One of the leading manufacturers of home and office products in the U.S., Newell Rubbermaid Inc. ( NWL - Analyst Report ) has recently slashed its sales and earnings guidance for fiscal 2011. The company has blamed slower spending in the United States and increasing inflationary pressure as the main reason behind this gloomier guidance.

As per Newell, the company's large retail customers have downgraded their U.S. growth expectations for the year due to weak consumer confidence levels and lower spending trends, impacting the company’s customer ordering patterns.

Newell now expects a rise of 3% to 4% in core sales for fiscal 2011 instead of 4% to 5%, forecasted earlier. Gross margin is expected to improve in the range of 40 to 60 basis points, down from 50 to 75 basis points guided earlier.

Consequently, the non-GAAP earnings for fiscal 2011 are expected to be in the range of $1.60 to $1.67 per share, down from $1.67 to $1.70 per share anticipated earlier. However, the company still expects to generate a cash flow of $550.0 million through its operations.

Moreover, Newell also believes that its second-quarter 2011 earnings may be 15% lower than the analysts' expectations.

Despite of these economic challenges, the company is expected to execute all of its growth plans, including launch of new innovative products, faster expansion in the emerging markets and aggressive pricing to offset cost inflation.

Prior to this, on April 29, 2011, Newell reported a strong first-quarter 2011 results. Newell logged a strong earnings growth of 20% in the first quarter of 2011 to 30 cents a share from 25 cents a share in the year-ago quarter. Earnings also outpaced the Zacks Consensus Estimate of 28 cents a share.

On a reported basis, including special items, earnings per share came in at 25 cents a share, up 31.6% year over year. The strong quarterly performance was mainly attributable to increased core sales in international businesses and improved productivity.

Newell Rubbermaid is one of the leading manufacturers of home and office products in the U.S. The company also possesses a strong portfolio of widely popular brands, such as Sharpie, Paper Mate, Dymo, Expo, Waterman, Parker, Irwin, Lenox, Rubbermaid, Levolor, Graco, Calphalon and Goody. Leveraging its strong brand equity, Newell Rubbermaid expects robust earnings, provided the market scenario changes for the better.

The company faces intense competition from numerous manufacturers and distributors of consumer and commercial products, such as Jarden Corp. ( JAH - Snapshot Report ) , Fortune Brands Inc. ( ) , Cooper Industries plc ( ) and Avery Dennison Corporation ( AVY - Analyst Report ) .

Newell Rubbermaid currently has a Zacks #3 Rank, implying a short-term 'Hold' rating on the stock. Besides, the company retains a long-term 'Neutral' recommendation.