Newell Rubbermaid, in reporting its fourth quarter results, noted a 6.2% core sales growth overall. However, its Home Solutions segment net sales were $441.8 million, a 3.7% decline compared with the prior year.
“We have delivered another set of strong results for the fourth quarter. Core sales grew 6.2%, driven by strengthened innovation, increased brand support and excellent commercial execution,” said Michael Polk, president and CEO, Newell Rubbermaid.
“This strong performance, along with continued progress on margins, resulted in normalized earnings per share growth of over 14%. Our operating model is working and we enter 2016 with a clear line of sight to another year of strong core sales and earnings growth,” he added.
In December, Newell Rubbermaid announced a definitive agreement to combine with Jarden Corporation, creating a $16 billion consumer goods company. The transaction is expected to be completed in the second quarter. “The combination will substantially scale our presence in key geographies, customers and channels, and is expected to deliver at least $500 million in cost synergies. The transaction is expected to be accretive to normalized earnings per share in year one, with strong double-digit accretion by year three,” said Polk.
The company reported that its net sales in the fourth quarter were $1.56 billion compared with $1.53 billion in the prior year.
Newell Rubbermaid’s normalized net income was $151.1 million compared with $135.3 million in the prior year. Normalized diluted earnings per share were $0.56, an increase of 14.3% versus $0.49 in the prior year, with the improvement primarily attributable to the increase in core sales, gross margin expansion, the positive impact of fewer outstanding shares and a lower normalized tax rate, which more than offset negative foreign currency impacts and higher advertising and promotion spend, the company noted.
Reported net income was $13.2 million compared with $52 million in the prior year. Reported diluted earnings per share were $0.05 compared with $0.19 in the prior year.
In reporting the fourth quarter, the Home Solutions operating segment net sales were $441.8 million, a 3.7% decline compared with prior year. Core sales increased 0.1% driven by double-digit food and beverage growth largely offset by the planned contraction of the lower margin Rubbermaid consumer storage business and a timing shift on Calphalon caused by the transition to new product offerings, the company noted.
Normalized operating income in Home Solutions was $57.2 million versus $60.7 million in the prior year. Normalized operating margin was 12.9%, compared with 13.2% in the prior year, as pricing, input cost deflation and productivity were offset by higher advertising and promotion spend in support of new product launches, the company noted.