Newell Brands Inc. (NYSE: NWL) said its plans to jettison product lines with $250 million in annual sales over the next two to three years will slow core sales at Jarden Corp. in fiscal 2016.
Newell Brands disclosed the detail Wednesday, when it reaffirmed its fiscal year 2016 outlook ahead of a June 16 presentation at the Deutsche Bank Global Consumer Conference in Paris, France.
The company, which completed its acquisition of Jarden Corp. and its $2.74 billion a year sporting goods business in April, said it still expects core sales growth of 3.0 to 4.0 percent and normalized earnings per share of $2.75 to $2.90.
“The company’s core sales growth guidance assumes legacy Newell Rubbermaid core sales growth of 4 to 5 percent and legacy Jarden core sales growth of 2 to 4 percent, which includes the negative impact of planned product line exits,” Newell Brands said.
Jarden core sales growth of 2 to 4 percent is roughly in line with Jarden’s pre-transaction long term “organic growth” target of 3 to 5 percent. Newell Brands expects to exit product lines with annual sales of $250 million to $300 million across both legacy businesses over the next two to three years.
In a March article, The B.O.S.S. Report said Jarden Corp.’s decision to record $145.4 million in impairment charges at its winter sports business in the fourth quarter raised questions about the future of the business. Jarden Corp.’s major winter sports brands include the K2, Marker and Volkl ski brands, but K2 Sports also owns the 5150, Morrow and Ride snowboards brands; the Line and Full Tilt alpine ski brands; the Madshus Nordic ski brand, backcountry safety gear maker Backcountry Access and the snowshoe brands Atlas, Powderidge and Tubbs.
Jarden’s largest brands are Coleman, Marmot and Rawlings. Jarden also owns more than a half dozen fishing brands.