<span style="color: #9e9e9e;">Newell Brands’ Outdoor & Recreation segment returned to core sales growth in the third quarter due to strong demand for camping gear during the pandemic.

The Outdoor & Recreation segment includes Aerobed, Bubba, Campingaz, Coleman, Contigo, Marmot, Stearns, and ExOfficio.

“The rebound in outdoor activity we started to see at the end of Q2 has continued, especially in camping gear, including tents, stoves, grills, and shelters both in America and International,” said Ravi Saligram, Newell’s president and CEO on a conference call with analysts. “We are pleased to see that Coleman in its 120 years is beginning to return to its rightful place as a brand leader in the Outdoor segment as we rejuvenate the offerings. In turn, we have driven great success in Marmot’s Superalloy Tent, an award-winning, premium, lightweight backpacking tent, which was launched in summer training and has been a top performer. Under New Business Unit’s CEO, Jim Pisani’s leadership, the team is focused on capitalizing on these consumption trends and building our plans for 2021 and beyond.”

On its second-quarter conference call, Newell officials noted that two industry executives, Jim Pisani and Bill Kirchner, have been hired to lead the Outdoor & Recreation segment’s turnaround. Prior to joining Newell, Pisani served as the global brand president of Timberland. Kirchner was formerly VP and GM, Americas for Amer Sports which owns Wilson, Louisville Slugger, DeMarini, EvoShield, Salomon, Arc’teryx, Atomic, Suunto, Mavic, and Enve.

Newell’s Outdoor & Rec. Segment’s Core Sales Climb 8.1 Percent
The Outdoor & Recreation segment generated net sales of $383 million compared with $356 million in the prior-year period, reflecting a gain of 7.6 percent. The gain reflects a core sales increase of 8.1 percent and the impact of unfavorable foreign exchange.

In the second quarter, the segment’s sales were down 20 percent.

Reported operating income was $40 million, or 10.4 percent of sales, compared with a loss of $41 million, or negative 11.5 percent of sales, in the prior-year period. Normalized operating income grew 24.3 percent to $46 million, or 12.0 percent of sales, compared with $37 million, or 10.4 percent, in the prior-year period.

Christopher Peterson, CFO and president, business operations, said the outdoor category “benefited from consumers’ preference for vacation and close to home and spending time outdoors.”

However, Peterson also noted that the strong Q3 results benefited from the pre-shipment of sales in advance of an SAP implementation at Coleman North America on October 1 that boosted sales in the third quarter. He added, “This impact will reverse and become a drag on top-line growth for the Outdoor & Recreation segment in Q4.”

In the Q&A session, Saligram further noted that Newell’s technical outdoor apparel business, led by Marmot, “is still a laggard” and the outdoor beverage business, led by Contigo, is seeing challenges because “people are not on the go” as quarantining is still being emphasized during the pandemic.

Newell’s Q3 Results Top Wall Street Targets
Companywide, sales were $2.7 billion, a 5.1 percent increase year-over-year as core sales growth of 7.2 percent was partially offset by a foreign exchange headwind and divested businesses. Sales exceeded analysts’ forecast of $2.48 billion.

Net income came to $304 million, or 71 cents a share, against a net loss of $626 million, or $1.48, in the prior-year period. Normalized net income rose 16.0 percent to $356 million, or 84 cents, compared with $307 million, or 73 cents, and well above Wall Street’s consensus target of 43 cents.

Beyond its Outdoor & Recreation segment, Newell’s major brands include Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, First Alert, Mapa, Spontex and Yankee Candle.

The strongest growth was seen in its Food, Appliances & Cookware and Commercial business units. The company’s international businesses, especially Latin America, performed better than the U.S. business.

“We believe we are starting to turn the corner and reigniting consistent top-line growth,” said Saligram. “Many of our categories are well-positioned to capitalize on the stay-at-home lifestyle with consumers spending more time in their kitchens and with their families.”

Newell reinstated its guidance after pulling earlier in the year due to the uncertainty created by the pandemic.

For Q4, the company predicts sales in the range of $2.5 billion to $2.6 billion, with flat to low single-digit core sales growth. Adjusted EPS is anticipated to be between 40  to 46 cents, compared to 42 cents in Q419.

Full-year sales are expected in the range of $9.2 billion to $9.3 billion. Core sales are expected to see a low-single-digit decline. Normalized EPS is expected in the range of $1.63 to $1.69. In 2019, normalized EPS was $1.70 on sales of $9.7 billion.

Photo courtesy Newell Brands