Newell Brands Inc. NWL posted narrower-than-expected loss per share in first-quarter 2025, with sales beating the Zacks Consensus Estimate. Both metrics fell year over year.
The company’s normalized loss per share was one cent, narrower than the Zacks Consensus Estimate of a loss of seven cents per share. The company reported break-even earnings in the year-earlier quarter.
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Net sales dipped 5.3% year over year to $1.6 billion on lower core sales, as well as the impacts of business exits and adverse foreign exchange. The metric beat the consensus estimate of $1.5 billion. Core sales fell 2.1% year over year.
Newell Brands Inc. Price, Consensus and EPS Surprise
Newell Brands Inc. Price, Consensus and EPS Surprise
Newell Brands Inc. price-consensus-eps-surprise-chart | Newell Brands Inc. Quote
The normalized gross margin expanded 150 bps to 32.5%, reflecting the seventh straight quarter of year-over-year increase. However, the normalized operating margin fell 30 bps year over year to 4.5%. Normalized EBITDA was $136 million, down from $152 million seen in the year-ago period. Our model anticipated a decline of 33.6% in adjusted EBITDA for the same quarter.
NWL’s shares have dipped 3.3% in the trading hours, owing to soft first-quarter 2025 results and concerns regarding tariffs. In the past three months, the company’s shares have lost 47.5% against the industry’s 1% growth.
NWL’s Segmental Details
Net sales in the Home & Commercial Solutions segment were $812 million, down 9.1% from the year-ago period. Core sales dipped 5% year over year, due to decreases in the Commercial, Kitchen and Home Fragrance businesses. Also, the impacts of foreign exchange headwinds and a few business exits acted as deterrents. We had expected sales of $813.3 billion for the segment.
The Learning and Development segment recorded net sales of $572 million, up 2.3% from the year-ago quarter. Core sales grew 4.2%, which offset the adverse impacts of foreign exchange. Core sales grew across both the Writing and Baby businesses. We had expected sales of $549.7 million.
The Outdoor and Recreation segment’s net sales of $182 million declined 9.5% from the year-ago quarter. Core sales fell 7.1% and negative foreign exchange hurt the results. However, the metric beat our estimate of $176.5 million.
Other Financial Details of Newell
This Zacks Rank #4 (Sell) company ended the quarter with cash and cash equivalents of $233 million, long-term debt of $4.5 billion, outstanding debt of $4.9 billion and shareholders’ equity of $2.7 billion.
NWL used $213 million in cash from operating activities during first-quarter 2025.
NWL’s Outlook
Management has revised the core sales and operating cash flow outlook for 2025, while issuing the view for the second quarter. The outlook reflects the initial two rounds of IEEPA tariffs on China valuing 20%, Section 232 global steel and aluminum tariffs and all the other reciprocal tariffs of 10% presently in effect for countries outside of China. However, the most recent reciprocal China tariff of 125% is not included in the current outlook.
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. Newell has already identified mitigating efforts that it believes would be enough to lower this amount by half.
The company still anticipates 2025 sales to drop in the band 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 1% increase. The normalized operating margin is likely to be in the band of 9-9.5%. Normalized EPS is predicted to be in the band of 70-76 cents, up from 68 cents reported last year. The company envisions operating cash flow to be in the range of $400-$500 million compared with the prior expectation of $450-$500 million, owing to the increased tariff cost on inventory.
For the second quarter, net sales are envisioned to dip in the range of 3-5%, with core sales anticipated to drop in the band of 3-5%. The company expects a normalized operating margin in the range of 10.4-10.8% and normalized EPS in the band of 21-24 cents. It reported EPS of 36 cents in the year-earlier quarter.
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