Moody’s Ratings downgraded the debt ratings of Newell Brands Inc., the parent of Coleman, Marmot and other outdoor brands, due to its weakening operating results. The rating agency said, “The ratings downgrade reflects ongoing pressures on Newell’s business as persistently weak consumer demand continues to impact its top line and higher costs and lower volumes are hindering its ability to meaningfully expand its operating profit margin and improve credit metrics. As a result, we anticipate the company’s financial leverage will remain elevated with debt/EBITDA at around 6.4x by the end of fiscal 2025, along with a free cash flow deficit for the year, after dividend payments.”
Ratings downgraded include Newell’s Corporate Family Rating to B1 from Ba3, Probability of Default Rating (PDR) to B1-PD from Ba3-PD, senior unsecured note ratings to B2 from B1, and senior unsecured medium term notes program ratings to (P)B2 from (P)B1. Moody’s affirmed the NP (not prime) commercial paper rating. The outlook remains negative, and the speculative grade liquidity (SGL) rating changed to SGL-3 from SGL-4.
Newell’s Outdoor & Recreation segment includes Ex Officio, Stearns, Bubba, and Contigo. The conglomerate also owns Rubbermaid, Sharpie, Graco, Yankee Candle, Paper Mate, FoodSaver, Dymo, Expo, Elmer’s, Oster, Nuk, Spontex, and Campingaz.
Moody’s said, “Newell is actively implementing its strategy to improve revenue trends and the operating profit margin by focusing investments on its top 25 brands and streamlining the operational footprint, processes, and expenses. We anticipate that ongoing and upcoming product innovations, combined with increased marketing efforts and improved competitive pricing, will help stabilize revenue in fiscal 2026. These initiatives, together with continued cost control and measures to offset tariff impacts, are expected to contribute to a modest improvement in EBITDA margin. We project that the company’s debt-to-EBITDA leverage will decline but remain high, at around 6.0x, by the end of fiscal 2026, and free cash flow will continue to be weak. Downside risks also remain high, and the magnitude of profitability gains could be muted by weak consumer confidence, challenges in effectively implementing pricing, and potential high tariff costs.
“The upgrade to SGL-3 reflects that Newell previously addressed its 2026 debt maturities through a refinancing earlier this year. Newell’s adequate liquidity is supported by our expectation for free cash flow to turn positive in 2026 of at least $100 million, no debt maturities over the next 12 months, and roughly $700 million of availability on the $1 billion revolver. Liquidity will weaken if the company does not proactively address its 2027 maturities that consist of the revolver expiring in August 2027 and the $500 million of notes due September 2027.”
Image courtesy Newell Brands/Coleman
