Newell Brands, the parent company of Marmot, Ex Officio, Stearns, Bubba, Coleman, and Contigo, among others, reported that its Outdoor & Recreation segment had another revenue decline in the fourth quarter, although it was significantly less than in recent quarters.

Sales fell 7.9 percent to $152 million in the fourth quarter, compared with $165 million in the prior year Q4 period. The company said the decline reflected a core sales decline of 3.8 percent, in addition to the impact of unfavorable foreign exchange and certain business exits.

Core sales in the Outdoor & Recreation segment had declined 16.8 percent in the third quarter, 18.2 percent in the second quarter, 20.3 percent in the first quarter, and 21.8 percent in the year-ago fourth quarter.

The segment’s reported operating loss in the latest fourth quarter was $34 million, or negative 22.4 percent of sales, compared with an operating loss of $45 million, or negative 27.3 percent of sales, in the prior year period. Normalized operating loss was $28 million, or negative 18.4 percent of sales, compared with a reported operating loss of $25 million, or negative 15.2 percent of sales, in the prior year period.

In the year, sales for the Outdoor & Recreation segment were $794 million, down 20.5 percent from $999 million a year ago. Reported operating income was a loss of $86 million against a loss of $83 million a year ago. Normalized operating income was a loss of $53 million versus a loss of $30 million the prior year.

Consolidated Fourth Quarter Results
Newell Brands reported net sales in the quarter were $1.9 billion, a decline of 6.1 percent compared with the prior year period, reflecting a core sales decline of 3.0 percent and the impact of unfavorable foreign exchange and business exits. Pricing in international markets to offset inflation and currency movements was a meaningful contributor to the company’s core sales performance.

Newell’s other brands include Rubbermaid, Sharpie, Graco, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, Expo, Elmer’s, Oster, Nuk, Spontex, and Campingaz.

Reported gross margin was 34.2 percent compared with 29.9 percent in the prior year period as the positive impact from productivity savings and pricing more than offset the headwinds from lower sales volume, inflation and foreign exchange. Normalized gross margin was 34.6 percent compared with 31.1 percent in the prior year period, which represents the sixth consecutive quarter of year-over-year improvement.

Reported operating income was $9 million compared with an operating loss of $10 million in the prior year period. Non-cash impairment charges of $87 million and $68 million were incurred in the current and prior year periods, respectively, primarily related to intangible assets. Reported operating margin was 0.5 percent compared with negative 0.5 percent in the prior year period, largely reflecting benefits from higher gross margin and higher savings from restructuring actions that were partially offset by higher advertising and promotions costs as well as incentive compensation costs. Normalized operating income was $139 million, or 7.1 percent of sales, compared with $133 million, or 6.4 percent of sales, in the prior year period.

Net interest expense was $72 million compared with $70 million in the prior year period.

Reported tax benefit was $25 million compared with $78 million in the prior year period. The normalized tax benefit was $4 million compared with $17 million in the prior year period.

Reported net loss was $54 million compared with $86 million in the prior year period. Normalized net income was $69 million compared with $73 million in the prior year period. Normalized EBITDA was $216 million compared with $219 million in the prior year period.

Reported diluted loss per share was $0.13 compared with $0.21 in the prior year period. Normalized diluted EPS was $0.16 compared with $0.18 in the prior year period.

Other Segment Results
The Learning & Development segment generated net sales of $628 million compared with $635 million in the prior year period, reflecting core sales growth of 0.4 percent, which more than offset the impact of unfavorable foreign exchange.

Core sales increased in the Writing business and decreased in the Baby business. Reported operating income was $99 million, or 15.8 percent of sales, compared with $80 million, or 12.6 percent of sales, in the prior period. Normalized operating income was $101 million, or 16.1 percent of sales, compared with $88 million, or 13.9 percent of sales, in the prior year period.

The Home & Commercial Solutions segment generated net sales of $1.2 billion compared with $1.3 billion in the prior year, reflecting a core sales decline of 4.6 percent and the impact of unfavorable foreign exchange and certain business exits. Core sales increased in the Commercial business, primarily due to international pricing to offset inflation and currency movements, while core sales declined in the Kitchen and Home Fragrance businesses. Reported operating income was $28 million, or 2.4 percent of sales, compared with $31 million, or 2.4 percent of sales, in the prior year period. Normalized operating income was $137 million, or 11.7 percent of sales, compared with $137 million, or 10.7 percent of sales, in the prior year period.

Full Year 2024 Operating Results
Net sales for the full year ended December 31, 2024 were $7.6 billion, a decline of 6.8 percent compared to the prior year, reflecting a core sales decrease of 3.4 percent, the impact of certain category exits and unfavorable foreign exchange.

Reported gross margin was 33.6 percent compared with 28.9 percent in the prior year, as the positive impact from productivity savings and pricing more than offset the headwinds from lower sales volume, inflation and foreign exchange. Normalized gross margin was 34.1 percent, compared with 29.5 percent in the prior year.

Reported operating income was $67 million, or 0.9 percent of sales, compared with operating loss of $85 million, or negative 1.0 percent of sales, in the prior year. Non-cash impairment charges of $353 million and $342 million were incurred in the current and prior year, respectively. Normalized operating income was $618 million, or 8.2 percent of sales, compared with $499 million, or 6.1 percent of sales, in the prior year.

Net interest expense was $295 million compared with $283 million in the prior year.

Reported tax benefit was $44 million compared with $155 million in the prior year. The normalized tax provision was $21 million compared with a normalized tax benefit of $86 million in the prior year.

Reported net loss was $216 million compared with $388 million in the prior year. Normalized net income was $286 million compared with $277 million in the prior year. Normalized EBITDA was $900 million compared with $782 million in the prior year.

Reported diluted loss per share was $0.52 compared with $0.94 in the prior year. Normalized diluted EPS was $0.68 compared with $0.67 in the prior year.

Balance Sheet and Cash Flow
Full-year operating cash flow was $496 million compared with $930 million in the prior year period. The prior year operating cash flow included a significant contribution from working capital primarily due to inventory reduction.

During the fourth quarter of 2024, the company refinanced $1.25 billion of debt. At the end of 2024, Newell Brands had debt outstanding of $4.6 billion and cash and cash equivalents of $198 million, respectively, compared with $4.9 billion and $332 million, respectively, at the end of the prior year.

Organizational Realignment Plan
In January 2024, the company announced an organizational realignment, which is expected to strengthen its front-end commercial capabilities, including consumer understanding and brand communication, in support of the “Where to Play / How to Win” choices the company outlined in June 2023 (the Realignment Plan).

As part of the organizational realignment, the company made organizational design changes, which included standing up a cross-functional brand management organization, realigning business unit finance to support its new global brand management model, further simplifying and standardizing regional go-to-market organizations, and

centralizing its domestic retail sales teams, digital technology team, business-aligned accounting personnel, Manufacturing Quality team, and Human Resource functions into the appropriate center-led teams “to drive standardization, efficiency and scale with a One Newell approach.”

Under the company’s Realignment Plan in 2024, it realized an annualized pretax savings of $75 million, net of reinvestment, and incurred restructuring and related charges of $52 million.

Outlook
The company initiated its preliminary outlook for first quarter and full year 2025 as follows:

The company initiated its outlook for full year 2025 operating cash flow of $450 million to $500 million.

Image courtesy Newell Brands/Marmot