Newell Brands President and CEO Chris Peterson said a company transformation strategy is gaining traction after Newell beat a fourth-quarter earnings estimate while falling just short of a revenue forecast.
Newell topped a Zacks Investment Research earnings per diluted share estimate of 14 cents but came up short of a revenue estimate of $1.97 billion. Net sales were $1.95 billion, down 6.1% compared with the prior-year quarter with core sales down 3%. Sales results reflected the core sales decline and the impact of unfavorable foreign exchange and business exits. Pricing in international markets to offset inflation and currency movements affected Newell’s core sales performance, the company noted. Operating income was $9 million versus a $10 million loss in the year-earlier period while adjusted operating income was $139 million versus $133 million.
The Home & Commercial Solutions segment posted net sales of $1.2 billion versus $1.3 billion in the year-before quarter, reflecting a core sales decline of 4.6%, as well as the impact of unfavorable foreign exchange and certain business exits. Core sales gained in the commercial business, primarily because of international pricing to offset inflation and currency movements, while they declined in the kitchen and home fragrance businesses. Reported operating income was $28 million compared with $31 million in and adjusted operating income was $137 million flat from the year-before period.
The Outdoor & Recreation segment posted net sales of $152 million versus $165 million in the year-before quarter, reflecting a core sales decline of 3.8%, as well as the impact of unfavorable foreign exchange. Reported operating loss was $34 million compared with $45 million and adjusted operating loss was $28 million versus $25 million in the year-before period.
The Learning & Development segment posted net sales of $628 million versus $635 million in the year-before quarter, including core sales growth of 0.4%, which more than offset the impact of unfavorable foreign exchange. Core sales gained in the writing business and decreased in the baby business. Reported operating income was $99 million compared with $80 million and adjusted operating income was $101 million versus $88 million in the year-before period.
Net loss for the full year was $216 million, or 52 cents per diluted share, versus a net loss of $388 million, or 94 cents per diluted share, in the year past. Adjusted net income was $286 million, or 68 cents per diluted share, versus $277 million, or 67 cents per diluted share, in the year previous.
Net sales were $7.58 billion, down 6.8% compared to the year past, reflecting a core sales decrease of 3.4%, as well as the impact of certain category exits and unfavorable foreign exchange. Operating income was $67 million versus an operating loss of $85 million in the year earlier, while adjusted operating income was $618 million versus $499 million.
In announcing the financial results, Peterson said, “Newell Brands delivered strong results in 2024 driven by disciplined implementation of our new corporate strategy, operating model and culture transformation. We drove year-over-year sales performance improvement as we significantly strengthened the company’s front-end selling and marketing capabilities. The Learning and Development segment returned to positive annual sales growth despite category declines. We drove strong gross and operating margin improvement, while purposely increasing our level of A&P investment, and we meaningfully de-levered the balance sheet through both debt reduction and EBITDA growth. While much work remains and the macroeconomic backdrop is still uncertain, we are laser-focused on returning the company to sustainable topline growth, continuing to drive operating margin improvement ahead of our evergreen target and strengthening the balance sheet.”
Mark Erceg, Newell Brands CFO, added, “During the fourth quarter, we successfully refinanced $1.25 billion of debt at attractive rates as part of an offering which was six times oversubscribed. We believe the strong support our offering received reflects the considerable work done since the adoption of our new corporate strategy six quarters ago, which has improved Newell’s top-line performance, strengthened our balance sheet and, most importantly, fundamentally transformed our structural economics.
“Fourth quarter reported gross margin increased by 430 basis points to 34.2% compared to the same quarter last year and was 790 basis points higher than the fourth quarter of 2022,” Erceg continued. “The fact that we have driven such rapid and pronounced gross margin expansion during a period of top line compression and a sustained and sizable draw down in inventory levels, both of which drove our plant networks capacity utilization levels down, is particularly notable. Looking forward, Newell Brands’ core sales growth is expected to positively inflect during the back half of 2025 and, when that occurs, we believe the work done to create operational scale and efficiency across our plant and distribution system will be even more apparent.”
