Growth in international markets and e-commerce were key drivers for solid first quarter results at Newell Brands, company officials said.
Net sales were $3.3 billion, up 148.4%, with core sales up 2.5%. Normalized diluted earnings per share were $0.34 compared with $0.40 in the prior year. Increased sales and operating profitability were more than offset by higher interest expense and higher share count associated with the Jarden transaction, company officials said.
Reported operating income was $156 million, or 4.8% of sales, compared with $125 million, or 9.5% of sales, in the prior year. The margin decline reflected the negative mix effects related to the Jarden acquisition, increased investment related to the expansion of brand development, e-commerce, and insights, as well as costs associated with the delivery of synergies, the acquisition-related increase in amortization of intangibles and the negative impact from foreign currency, partially offset by increased net sales and the benefits from cost synergies and other savings. The company reported net income of $639 million compared with net income of $40.5 million in the prior year first quarter.
“Our first quarter results provide strong evidence of our team’s capacity to perform while we transform,” said Michael Polk, Newell Brands CEO. “Our international growth coupled with very strong e-commerce results more than offset the continuing impact of inventory de-stocking in U.S. mass channels.”
The company also announced it has aligned its 15 operating divisions for reporting purposes into five segments; Live, Learn, Work, Play and Other. The Live segment includes appliances and cookware, baby and parenting, food and home fragrance.
In the first quarter, the Live segment generated net sales of $1.1 billion, an increase of 231.5% compared with $322 million in the prior year. Pro forma core sales growth of 2.7% was driven by the baby, appliances, food storage and home fragrance businesses, partially offset by softness in cookware.
Reported operating income in the segment was $57.6 million compared with $32 million in the prior year. Reported operating margin was 5.4% of sales compared with 9.9% of sales in the prior year.
The year over year difference in reported results is largely due to the inclusion of the acquired Jarden businesses and unfavorable foreign exchange, partially offset by the benefit of cost synergies and other savings.