Newell Rubbermaid reported a core sales growth of 5.1% in announcing its second quarter 2015 financial results, with double-digit net sales growth in its Home Solutions business segment.
Newell Rubbermaid reported that its sales in the second quarter were $1.56 billion compared with $1.50 billion in the prior year. Core sales grew 5.1%. Reported gross margin was 39.8%, a 20 basis point improvement versus prior year. Second quarter reported operating margin was 13.8% and operating income was $214.7 million, compared with 14.2% and $213.3 million, respectively, in the prior year. The company also noted that its normalized operating margin was 16%, flat compared with the prior year. Its normalized operating income was $249.4 million compared with $239.7 million in the prior year. Its normalized net income was $174.5 million compared with $165.5 million in the prior year. Overall, reported net income was $148.5 million, down slightly compared with $150.6 million in the prior year.
The company reported that its Home Solutions net sales were $438.5 million, a 14.4% increase compared to the prior year, largely attributable to the contribution from the Contigo and bubba brand acquisitions. Core sales increased 1.2%, attributable to growth in Rubbermaid food storage, partially offset by continued planned contraction of the lower margin Rubbermaid consumer storage business and the absence of prior year new customer pipeline fill on Calphalon, according to the company.
Home Solutions’ normalized operating income was $69.9 million versus $48.7 million in the prior year. Normalized operating margin expanded by 320 basis points to 15.9% of sales as a result of the positive mix effect from Rubbermaid food storage, input cost deflation, and strong productivity, partially offset by increased advertising and promotion spending and the impact of negative foreign currency, the company noted.
“We have posted a strong set of second quarter results with core sales growth of 5.1% and normalized earnings per share growth of 8.5%, despite unprecedented foreign exchange pressure on earnings,” said Michael Polk, president and CEO, Newell Rubbermaid.
“We are driving accelerated growth and earnings performance as a result of strengthened innovation, increased investment in brands, aggressive cost programs and excellent commercial execution. Our strong second quarter results represent another milestone in our journey to establish Newell’s story of both category leading growth and margin development,” he added.