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Newell Brands: Can Cost Cuts Offset Soft Consumer Demand?
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Key Takeaways
Newell's Q4 net sales fell 2.7% and core sales declined 4.1% amid softer demand.
NWL's productivity plan targets more than $75M savings through automation, digitization and AI.
Newell expects FY26 operating margin of 8.6%-9.2%, up about 50 bps year over year.
Newell Brands Inc. (NWL - Free Report) is operating in a challenging environment characterized by weakening consumer demand, which has weighed on the company’s recent performance. In the fourth quarter of 2025, the company reported declines in both net sales and core sales, on a year-over-year basis. Net sales fell 2.7%, while core sales decreased 4.1% compared with the prior year. Additionally, several of Newell’s product categories that were initially expected to remain flat in 2025 instead declined by roughly 2–3 percentage points, reflecting the softer demand backdrop.
In response to these pressures, the company introduced a global productivity plan in the fourth quarter aimed at improving competitiveness, simplifying organizational structures and supporting long-term value creation. The initiative leverages automation, digitization and artificial intelligence to streamline internal processes, accelerate operational cycle times and improve execution across the organization. As part of the plan, resources are being reallocated toward higher-value activities, including innovation and brand building, to create a more agile and performance-driven company.
Artificial intelligence (AI) is also being increasingly integrated into the company’s marketing and product development activities. AI tools now assist in producing digital marketing materials such as videos, photography and copy, enabling faster content creation while lowering costs and shortening production timelines. These capabilities are helping the company accelerate processes and strengthen its ability to scale innovation more efficiently.
For 2026, the company expects normalized operating margin of 8.6-9.2%, with the midpoint representing a 50-basis-point (bps) improvement from 2025. Most of this expansion is anticipated to come from lower overhead expenses. The productivity plan is also projected to deliver more than $75 million in year-over-year savings and reduce overhead by nearly 100 bps, as a percentage of sales. These savings will support Newell to offset inflation and higher tariff costs while supporting increased investment in innovation without compromising profitability.
The Zacks Rundown for NWL
Shares of this Zacks Rank #3 (Hold) company have gained 5.2% in the past three months compared to the industry’s rise of 1.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, NWL trades at a forward price-to-earnings ratio of 7.02X, lower than the industry’s average of 18.42X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NWL’s current fiscal year earnings implies a year-over-year decline of 1.8%, and the same for next fiscal year earnings estimate implies a year-over-year growth of 11.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
The Zacks Consensus Estimate for CL's current fiscal-year sales and earnings implies growth of 4% and 5.7%, from the year-ago reported figures. CL delivered a trailing four-quarter earnings surprise of 4%, on average.
ARKO Corp. (ARKO - Free Report) operates a chain of convenience stores in the United States. ARKO currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for ARKO's current fiscal-year sales implies a decline of 5.4%, while the same for current fiscal-year earnings impliesy growth of 46.7% from the year-ago reported figures. ARKO delivered a trailing four-quarter earnings surprise of 36.5%, on average.
Kenvue Inc. (KVUE - Free Report) operates as a consumer health company in the United States, the rest of North America, Europe, the Middle East, Africa, the Asia-Pacific and Latin America. KVUE currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for KVUE's current fiscal-year sales and earnings implies growth of 2.9% and 1.9%, respectively, from the year-ago actuals. KVUE delivered a trailing four-quarter negative earnings surprise of 9.8%, on average.
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Newell Brands: Can Cost Cuts Offset Soft Consumer Demand?
Key Takeaways
Newell Brands Inc. (NWL - Free Report) is operating in a challenging environment characterized by weakening consumer demand, which has weighed on the company’s recent performance. In the fourth quarter of 2025, the company reported declines in both net sales and core sales, on a year-over-year basis. Net sales fell 2.7%, while core sales decreased 4.1% compared with the prior year. Additionally, several of Newell’s product categories that were initially expected to remain flat in 2025 instead declined by roughly 2–3 percentage points, reflecting the softer demand backdrop.
In response to these pressures, the company introduced a global productivity plan in the fourth quarter aimed at improving competitiveness, simplifying organizational structures and supporting long-term value creation. The initiative leverages automation, digitization and artificial intelligence to streamline internal processes, accelerate operational cycle times and improve execution across the organization. As part of the plan, resources are being reallocated toward higher-value activities, including innovation and brand building, to create a more agile and performance-driven company.
Artificial intelligence (AI) is also being increasingly integrated into the company’s marketing and product development activities. AI tools now assist in producing digital marketing materials such as videos, photography and copy, enabling faster content creation while lowering costs and shortening production timelines. These capabilities are helping the company accelerate processes and strengthen its ability to scale innovation more efficiently.
For 2026, the company expects normalized operating margin of 8.6-9.2%, with the midpoint representing a 50-basis-point (bps) improvement from 2025. Most of this expansion is anticipated to come from lower overhead expenses. The productivity plan is also projected to deliver more than $75 million in year-over-year savings and reduce overhead by nearly 100 bps, as a percentage of sales. These savings will support Newell to offset inflation and higher tariff costs while supporting increased investment in innovation without compromising profitability.
The Zacks Rundown for NWL
Shares of this Zacks Rank #3 (Hold) company have gained 5.2% in the past three months compared to the industry’s rise of 1.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, NWL trades at a forward price-to-earnings ratio of 7.02X, lower than the industry’s average of 18.42X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NWL’s current fiscal year earnings implies a year-over-year decline of 1.8%, and the same for next fiscal year earnings estimate implies a year-over-year growth of 11.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Colgate-Palmolive Company (CL - Free Report) manufactures and sells consumer products in the United States and internationally. CL currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CL's current fiscal-year sales and earnings implies growth of 4% and 5.7%, from the year-ago reported figures. CL delivered a trailing four-quarter earnings surprise of 4%, on average.
ARKO Corp. (ARKO - Free Report) operates a chain of convenience stores in the United States. ARKO currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for ARKO's current fiscal-year sales implies a decline of 5.4%, while the same for current fiscal-year earnings impliesy growth of 46.7% from the year-ago reported figures. ARKO delivered a trailing four-quarter earnings surprise of 36.5%, on average.
Kenvue Inc. (KVUE - Free Report) operates as a consumer health company in the United States, the rest of North America, Europe, the Middle East, Africa, the Asia-Pacific and Latin America. KVUE currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for KVUE's current fiscal-year sales and earnings implies growth of 2.9% and 1.9%, respectively, from the year-ago actuals. KVUE delivered a trailing four-quarter negative earnings surprise of 9.8%, on average.