Newell Brands, Inc. announced updates to its outlook for Q3 and the full year 2022, reflecting a more challenging than anticipated operating and consumer backdrop.

Ravi Saligram, Newell Brands CEO, said, “Although we remain enthusiastic about the back-to-school season and continue to see solid growth in the Commercial business, we have experienced a significantly greater than expected pullback in retailer orders and continued inflationary pressures on the consumer. As a result of these developments and our more cautious posture for the balance of the year, we are adjusting our expectations for the second half of 2022.”

Saligram continued, “We are taking decisive actions to mitigate the impact of these challenges by further tightening our belt on cash and cost management and adjusting our supply plan. I am confident that our team can effectively navigate through the softer macroeconomic environment and address the near-term hurdles while positioning the company to come out stronger.”

To strengthen its financial position, the company is accelerating its Fuel productivity efforts, closely managing discretionary and overhead spending, optimizing its ad and promo expenses, adjusting its demand forecast and supply plans, and taking additional actions to improve working capital.

The company updated its outlook for Q3 and the full year 2022 as follows:

  • Net sales $2.21 billion to $2.32 billion ($2.39 billion to $2.50 billion previously);
  • Core sales 8 percent to 12 percent decline (1 percent to 5 percent decline previously);
  • Normalized operating margin 8.7 percent to 9.4 percent (10.7 percent to 11.0 percent previously); and
  • Normalized EPS $0.46 to $0.51 ($0.50 to $0.54 previously).

Updated Full Year 2022 Outlook

  • Net sales $9.37 billion to $9.58 billion ($9.76 to $9.98 billion previously);
  • Core sales 2 percent to 4 percent decline (flat to 2 percent growth previously);
  • Normalized operating margin 10.0 percent to 10.5 percent (11.2 percent to 11.4 percent previously); and
  • Normalized EPS $1.56 to $1.70 ($1.79 to $1.86 previously).

The full-year 2022 outlook for net sales, normalized operating margin, and normalized EPS includes the contribution from the divested Connected Home & Security business unit (CH&S) during the first quarter. Core sales growth outlook for the full year 2022 excludes the contribution from CH&S. Net sales outlooks for both Q3 2022 and full year 2022 account for the expected unfavorable foreign exchange movements, using current rates, as well as the closures of Yankee Candle retail locations and market and category exits, primarily in the Outdoor & Recreation and Home Appliances segments.

For full-year 2022, the company currently expects to deliver operating cash flow in the range of $400 million to $500 million, versus its previously expected range of $700 million to $800 million, including the impact of the loss of profits from the sale of the CH&S business as well as a one-time cash tax payment on this transaction.

The update comes as Saligram and Chris Peterson, President and CFO participate in a fireside chat at the Barclays Global Consumer Staples Conference today.

Newell’s Outdoor & Recreation segment brands include Campingaz, Coleman, Contigo, ExOfficio, and Marmot. Smaller brands include Aerobed, Bubba, and Stearns.

Newell’s brand portfolio also includes Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper Mate, Dymo, Expo, Elmer’s, Yankee Candle, Graco, Nuk, Rubbermaid Commercial Products, Spontex, Oster, Sunbeam, and Mr. Coffee.

Outdoor & Recreation segment makes up about 14 percent of sales.

Photo courtesy Newell Brands