued by former teams on “a number” of outdoor brands “was fundamentally flawed, in my view. And we have now changed that.”
He elaborated, “So, as an example, Coleman was exclusively focused on camping over the last few years. And I think the total addressable market of camping is significantly narrower than the total addressable market of outdoor activities. And so, we have pivoted our focus on the Coleman brand to focus on more outdoor activities, including the sidelines, backyard, beach. We’re not abandoning camping, but we are expanding the aperture. And when you do that, the total addressable market that we’re now going after with Coleman has tripled versus the previous total addressable market.”
Finally, Peterson, who took over as CEO in February 2023 following the retirement of Ravi Saligram, added that the Outdoor & Recreation segment has further “done a lot of work to redefine who is the target consumer and begin to repopulate the innovation pipeline.”
He said part of the challenge in the near term was getting the new leadership teams across brands up to speed.
“We now have a much stronger innovation pipeline on that business than we’ve had at any point since I’ve been with the company,” said Peterson. “That being said, the innovation pipeline is still sort of going to unfold over the next 24 months. So, it’s not all going to launch this quarter because of the cycle time. But you will start to see us get back with better marketing campaigns and the beginning of a new innovation pipeline starting in the back half of the year, and then we expect that to accelerate in calendar year 2025 and even more in calendar year ’26. So that’s what gives us the confidence to say that we believe that the trend in O&R has bottomed, and we expect already starting in Q3, the trend to improve sequentially.”
Newell’s other brands include Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper Mate, Dymo, EXPO, Elmer’s, Yankee Candle, Graco, NUK, Spontex, Oster, Sunbeam and Mr. Coffee.
Image courtesy Coleman
