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1. Company Snapshot

1.a. Company Description

Newell Brands Inc.designs, manufactures, sources, and distributes consumer and commercial products worldwide.It operates in five segments: Commercial Solutions, Home Appliances, Home Solutions, Learning and Development, and Outdoor and Recreation.


The Commercial Solutions segment provides commercial cleaning and maintenance solutions; closet and garage organization products; hygiene systems and material handling solutions; and home and security, and smoke and carbon monoxide alarms products under the BRK, First Alert, Mapa, Quickie, Rubbermaid, Rubbermaid Commercial Products, and Spontex brands.The Home Appliances segment offers kitchen appliances under the Crock-Pot, Mr. Coffee, Oster, and Sunbeam brands.The Home Solutions segment provides food and home storage; fresh preserving; vacuum sealing; and gourmet cookware, bakeware, cutlery, and home fragrance products under the Ball, Calphalon, Chesapeake Bay Candle, FoodSaver, Rubbermaid, Sistema, WoodWick, and Yankee Candle brands.


The Learning and Development segment offers writing instruments, including markers and highlighters, pens, and pencils; art products; activity-based adhesive and cutting products; labeling solutions; and baby gear and infant care products under the Aprica, Baby Jogger, Graco, NUK, Tigex, Dymo, Elmer's, EXPO, Graco, Mr. Sketch, NUK, Paper Mate, Parker, Prismacolor, Sharpie, Waterman, and X-Acto brands.The Outdoor and Recreation segment provides outdoor and outdoor-related products under the Campingaz, Coleman, Contigo, ExOfficio, and Marmot brands.It serves warehouse clubs, department and drug/grocery stores, mass merchants, home centers, office superstores and supply stores, contract stationers, and distributors, e-commerce, sporting goods, specialty, and travel retailers.


The company was formerly known as Newell Rubbermaid Inc.and changed its name to Newell Brands Inc.in April 2016.


Newell Brands Inc.was founded in 1903 and is based in Atlanta, Georgia.

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1.b. Last Insights on NWL

Newell Brands' recent performance was negatively impacted by weak sales, macroeconomic headwinds, and a significant earnings miss. The company's Q3 results were disappointing, with revenue down 8% and a notable decline in profitability. Tariffs and weak consumer demand have driven a substantial decline. Despite efforts to cut costs, boost margins, and fuel innovation through its Project Phoenix, the company's turnaround progress appears challenged. A downgrade to "sell" reflects concerns over these headwinds.

1.c. Company Highlights

2. Newell Brands' Q3 Miss: Tariffs and Macro Headwinds Weigh on Results

Newell Brands reported a 7.2% decline in net sales and a 7.4% decline in core sales for the third quarter, with normalized gross margin coming in at 34.5%, down 90 basis points year-over-year. Excluding one-time incremental 125% China tariff costs, Q3 normalized gross margin would have expanded by 40 basis points year-over-year. The company's EPS came in at $0.17, slightly below estimates of $0.18.

Publication Date: Nov -10

📋 Highlights
  • Tariff Impact Escalation: Incremental cash tariff costs surged to $180M in 2024, up from $155M in prior estimates.
  • Sales Decline: Q3 core and net sales dropped 7%, driven by macro headwinds and inventory reductions.
  • Distribution Turnaround: Net distribution gains expected to offset losses starting Q4 2024, extending through 2026.
  • Baby Category Resilience: Secured market share growth despite 3 pricing hikes to counter tariffs and inflation.
  • 2026 Growth Drivers: 20 Tier 1/2 innovations planned, CapEx reductions, and CapEx below $155M in 2026.

Tariffs and Pricing Actions Impact Margins

The company's gross margin was impacted by $180 million in incremental cash tariff costs, up from the previous estimate of $155 million. To offset these costs, Newell employed a multifaceted plan, including pricing actions, productivity efforts, and overhead cost savings. However, the plan was not sufficient to offset the macro headwinds, and the company's normalized operating margin came in at 8.9%, down 60 basis points year-over-year.

Category Performance and Outlook

In the Baby category, Newell proactively took pricing actions to offset inflation and tariffs, and continued to gain market share. In Home & Commercial, the company has been proactively pricing throughout the year to offset tariffs and protect margins. However, several competitors did not immediately follow, leading Newell to increase promotional activity to restore price competitiveness. For the fourth quarter, the company expects net sales to decline 4% to 1% and core sales to decline 5% to 3%.

Valuation and Growth Prospects

Newell Brands' current valuation metrics indicate a P/E Ratio of -55.36, a P/B Ratio of 0.49, and an EV/EBITDA of 14.25. Analysts estimate revenue growth of 0.6% for next year. With a dividend yield of 8.83%, the stock may be attractive to income investors. However, the company's high net debt to EBITDA ratio of 11.25 and negative free cash flow yield of -1.51% raise concerns about its financial health.

