As Newell Brands advances a turnaround plan initiated last year, the company beat Wall Street’s first-quarter estimates on loss and revenue.
Net loss in the quarter was $9 million, or two cents per share, compared with $102 million, or 25 cents per share, in the prior-year period. Adjusted for one-time events net loss was $2, or zero on a per share basis, versus $26 million, or six cents on a per share basis, in the year-earlier period, the company reported.
An analyst consensus estimate published by Yahoo Finance called for an adjusted loss per share of seven cents and revenues of $1.64 billion.
Net sales were $1.65 billion in the quarter, down 8.4% year over year. Core sales declined 4.7% compared with the year-previous period, according to Newell. The core sales decline, unfavorable foreign exchange rates and business exits impacted overall sales, while pricing changes in international markets designed to offset inflation and currency movements contributed to the company’s core sales performance, Newell maintained.
Operating income was $16 million compared with an operating loss of $36 million in the year-past quarter, while adjusted operating income was $76 million versus adjusted operating income of $43 million.
In the first quarter, the Home and Commercial Solutions segment generated net sales of $893 million versus $971 million in the year-before period, reflecting a core sales decline of 4.3% and the impact of unfavorable foreign exchange and business exits, Newell stated. Declines in the kitchen and home fragrance businesses more than offset core sales growth in the commercial business primarily driven by pricing in international markets.
The Outdoor and Recreation segment generated net sales of $201 million versus $270 million in the year-before quarter, reflecting a core sales decline of 20.3%, the impact of unfavorable foreign exchange and business exits.
Then, the Learning and Development segment generated net sales of $559 million versus $564 million in the year-before period, as the impact of unfavorable foreign exchange rates more than offset core sales growth of 1.8%.
In announcing the financial results, Chris Peterson, Newell Brands president and CEO, said, “The decisive actions we’ve taken as part of our new strategy have led to excellent progress on the major operational and financial priorities for this year. During the first quarter, core sales performance improved sequentially, normalized operating margin nearly doubled versus last year, and we meaningfully increased operating cash flow. We remain confident in our ability to strengthen the company’s performance and create value for our stakeholders over time as we continue to move with speed and agility to operationalize our strategy, which focuses on disproportionately investing in innovation, brand building and go-to-market excellence in our largest and most profitable brands and markets.”
Mark Erceg, Newell CFO, added, “The interventions made to operationalize Newell’s new corporate strategy and improve the structural economics of the business are taking hold as evidenced by the fact this was the third consecutive quarter of strong year-over-year gross margin expansion, enabled by world-class productivity, favorable mix and pricing. In addition, working capital reduction, together with operating income growth, resulted in positive operating cash flow during the first quarter which, historically, has been very hard to achieve due to the seasonality of the business. With a stronger than anticipated start to the year, we remain confident in our full-year outlook.”
