Yahoo Finance Newell (NWL) Earnings Surpass Estimates in Q1 Sales Dip Y/Y
Newell Brands Inc. NWL posted first-quarter 2024 results, wherein both sales and earnings beat the Zacks Consensus Estimate. The company’s normalized loss per share was $0.00 against earnings per share of 6 cents in the year-ago quarter. The bottom-line figure was narrower than the consensus mark of a loss of 7 cents per share.
Net sales declined 8.4% year over year to $1.7 billion on lower core sales as well as the impacts of business exits and adverse foreign exchange. Nonetheless, the metric exceeded the consensus estimate of $1.6 billion. This was somewhat offset by positive currency impacts. Also, core sales fell 4.7% year over year. Pricing across the international markets to offset inflation and currency was a significant contributor to core sales.
The normalized gross margin expanded 410 bps year over year to 31.2%. The normalized operating margin increased 220 bps year over year to 4.6% in the reported quarter.
Newell Brands Inc. Price, Consensus and EPS Surprise
Newell Brands Inc. price-consensus-eps-surprise-chart | Newell Brands Inc. Quote
In the past three months, shares of this current Zacks Rank #3 (Hold) company have risen 6.9% compared with the industry’s 5% growth.
Segmental Details
Net sales in the Home & Commercial Solutions segment were $893 million in the first quarter, down 8% from the year-ago period. The metric missed the Zacks Consensus Estimate of $907 million. Core sales slipped 4.3% year over year. Higher core sales in Commercial, mainly driven by pricing in the international markets, were more than offset by declines in the Kitchen and Home Fragrance businesses. Also, the impacts of a few business exits acted as deterrents.
The Learning and Development segment recorded net sales of $559 million, which dipped 0.9% from the year-ago quarter. The metric beat the consensus mark of $480.6 million. We note that core sales grew 1.8%, which was more than offset by adverse impacts of foreign exchange. Core sales grew in the Writing and Baby businesses.
The Outdoor and Recreation segment’s net sales of $201 million declined 25.6% from the year-ago quarter. Also, the metric lagged the consensus mark of $256.5 million. Core sales fell 20.3% in the quarter.
Other Financial Details
Newell Brands ended the quarter with cash and cash equivalents of $372 million, long-term debt of $4.6 billion, debt outstanding of $5 billion and shareholders’ equity of $3.1 billion. NWL also provided $32 million in cash for operating activities during first-quarter 2024.
Outlook
Management issued guidance for the second quarter and reaffirmed the view for 2024. The company anticipates 2024 sales to decrease 5-8% year over year with a core sales decline of 3-6%. The normalized operating margin is expected to be 7.8-8.2% for 2024. Normalized earnings per share (EPS) are forecast to be 52-62 cents, down from 79 cents reported last year.
For 2024, the company envisions an operating cash flow of $400-$500 million. This includes $150-$200 million in cash related to restructuring efforts.
For second-quarter 2024, net sales are envisioned to dip 7-9%, with a core sales decline of 4-6%. For the quarter, the company expects a normalized operating margin of 9.1-9.6% and normalized EPS of 18-21 cents.
Key Picks
We have highlighted three better-ranked stocks from the Consumer Staple sector, namely Coca-Cola FEMSA KOF, Vita Coco Company COCO and Diageo DEO.
Coca-Cola FEMSA currently has a Zacks Rank #2 (Buy). KOF shares have rallied 5.7% in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and EPS suggests growth of 10.7% and 25.1%, respectively, from the year-ago period’s reported figures. KOF has a trailing four-quarter negative earnings surprise of 2.1%, on average.
Vita Coco currently carries a Zacks Rank of 2. COCO shares have risen 10.6% in the past three months. The company has a trailing four-quarter earnings surprise of 31.3%, on average.
The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings suggests growth of 1.8% and 24.3%, respectively, from the year-ago period’s reported figure.
Diageo currently carries a Zacks Rank of 2. DEO shares have gained 3.4% in the past three months.
The Zacks Consensus Estimate for Diageo’s current financial-year sales suggests growth of 11% from the year-ago period's reported figures. The consensus mark for the company’s EPS indicates a decline of 8.2% from the year-ago quarter’s actual.
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Newell Brands Inc. (NWL) : Free Stock Analysis Report
Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
Coca Cola Femsa S.A.B. de C.V. (KOF) : Free Stock Analysis Report
