Newell's stock rallies on revenue beat as it boosts margins and carries out restructuring plan

By Steve Gelsi

Household-products maker's stock is up nearly 8% as it reports progress on turnaround efforts

Newell Brands Inc.'s stock is in rallying mode on Friday after the household-products maker boosted its margins, narrowed its first-quarter loss and posted stronger-than-expected revenue.

The company also said its plan to cut costs and boost margins remains on track.

Newell Brands (NWL) jumped 13% to $7.86 a share, its highest level in about a month.

Newell Brands said it lost $9 million, or 2 cents a share in the first quarter, compared to a loss of $102 million, or 25 cents a share, in the year-ago period.

It broke even on an adjusted basis with a first-quarter figure of zero cents a share, while analysts polled by FactSet had expected a loss of 7 cents a share.

Revenue dropped 8.4% to $1.65 billion, but was ahead of the FactSet consensus estimate of $1.64 billion.

The company, whose brands include Rubbermaid household products, Yankee Candles and Coleman stoves, said its operating margin increased to 1%, reversing a negative 2% operating margin in the year-ago period.

Adjusted operating margin increased to 4.6% from 2.4% in last year's first quarter.

Newell Brands Chief Executive Chris Peterson said the company saw "excellent progress" on its restructuring efforts initially announced in January, with sequential improvement in core sales performance, normalized operating margin and increased operating cash flow.

As part of that plan, the company said it would cut 7% of its workforce. As of Dec. 31, Newell Brands had a total of 24,600 employees.

Looking ahead, Newell Brands said it expects adjusted second-quarter earnings of 18 cents to 21 cents a share, below the analyst estimate of 25 cents a share.

For full-year 2024, Newell is projecting adjusted earnings of 52 cents to 62 cents a share, compared to the analyst estimate of 57 cents a share.

Newell said it plans to "further optimize" its real estate footprint and pursue other cost-reduction initiatives.

It took $22 million of restructuring costs in the first quarter, as it targets $55 million to $70 million in 2024 cost savings.

The company estimated it will take $75 million to $90 million in restructuring charges by the end of the year.

Prior to Friday's moves, Newell Brands stock was down 20% in 2024, compared to a 5.8% increase by the S&P 500 SPX.

-Steve Gelsi

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04-26-24 0958ET

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