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Newell Brands Inc. NWL appears well-poised for growth on the back of its robust business strategies. Management has been evaluating opportunities to optimize the category mix and drive growth within each business unit. NWL’s corporate strategy is also encouraging.
Newell’s Strategic Efforts Aid
The company has been executing its corporate strategy, which aims at investing in innovation, brand-building and go-to-market excellence across its profitable brands and markets. It also focuses on achieving standardization and efficiencies within the supply chain and other office-related functions.
Newell is enhancing its front-end commercial capabilities through consumer-driven innovation. In the Baby business, the company introduced the Graco SmartSense Soothing Bassinet and Swing. This product detects and responds to a baby's cries with sound and motion. Its innovation pipeline remains on track. Management expects stronger top-line results in the back half of 2025 compared with the front half, given the timing of its innovation launches and distribution gains.
In addition, the company’s operating model, designed to accelerate the corporate strategy by driving organizational effectiveness and agility alongside developing a high-performing and innovative culture, is encouraging. Newell is making progress in its business development, enhancing its brand distribution.
Newell’s organizational realignment looks to strengthen its front-end commercial capabilities, including consumer understanding and brand communication. Apart from improving accountability, the Realignment Plan will unlock operational efficiencies and cost savings, lower complexity and free up funds for reinvestment.
Newell's priorities focus on improving margins by leveraging cost savings to offset inflation and marketing investments. The company also aims to reduce debt and improve cash flow while funding key restructuring projects to boost sustainable growth. It has secured notable wins in food storage and vacuum ceiling bags. Management expects lower commodity and input cost inflation, favorable foreign exchange, solid productivity results and select pricing efforts to offset the elevated tariff costs.
Bumps in NWL’s Growth Story
Newell has been witnessing a challenging macroeconomic environment and the cumulative impact of inflation. This has led to muted demand for discretionary and durable products. It has also been grappling with sluggishness in its Outdoor & Recreation segment for a while. Additionally, factors like the rising U.S. dollar, changing tax policies and potential tariffs add complexity to the business landscape.
NWL’s sensitivity analysis highlights that if the 125% tariff rate is in effect for the full year and is not mitigated, it might lower its 2025 normalized earnings per share (EPS) by nearly 20 cents. The company anticipates 2025 sales to drop in the range of 2-4% year over year. It now expects core sales to decline 1-3% compared with the earlier anticipation of a 2% decrease to a 1% increase.
For the second quarter, both the net sales and core sales are expected to dip in the range of 3-5%. The company expects a normalized EPS in the band of 21-24 cents, down from 36 cents earned in the year-earlier quarter. It now expects category growth to drop 1-2%, given the soft consumer confidence levels and more muted macroeconomic expectations.