On July 26, 2024, Newell Brands Inc (NWL, Financial) released its 8-K filing for the second quarter of 2024. Newell Brands Inc is an American global consumer goods company operating through three segments: Home and Commercial Solutions, Learning and Development, and Outdoor and Recreation. The Learning and Development segment, which includes baby gear, writing instruments, and art products, is a significant revenue generator for the firm.
Performance Overview
Newell Brands Inc reported net sales of $2.0 billion for Q2 2024, a 7.8% decline compared to the prior year period. Core sales also declined by 4.2%. Despite these challenges, the company achieved a reported gross margin of 34.4%, up from 28.5% in the previous year. Normalized gross margin increased to 34.8% from 29.9%.
Reported operating income was $163 million, with an operating margin of 8.0%, compared to $120 million and 5.4% in the prior year period. Normalized operating income was $219 million, or 10.8% of sales, up from $201 million, or 9.1% of sales, in the prior year period.
Financial Achievements
Newell Brands Inc's reported net income for Q2 2024 was $45 million, a significant increase from $18 million in the prior year period. Normalized net income was $151 million, up from $101 million. Reported diluted earnings per share (EPS) were $0.11, compared to $0.04 in the prior year period. Normalized diluted EPS was $0.36, exceeding the analyst estimate of $0.18.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $2.0 billion | $2.17 billion |
| Gross Margin | 34.4% | 28.5% |
| Operating Margin | 8.0% | 5.4% |
| Net Income | $45 million | $18 million |
| Diluted EPS | $0.11 | $0.04 |
Segment Performance
The Home & Commercial Solutions segment reported net sales of $962 million, a decline from $1.1 billion in the prior year period. The Learning & Development segment generated net sales of $813 million, in line with the prior year period, while the Outdoor & Recreation segment saw net sales of $258 million, down from $333 million.
Balance Sheet and Cash Flow
Year-to-date operating cash flow was $64 million, compared to $277 million in the prior year period. Inventories decreased by approximately $300 million. Newell Brands had $5.0 billion in debt and $382 million in cash and cash equivalents at the end of Q2 2024, compared to $5.4 billion and $317 million, respectively, at the end of Q2 2023.
Commentary and Outlook
"We are making significant progress in driving Newell's turnaround. During the second quarter, we continued to deliver on our operational and financial priorities for the year, as results came in at the high-end or ahead of our plan across key metrics," said Chris Peterson, Newell Brands President and Chief Executive Officer.
"The rapid and dramatic improvement we have delivered in gross margin ties directly back to the development and implementation of our new strategy and has allowed us to invest more in advertising and critical front-end commercial capabilities," added Mark Erceg, Newell Brands Chief Financial Officer.
Newell Brands Inc raised its full-year 2024 outlook, expecting net sales to decline by 7% to 6%, core sales to decline by 4% to 3%, and normalized EPS to range between $0.60 and $0.65. The company also increased its operating cash flow outlook to $450 million to $550 million.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Newell Brands Inc for further details.
