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Newell (NWL) Poised for Growth, Unveils Strategic Realignment
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Newell Brands Inc. (NWL - Free Report) unveiled a strategic organizational realignment aimed at enhancing its front-end commercial capabilities. This move is in line with the company's broader corporate strategy, "Where to Play / How to Win," which was introduced in June 2023 and focuses on sustainable and profitable growth.
The organizational realignment is designed to fortify Newell's front-end commercial capabilities, including consumer understanding and brand communication. This is aligned with the company's strategic choice to disproportionately invest in its largest and most profitable brands. Management emphasized the importance of these changes in driving sustainable and profitable growth.
The new brand management model within the existing global segments will feature a full P&L ownership, supporting accountability and ownership of financial results. The strategic goal is to enhance consistency, reduce complexity and facilitate the company to operate with superior speed and agility.
Management acknowledged the need for difficult but necessary actions during this transition, expressing appreciation for employees' efforts as the company reshapes its organization for sustainable long-term competitive advantage and value creation.
Shares of this Zacks Rank #3 (Hold) company have rallied 26.7% in the past three months compared with the industry’s growth of 8.5%.
Image Source: Zacks Investment Research
Organizational Design Changes
The realignment includes several key organizational design changes, including cross-functional brand management organization, realigning business unit finance, simplifying and standardizing regional go-to-market organizations, and centralizing various functions.
Cross-Functional Brand Management Organization: A new cross-functional brand management organization will be established to foster collaboration and cohesive management of brands across the company.
Business Unit Finance Realignment: The finance structure will be realigned to fully support the new global brand management model.
Simplified Regional Go-to-Market Organizations: Regional go-to-market organizations will be simplified and standardized to drive efficiency and consistency.
Centralization of Functions: Various functions, including domestic retail sales teams, digital technology, business-aligned accounting personnel, Manufacturing Quality team and Human Resources functions, will be centralized to drive standardization, efficiency and scale. This is in line with NWL’s One Newell approach.
The company is likely to further optimize its real estate footprint and pursue other cost-reduction initiatives. These actions are expected to be implemented by the end of 2024.
On the completion of this realignment, the organizational changes are expected to result in annualized pre-tax savings of $65-$90 million, net of reinvestments. The company anticipates realizing $55-$70 million of these savings in 2024.
The company expects to incur $75-$90 million of restructuring and related charges associated with these actions. A substantial portion of these charges is expected to be incurred by the end of 2024. As part of the realignment, Newell plans to cut office roles by nearly 7%, with most actions likely to be completed by the end of 2024, depending on local law and consultation requirements.
The company plans to share additional details about the organizational realignment in the filing with the Securities and Exchange Commission. It is likely to provide more insights on the realignment during its fourth-quarter and 2023 earnings call scheduled for Feb 9, 2024.
Conclusion
Newell’s strategic realignment reflects its commitment to refining its organizational structure for sustained growth and efficiency. The focus on brand management, operational efficiencies and cost savings positions the company for a more agile and competitive future in the consumer goods market. The transparency in sharing these changes demonstrates NWL’s dedication to creating long-term value for its stakeholders.
Stocks to Consider
Some better-ranked companies in the Consumer Staples sector are Ollie's Bargain Outlet (OLLI - Free Report) , Edgewell Personal Care (EPC - Free Report) and Colgate-Palmolive (CL - Free Report)
Ollie's, a value retailer of brand name merchandise at drastically reduced prices, currently carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ollie's fiscal 2023 sales and earnings suggests growth of 14.9% and 74.7%, respectively, from the year-ago reported numbers. The consensus mark for OLLI’s earnings per share has moved up 0.7% in the past 30 days.
Edgewell manufactures and markets personal care products. It currently carries a Zacks Rank #2. EPC has a trailing four-quarter earnings surprise of 34.9%, on average.
The Zacks Consensus Estimate for Edgewell’s current financial-year sales and earnings suggests growth of 2% and 5.9%, respectively, from the year-ago period’s actuals. The consensus mark for EPC’s earnings per share has been unchanged in the past 30 days.
Colgate, a leading oral care and consumer products company, currently has a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 3.6%, on average.
The Zacks Consensus Estimate for Colgate’s 2023 sales and earnings suggests growth of 7.9% and 8.1%, respectively, from the year-ago reported numbers. The consensus mark for CL’s earnings per share has been unchanged in the past 30 days.
