By Eric Smith

<span style="color: #a1a1a1;">As states enacted stay-at-home orders across the U.S. over the past two months to stop the spread of the coronavirus, they also closed their ski resorts, parks and hiking trails, while outdoor and sporting goods retailers shuttered their doors.

Without places for consumers to recreate or easily buy gear and apparel, outdoor brands have gotten crushed in the process. And Newell Brands is the latest to publicly announce just how bad things have gotten in this space.

The Atlanta, GA-based company’s home and outdoor living segment, which includes Coleman and Marmot, posted a $1.1 billion operating loss after impairment charges. Net sales in the segment were $547 million in the first quarter compared with $627 million in the prior-year period, reflecting a sales decline of 11.3 percent for the collection of home and outdoor living brands.

The segment also includes Chesapeake Bay Candle, Contigo, ExOfficio, First Alert, WoodWick and Yankee Candle.

In a statement, Newell Brands said the core sales decline includes the impact of the temporary closure of all North American retail stores in mid-March as a result of the COVID-19 pandemic, in addition to supply chain disruptions across the company’s entire portfolio.

And on the earnings call with analysts, Newell CEO Ravi Saligram said outdoor is struggling for a variety of reasons.

“You’ve got a technical apparent apparel business with Marmot. You’ve got Coleman, and then you’ve got Contigo … ,” he said. “What’s happening is the technical apparel business has gotten hit, not just for us, but across the board. Apparel business has been hit hard with I think especially with stay-at-home [measures]. On Coleman, the challenge there is because of stay-at-home, people are not camping, the parks are closed. So that creates a natural issue there. But we’re making good progress.”

That progress includes the appointment of Jim Pisani as the CEO of the outdoor segment. He began that job today. VF Corp. in January announced that Pisani left his post as global brand president for Timberland, which he had held since August 2016. Newell also has a new head of sales at the brand.

As for Contigo, Saligram said that the brand is facing severe headwinds from the closure of key retail partners.

“Since people are at home, that has taken a bit of hit,” he said. “A lot of the retailers that serve it—REI, Dick’s Sporting Goods, etc.—are all closed.”

However, he added, there are opportunities for these brands to improve their direct-to-consumer capabilities through e-commerce channel offerings.

“I do think, longer-term, there is an opportunity for us to do better on the dot-coms of those businesses,” he said. “Historically, we are sort of focused on the big retailer dot-coms and Amazon. We’re going to drive penetration in a lot of these specialty [stores].”

As one analyst on the call noted, Newell’s outdoor brands came out of the Great Recession of 2008/09 fairly well. So can Marmot, Coleman and Contigo replicate that past recovery playbook?

“In a recessionary time, as we come out of it, I think we should get better on that business,” Saligram said.

Companywide, Newell Brands’ net sales were $1.9 billion, a 7.6 percent decline compared to the prior-year period, reflecting a 5.1 percent decline in core sales and the unfavorable impact of foreign exchange. Revenue missed Wall Street’s projections by $10 million.

Its operating loss was $1.4 billion compared with an operating income of $12 million in the prior-year period. Impairment charges of $1.5 billion and $63 million were incurred in the current and prior year periods, respectively, primarily related to goodwill and intangible assets.

Beyond the $1 billion impairment charge in the home and outdoor living segment, an impairment charge of $299 million was taken for the Appliances & Cookware segment (Calphalon, Crock-Pot, Mr. Coffee, Oster, and Sunbeam).

The company reported a net loss of $1.3 billion, or $3.02 diluted loss per share, compared with a net loss of $151 million, or 36 cents diluted loss per share, in the prior-year period. EPS missed analysts’ expectations by $2.93.

Newell Brands withdrew guidance for the second quarter, but it expects more of the same in terms of stunted sales growth due to states only slowly reopening their economies.

“Although we delivered a performance in line with or ahead of expectations in Q1, we expect Q2 to be a very challenging quarter,” Saligram said.” We are encouraged, however, by the pockets of strength we are seeing in the food and commercial businesses as well as recent point of sale trends in the appliances and cookware business in the U.S. We remain confident in our liquidity position and our ability to successfully navigate the enterprise during these difficult times.”

Photo courtesy Newell Brands