Newell Brands Inc. reported it is revising its outlook for its third quarter and full-year 2022 to reflect a more challenging operating and consumer backdrop than initially expected.
The company revised its third-quarter net sales outlook to $2.21billion to $2.32 billion versus the original $2.39 billion-to-$2.50 billion estimate. This reflected an expected year-over-year decline in core sales of 8%-12% compared to the earlier estimate of a decline between 1% and 5%. Newell said it expects full-year sales to come in at $9.37 billion to $9.58 billion compared to its original estimate of $9.76 billion to $9.98 billion.
Newell now expects a third-quarter normalized operation margin between 8.7% and 9.4%, compared to an earlier estimate of 10.7% to 11%; and a full-year normalized operating margin between 10% to 10.5% compared to its original 11.2%-to-11.4% estimate.
The full-year 2022 outlook for net sales, normalized operating margin and normalized EPS includes the contribution from the divested Connected Home & Security business unit during the first quarter. Core sales growth outlook for full-year 2022 excludes the contribution from CH&S. Net sales outlooks for both the third quarter of 2022, as well as for the full year 2022, account for the expected unfavorable foreign exchange movements, using current rates, as well as closures of Yankee Candle retail locations and market and category exits, primarily in the Outdoor & Recreation and Home Appliances segments.
Ravi Saligram, Newell Brands CEO, said, “Although we remain enthusiastic about the back-to-school season and continue to see solid growth in the Commercial business, we have experienced a significantly greater than expected pullback in retailer orders and continued inflationary pressures on the consumer. As a result of these developments and our more cautious posture for the balance of the year, we are adjusting our expectations for the second half of 2022.”
Newell said it accelerating is its “FUEL” (Finding Untapped Efficiencies and Leverage) productivity program, closely managing discretionary and overhead spending, optimizing its advertising and promotion expenses, adjusting its demand forecast and supply plans and taking additional actions to improve working capital.