Appliances Help Boost Newell’s Q2 Sales

Newell Brands reported solid sales gains in the second quarter driven by top line growth in several product segments including appliances, Yankee Candle and food and beverage, company officials said.

Net sales for the quarter were $3.86 billion, compared with $1.56 billion in the prior year. The increase was due largely to the inclusion of $2.22 billion in net sales from the acquired Jarden business. Core sales were up 5%.

Reported net income was $135.2 million compared with $148.5 million in the prior year. Reported diluted earnings per share were $0.30 compared with $0.55 in the prior year. The decline was largely attributable to the income related to the acquired Jarden businesses, strong income growth on the legacy Newell Rubbermaid businesses and a $161 million gain on the sale of its décor business, offset by dilution from a higher share count and expenses related to the Jarden transaction and other factors.

“Increased investment in consumer-driven innovation and advertising and promotion helped drive broad-based market share gains on our strategic businesses and in our priority geographies,” said Michael Polk, CEO of Newell Brands. “Gross margin and operating cash flow were on plan, and we believe we are well positioned to achieve our full year financial outlook.”

The Consumer Solutions division net sales were $406.6 million. On a pro forma basis, net sales increased 4.9% versus prior year, driven by strong growth in kitchen appliances, offset by negative foreign exchange. Core sales increased 8.3% on a pro forma basis compared with prior year.

The segment had a reported operating loss of $16.5 million reflecting inventory step-up and integration and other costs related to the Jarden transaction. Reported operating margin was not meaningful due to the operating loss. Normalized operating income was $49.5 million. Normalized operating margin was 12.2% of sales.

Home Solutions division net sales decreased 1.1% to $433.5 million as strong food and beverage growth driven by innovation such as the Rubbermaid FreshWorks produce saver and strong growth of the Contigo and Bubba beverageware brands was more than offset by the continued planned contraction of the lower margin Rubbermaid consumer storage business, a decline in the divested décor business and unfavorable foreign currency, company officials said.

Home Solutions core sales increased 1.7%. Reported operating income was $41.7 million compared with $68.7 million in the prior year, due largely to a significant increase in advertising and promotion on new products and unfavorable foreign currency. Reported operating margin was 9.6% of sales, a 610 basis point decrease compared with the prior year. Normalized operating income was $47.9 million versus $69.9 million last year. Normalized operating margin was 11% of sales, a 490 basis point decrease versus last year.