Newell Brands reported its Outdoor & Recreation segment showed a small operating loss as core sales were down 7.4 percent.

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

The segment generated net sales of $249 million in the three months compared with $268 million in the prior-year period.

The reported operating loss for the segment was $9 million, or negative 3.6 percent of sales, compared with a loss of $75 million, or negative 28.0 percent of sales, in the prior-year period. Normalized operating loss was $5 million, or negative 2.0 percent of sales, compared with $2 million, or negative 0.7 percent of sales, in the prior-year period.

In the full year, the segment showed sales of $1,292 billion, down from $1,413 a year ago, a decline of 8.6 percent. The reported operating loss was $418 million against a loss of $64 million year ago. The normalized operating profit after non-recurring charges came to $89 million against pro format operating income of $107 million a year ago, representing a decline of 16.8 percent.

Companywide, Newell Brands’ net sales were $2.7 billion, a 2.5 percent increase compared to the prior-year period, as core sales growth of 4.9 percent was partially offset by the impact of unfavorable foreign exchange, and business and retail store exits.

Normalized operating income was $307 million, or 11.4 percent of sales, compared with $296 million, or 11.3 percent of sales, in the prior-year period. Interest expense was $69 million compared with $70 million in the prior-year period, as the company reduced its debt balance.

The company reported net income of $127 million, or $0.30 diluted earnings per share, compared with $794 million, or $1.87 diluted earnings per share, in the prior-year period. Normalized net income was $238 million, or $0.56 normalized diluted earnings per share, compared with $180 million, or $0.42 normalized diluted earnings per share, in the prior-year period.

In its other segments, the Appliance & Cookware segment generated net sales of $577 million compared with $570 million in the prior-year period, driven by core sales growth of 4.2 percent, partially offset by the impact of unfavorable foreign exchange. Reported operating income was $49 million, or 8.5 percent of sales, compared with $58 million, or 10.2 percent of sales, in the prior-year period. Normalized operating income was $51 million, or 8.8 percent of sales, versus $54 million, or 9.5 percent of sales, in the prior-year period.

The Commercial Solutions segment generated net sales of $498 million compared with $436 million in the prior-year period, driven by core sales growth of 13.8 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 $63 million, or 12.7 percent of sales, compared with $35 million, or 8.0 percent of sales, in the prior-year period. Normalized operating income was $66 million, or 13.3 percent of sales, versus $51 million, or 11.7 percent of sales, in the prior-year period.

The Home Solutions segment generated net sales of $695 million compared with $648 million in the prior-year period, reflecting core sales growth of 12.4 percent and the impact of favorable foreign exchange, partially offset by the exit from the Home Fragrance fundraising business and closure of 77 underperforming Yankee Candle retail locations during the year. Both business units, Food and Home Fragrance delivered core sales growth. Reported operating income was $138 million, or 19.9 percent of sales, compared with $96 million, or 14.8 percent of sales, in the prior-year period. Normalized operating income was $152 million, or 21.9 percent of sales, versus $112 million, or 17.3 percent of sales, in the prior-year period.

The Learning & Development segment generated net sales of $670 million compared with $702 million in the prior-year period, reflecting core sales decline of 2.2 percent and the impact of business exits, partially offset by the effect of favorable foreign exchange. Core sales growth in Baby was more than offset by a core sales reduction in the Writing business unit. Reported operating income was $72 million, or 10.7 percent of sales, compared with $100 million, or 14.2 percent of sales, in the prior-year period. Normalized operating income was $94 million.

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.

“We gained considerable momentum on our turnaround in 2020 and laid a solid foundation to deliver sustainable, profitable growth in the future,” said Ravi Saligram, Newell Brands president and CEO. “We are proud of our accomplishments in 2020, returning to meaningful core sales growth and operating margin improvement in the back half of the year, delivering stellar cash flow, significantly reducing complexity, improving productivity, accelerating eCommerce growth, and improving customer relationships. The strength and resilience of our portfolio shone through as growth in Food, Commercial and Appliances & Cookware business units offset writing softness caused by the stay at home pandemic related phenomenon. I am excited about Newell’s prospects and feel our best days are ahead as we focus on sustaining top-line growth, strengthening our brands through insights and innovation, focus on omnichannel initiatives, expand distribution and begin to unlock international opportunities.”

Chris Peterson, chief financial officer and president, business operations, said, “We ended the fourth quarter on a very strong note, delivering mid-single-digit core sales growth, operating margin expansion, excellent cash flow, and double-digit normalized earnings per share growth, all ahead of our expectations. Full-year results showed sequential improvement across key metrics, with operating cash flow exceeding $1.4 billion and free cash flow productivity above 150 percent, enabled by progress on working capital. We strengthened the balance sheet, exiting the year with a leverage ratio of 3.5x. As we look out to 2021, we are projecting low-single-digit core sales growth, a normalized operating margin improvement of 30-to-60 basis points, normalized diluted EPS of $1.55 to $1.65 and operating cash flow of approximately $1.0 billion.”

Photo courtesy Newell Brands