Newell Brands’ Outdoor & Recreation Segment’s Q1 Sales Climb 9.4 Percent

Newell Brands reported its Outdoor & Recreation segment showed a small operating profit in the first quarter ended March 31 as sales increased 9.4 percent.

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

The Outdoor & Recreation segment generated net sales of $336 million compared with $307 million in the prior-year period, reflecting core sales growth of 7.0 percent and the impact of favorable foreign exchange.

Reported operating income was $15 million, or 4.5 percent of sales, compared with a loss of $474 million, or negative 154.4 percent of sales, in the prior-year period. Normalized operating income was $20 million, or 6.0 percent of sales, compared with $15 million, or 4.9 percent of sales, in the prior-year period.

Companywide, net sales were $2.3 billion, a 21.3 percent increase compared to the prior-year period, as core sales growth of 20.9 percent and favorable foreign exchange were partially offset by the impact of business and retail store exits.

Reported operating income was $192 million compared with an operating loss of $1.4 billion in the prior-year period, which reflected the impact of impairment charges. Reported operating margin was 8.4 percent compared with a negative 74.7 percent in the prior-year period. Normalized operating income was $230 million, or 10.1 percent of sales, compared with $113 million, or 6.0 percent of sales, in the prior-year period.

The company reported net income of $89 million, or $0.21 diluted earnings per share, compared with net loss of $1.3 billion, or $3.02 diluted loss per share, in the prior-year period.

Normalized net income was $128 million, or $0.30 normalized diluted earnings per share, compared with $39 million, or $0.09 normalized diluted earnings per share, in the prior-year period.

In its other segments, the Commercial Solutions segment generated net sales of $471 million compared with $413 million in the prior-year period, driven by core sales growth of 12.9 percent and the impact of favorable foreign exchange. Core sales increased in both the Commercial and the Connected Home & Security business units. Reported operating income was $50 million, or 10.6 percent of sales, compared with a loss of $272 million, or negative 65.9 percent of sales, in the prior-year period. Normalized operating income was $53 million, or 11.3 percent of sales, versus $51 million, or 12.3 percent of sales, in the prior-year period.

The Home Appliances segment generated net sales of $360 million compared with $261 million in the prior-year period, reflecting core sales growth of 38.9 percent, partially offset by the impact of unfavorable foreign exchange. Reported operating income was $3 million, or 0.8 percent of sales, compared with a loss of $299 million, or negative 114.6 percent of sales, in the prior-year period. Normalized operating income was $8 million, or 2.2 percent of sales, versus operating loss of $9 million, or negative 3.4 percent of sales, in the prior-year period.

The Home Solutions segment generated net sales of $504 million compared with $377 million in the prior-year period, largely driven by core sales growth of 33.8 percent. Both business units, Food and Home Fragrance delivered core sales growth. Reported operating income was $61 million, or 12.1 percent of sales, compared with a loss of $301 million, or negative 79.8 percent of sales, in the prior-year period. Normalized operating income was $76 million, or 15.1 percent of sales, versus $16 million, or 4.2 percent of sales, in the prior-year period.

The Learning & Development segment generated net sales of $617 million compared with $528 million in the prior-year period, primarily driven by core sales growth of 17.3 percent. Core sales increased in both Writing and Baby business units. Reported operating income was $110 million, or 17.8 percent of sales, compared with $4 million, or 0.8 percent of sales, in the prior-year period. Normalized operating income was $114 million, or 18.5 percent of sales, compared with $86 million, or 16.3 percent of sales, in the prior year period.

The company’s other core brands include Rubbermaid, Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial, Products, Graco, Baby Jogger, NUK, Calphalon, First Alert, Mapa, Spontex, and Yankee Candle.

“2021 is off to a terrific start, as top-line increased 21 percent, normalized operating profit doubled and earnings per share tripled year-over-year during the first quarter, building on the momentum from the back half of 2020. Each of our business units and geographic regions delivered significant sales growth, fueled by consumption, as our supply chain teams operated with excellence and successfully managed broad-based demand surges,” said Ravi Saligram, Newell Brands president and CEO. “We are still in the early stages of realizing the full potential of our business and see tremendous opportunity for value creation through focused execution of our strategic priorities, including sustaining top-line growth, strengthening our brands through insights and innovation, driving omnichannel prowess, unlocking international potential, and expanding distribution, while serving as a force for good in the world.”

Chris Peterson, CFO and president, Business Operations, said, “Significant out-performance on top-line, in combination with productivity gains and operating leverage, drove outstanding results in the first quarter. We made further progress on deleveraging and reducing our cash conversion cycle relative to year-ago levels. Much stronger than anticipated results thus far in 2021 give us the confidence to raise our outlook for the full year both on top and bottom lines, despite additional inflationary pressures. We currently forecast core sales growth of 5 to 7 percent and normalized earnings per share of $1.63 to $1.73 for full-year 2021.”

Outlook For Full-Year and Second Quarter 2021
The company updated its full-year outlook for 2021 and initiated its second-quarter 2021 guidance.

For the full year, Newell Brands now expects sales in the range of $9.9 to $10.1 billion, up from previous guidance in the range of $9.5 to $9.7 billion. Core sales are expected to show growth in the range of 5 percent to 7 percent versus previous guidance for low-single-digit growth. Normalized EPS is now projected in the range of $1.63 to $1.73, up from $1.55 to $1.65 previously.

For the second quarter, sales are expected in the range of $2.5 to $2.58 billion, core sales growth in the range of 17 percent to 20 percent, and normalized EPS in the range of 41 cents to 45 cents.

Photo courtesy Newell Brands