Friday May 2nd, 2014 - 12:58PM
In its Q1 2014 financial results, Newell Rubbermaid announced net sales were $1.23 billion, a 0.7% decline versus the same period last year. Reported net income was $52.9 million, compared with $54.2 million in the prior year.
"We delivered solid first quarter results in the context of two previously communicated events. Our team did a good job overcoming the adverse impacts of the harness buckle recall on select car seats in our U.S. Baby business and the weather-related slowdown on our U.S.-centric Home Solutions business," said Michael Polk , CEO. "Strong core sales growth in Writing offset declines in Home Solutions and Baby, yielding normalized earnings per share of $0.35, flat with last year's results.
Newell-Rubbermaid reported that net sales in its Home Solutions segment were $321.2 million, a 5.2% decline compared to prior year. Adverse weather conditions attributed to point-of-sale softness and the negative effect on volume of less merchandising on certain Rubbermaid Consumer low-margin product lines, the company said. However, that softness was partially offset by increased distribution on Calphalon. Normalized operating income was $26.3 million, or 8.2% percent of sales, compared with $34.1 million, or 10.1% of sales, in the prior year. The decrease in operating margin was driven by input cost inflation and the deleveraging effect on margins of lower sales volumes, partially offset by productivity and pricing.
The company reaffirmed its guidance for 2014 core sales growth of 3% to 4%, operating margin improvement of up to 40 basis points, normalized EPS of $1.94 to $2.00 and operating cash flow of $600 to $650 million.
"We are confident in our full year financial guidance and expect the company's core sales and earnings per share growth to accelerate through the balance of the year as we significantly increase advertising and promotion investment levels in support of our brands and innovation. Importantly, the Board of Directors has approved a 13% increase in our quarterly dividend to $0.17, an annualized rate of $0.68 per share. This is the fourth dividend increase in the last three years, which is a reflection of the Board's continued confidence in Newell's strong cash generation ability and in the promise of our Growth Game Plan."