Why Newell Brands Shares Are Gaining Today

Newell Brands Inc NWL reported a second-quarter FY23 sales decline of 13.2% year-on-year to $2.20 billion, beating the analyst consensus of $2.15 billion.

The revenue reflects a core sales decrease of 11.9% and the impact of unfavorable foreign exchange.

Adjusted EPS of $0.24 beat the analyst consensus of $0.13.

Gross margin for the quarter contracted 450 basis points to 28.5%, and the gross profit decreased 24.8% to $629 million.

The operating margin for the quarter compressed 750 basis points to 5.4%, and the operating income plunged to $120 million.

The company held $317 million in cash and equivalents as of June 30, 2023.

"Since my appointment two months ago we have created and deployed a new corporate strategy based on a comprehensive company wide capability assessment," said President and CEO Chris Peterson.

"Restoring strong operating cash flow and improving the underlying structural economics of our business remains our primary financial focus this year," said CFO Mark Erceg.

Outlook: NWL lowered its FY23 adjusted EPS outlook to $0.80 - $0.90 (from $0.95 - $1.08) versus an estimate of $0.94.

It also cut the FY23 sales outlook to $8.20 billion - $8.34 billion (from $8.4 billion - $8.6 billion) against the consensus of $8.45 billion.

Newell expects Q1 normalized EPS of $0.20 - $0.24 against an estimate of $0.45. Sales of $2.11 billion - $2.16 billion versus the Street view of $2.21 billion.

Price Action: NWL shares traded higher by 10% at $11.28 on the last check Friday.