Newell Brands stock soars over 9% as FY24 guidance lifted, Q2 earnings beat estimates

ATLANTA – (NASDAQ: NWL), a leading global consumer goods company, reported a stronger-than-expected second quarter, surpassing analyst earnings estimates and lifting its full-year guidance. Shares were trading up 9.9% in Friday’s premarket session.

The company posted adjusted earnings per share (EPS) of $0.36, which was significantly above the consensus estimate of $0.22. However, revenue for the quarter was slightly below expectations at $2 billion, compared to the estimated $2.04 billion.

The company’s updated guidance indicates a more optimistic outlook, with third-quarter EPS projected to be between $0.14 and $0.17, despite analyst expectations of $0.20. For the full year, Newell now anticipates adjusted EPS to range from $0.60 to $0.65, aligning with the higher end of analyst predictions.

Newell’s leadership expressed confidence in the company’s strategic direction, citing significant progress in their turnaround efforts. Chris Peterson, President and CEO, highlighted the improvement in gross and operating margins compared to the previous year, as well as the company’s ability to deliver results at the high end or ahead of their plan across key metrics. Mark Erceg, CFO, pointed out the consecutive quarters of year-over-year improvements in cash conversion cycle and reduction in leverage ratio.

Despite a decline in net sales of 7.8% compared to the prior year, Newell Brands managed to increase its reported gross margin to 34.4% from 28.5% and its reported operating margin to 8.0% from 5.4%. The company attributes these gains to productivity savings, favorable mix, and pricing, which more than offset the headwinds from inflation and unfavorable foreign exchange.

Looking ahead, Newell Brands has raised its full-year 2024 outlook for operating cash flow to a range of $450 million to $550 million, up from the previous forecast of $400 million to $500 million. This revised cash flow outlook still accounts for approximately $150 million to $200 million in cash payments related to restructuring and other initiatives.

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