Management's Confidence and Future Plans

Despite the current challenges, Newell Brands' management is confident about the company's future prospects, citing a strong innovation pipeline and plans to launch over 20 gross margin accretive, differentiated, and consumer-relevant Tier 1 or Tier 2 propositions next year. As Christopher Peterson noted, "We're confident that Newell Brands' best days are ahead." The company's plans to broaden its distribution and bring bigger, better-supported product and commercial innovations to market are expected to drive growth in the coming years.

3. NewsRoom

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Newell Brands Inc. (NWL) Presents at Morgan Stanley Global Consumer & Retail Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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NWL to Cut More Than 900 Jobs & Shut Stores, Unveils Productivity Plan

Dec -02

Source: zacks.com

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NUK® Expands Perfect Match™ Line to Help Make Feeding & Soothing Natural at Every Stage

Dec -02

Source: prnewswire.com

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Newell Brands to close Yankee Candle stores, cut jobs

Dec -01

Source: foxbusiness.com

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Sharpie maker Newell Brands to ax 900 jobs, close Yankee Candle stores

Dec -01

Source: nypost.com

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Newell Brands to Cut 10% of Employees in Cost-Savings Push

Dec -01

Source: wsj.com

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Newell Brands Announces Global Productivity Plan to Strengthen Competitiveness and Deliver Greater Value for Consumers

Dec -01

Source: businesswire.com

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Wealth Firm Dumps $8.5 Million in Newell Brands as Stock Drops 63% in One Year

Nov -19

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.21%)

6. Segments

Home and Commercial Solutions

Expected Growth: 2%

Newell Brands' Home and Commercial Solutions segment growth is driven by increasing demand for food storage and cooking products, expansion in e-commerce channels, and strategic acquisitions. Additionally, the segment benefits from a strong brand portfolio, including Rubbermaid, Graco, and FoodSaver, which enables market share gains and pricing power.

Learning and Development

Expected Growth: 3%

Newell Brands Inc.'s 3% growth in Learning and Development is driven by increasing demand for online educational resources, strategic partnerships with educational institutions, and investments in digital platforms. Additionally, the company's focus on upskilling and reskilling programs, as well as its expansion into emerging markets, contribute to this growth.

Outdoor and Recreation

Expected Growth: 1%

Newell Brands' Outdoor and Recreation segment growth is driven by increasing consumer participation in outdoor activities, rising demand for camping and hiking gear, and strategic acquisitions. Additionally, the segment benefits from innovative product launches, expanding e-commerce presence, and a growing popularity of outdoor recreation among millennials and Gen Z consumers.

7. Detailed Products

Sharpie Markers

Permanent markers used for writing, drawing, and coloring

Papermate Pens

Ballpoint pens for everyday writing and drawing

Expo Markers

Dry-erase markers for whiteboards and glass surfaces

Uniball Pens

High-quality pens for precise writing and drawing

Crock-Pot Slow Cookers

Electric slow cookers for cooking a variety of meals

FoodSaver Vacuum Sealers

Vacuum sealers for food storage and preservation

Rubbermaid Storage Containers

Plastic storage containers for organization and storage

Graco Baby Products

Strollers, car seats, and other baby gear

Calphalon Cookware

High-quality cookware for cooking and baking

WoodWick Candles

Scented candles for home decor and ambiance

8. Newell Brands Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Newell Brands Inc. operates in a market with moderate threat of substitutes. While there are some alternatives available, they are not significantly cheaper or better, limiting the threat.

Bargaining Power Of Customers

Newell Brands Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are not highly customized, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Newell Brands Inc. relies on a large number of suppliers, which reduces their bargaining power. However, some suppliers may have more negotiating power due to their size or specialized products.

Threat Of New Entrants

Newell Brands Inc. operates in a market with high barriers to entry, including significant capital requirements and established distribution networks, making it difficult for new entrants to compete.

Intensity Of Rivalry

Newell Brands Inc. operates in a highly competitive market with many established players, leading to intense rivalry and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.18%
Debt Cost 7.40%
Equity Weight 38.82%
Equity Cost 8.68%
WACC 7.90%
Leverage 157.58%

11. Quality Control: Newell Brands Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Inter Parfums

A-Score: 5.9/10

Value: 4.9

Growth: 8.1

Quality: 8.1

Yield: 5.0

Momentum: 2.5

Volatility: 7.0

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Clorox

A-Score: 5.3/10

Value: 4.0

Growth: 3.9

Quality: 6.5

Yield: 7.0

Momentum: 1.0

Volatility: 9.7

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Spectrum Brands

A-Score: 4.8/10

Value: 6.4

Growth: 5.2

Quality: 4.7

Yield: 5.0

Momentum: 0.5

Volatility: 7.0

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e.l.f. Beauty

A-Score: 4.4/10

Value: 0.8

Growth: 9.6

Quality: 7.1

Yield: 0.0

Momentum: 7.0

Volatility: 2.0

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Newell Brands

A-Score: 3.9/10

Value: 7.8

Growth: 1.4

Quality: 1.9

Yield: 9.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Helen of Troy

A-Score: 3.0/10

Value: 9.5

Growth: 3.0

Quality: 3.1

Yield: 0.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.73$

Current Price

3.73$

Potential

-0.00%

Expected Cash-Flows