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Newell (NWL) Poised for Growth, Unveils Strategic Realignment
Newell Brands Inc. (NWL - Free Report) unveiled a strategic organizational realignment aimed at enhancing its front-end commercial capabilities. This move is in line with the company's broader corporate strategy, "Where to Play / How to Win," which was introduced in June 2023 and focuses on sustainable and profitable growth.
The organizational realignment is designed to fortify Newell's front-end commercial capabilities, including consumer understanding and brand communication. This is aligned with the company's strategic choice to disproportionately invest in its largest and most profitable brands. Management emphasized the importance of these changes in driving sustainable and profitable growth.
The new brand management model within the existing global segments will feature a full P&L ownership, supporting accountability and ownership of financial results. The strategic goal is to enhance consistency, reduce complexity and facilitate the company to operate with superior speed and agility.
Management acknowledged the need for difficult but necessary actions during this transition, expressing appreciation for employees' efforts as the company reshapes its organization for sustainable long-term competitive advantage and value creation.
Shares of this Zacks Rank #3 (Hold) company have rallied 26.7% in the past three months compared with the industry’s growth of 8.5%.
Image Source: Zacks Investment Research
Organizational Design Changes
The realignment includes several key organizational design changes, including cross-functional brand management organization, realigning business unit finance, simplifying and standardizing regional go-to-market organizations, and centralizing various functions.
Cross-Functional Brand Management Organization: A new cross-functional brand management organization will be established to foster collaboration and cohesive management of brands across the company.
Business Unit Finance Realignment: The finance structure will be realigned to fully support the new global brand management model.
Simplified Regional Go-to-Market Organizations: Regional go-to-market organizations will be simplified and standardized to drive efficiency and consistency.
Centralization of Functions: Various functions, including domestic retail sales teams, digital technology, business-aligned accounting personnel, Manufacturing Quality team and Human Resources functions, will be centralized to drive standardization, efficiency and scale. This is in line with NWL’s One Newell approach.
The company is likely to further optimize its real estate footprint and pursue other cost-reduction initiatives. These actions are expected to be implemented by the end of 2024.
On the completion of this realignment, the organizational changes are expected to result in annualized pre-tax savings of $65-$90 million, net of reinvestments. The company anticipates realizing $55-$70 million of these savings in 2024.
The company expects to incur $75-$90 million of restructuring and related charges associated with these actions. A substantial portion of these charges is expected to be incurred by the end of 2024. As part of the realignment, Newell plans to cut office roles by nearly 7%, with most actions likely to be completed by the end of 2024, depending on local law and consultation requirements.
The company plans to share additional details about the organizational realignment in the filing with the Securities and Exchange Commission. It is likely to provide more insights on the realignment during its fourth-quarter and 2023 earnings call scheduled for Feb 9, 2024.
Conclusion
Newell’s strategic realignment reflects its commitment to refining its organizational structure for sustained growth and efficiency. The focus on brand management, operational efficiencies and cost savings positions the company for a more agile and competitive future in the consumer goods market. The transparency in sharing these changes demonstrates NWL’s dedication to creating long-term value for its stakeholders.
Stocks to Consider
Some better-ranked companies in the Consumer Staples sector are Ollie's Bargain Outlet (OLLI - Free Report) , Edgewell Personal Care (EPC - Free Report) and Colgate-Palmolive (CL - Free Report)
Ollie's, a value retailer of brand name merchandise at drastically reduced prices, currently carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ollie's fiscal 2023 sales and earnings suggests growth of 14.9% and 74.7%, respectively, from the year-ago reported numbers. The consensus mark for OLLI’s earnings per share has moved up 0.7% in the past 30 days.
Edgewell manufactures and markets personal care products. It currently carries a Zacks Rank #2. EPC has a trailing four-quarter earnings surprise of 34.9%, on average.
The Zacks Consensus Estimate for Edgewell’s current financial-year sales and earnings suggests growth of 2% and 5.9%, respectively, from the year-ago period’s actuals. The consensus mark for EPC’s earnings per share has been unchanged in the past 30 days.
Colgate, a leading oral care and consumer products company, currently has a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 3.6%, on average.
The Zacks Consensus Estimate for Colgate’s 2023 sales and earnings suggests growth of 7.9% and 8.1%, respectively, from the year-ago reported numbers. The consensus mark for CL’s earnings per share has been unchanged in the past 30 days.