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Newell Brands' Q1 Loss Narrower Than Expected, Lower Core Sales Hurt
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Key Takeaways
NWL posted a narrower Q1 loss and topped sales estimates, driven by pricing and improving demand trends.
Newell saw gross margin rise 100 bps as pricing and productivity offset tariffs and volume softness.
NWL raised 2026 sales and EPS outlook, expecting growth to return in Q2 as strategic actions gain traction.
Newell Brands Inc. (NWL - Free Report) posted first-quarter 2026 reported normalized loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 9 cents. The company recorded a loss per share of a penny in the year-ago quarter. Net sales of $1.55 billion dipped 1.1% year over year but topped the Zacks Consensus Estimate of $1.51 billion.
Results came in ahead of management’s expectations, aided by improving consumer demand and favorable pricing dynamics. Core sales fell 3.5% year over year, but surpassed management’s expectations on better-than-anticipated category performance and consumer demand, with a net pricing benefit from customer programs, better claims experience and deduction management.
Management noted improving point-of-sale and share trends as investment in innovation and advertising supported demand despite a challenging macro backdrop. The company said it expects to return to top-line growth in the second quarter, as its strategic actions are gaining traction.
Newell shares have gained around 9% in premarket trading after the company posted quarterly results and raised its outlook. In the past six months, the company’s shares have rallied 37.3% against the industry’s 2.2% decline.
Newell Brands Inc. Price, Consensus and EPS Surprise
Gross margin increased 100 basis points (bps) year over year to 33.1%, as pricing and gross productivity more than offset soft volumes, inflation and tariff costs. Normalized gross margin improved 70 bps to 33.2%, signaling better underlying profitability.
Operating income rose 61.9% to $34 million from $21 million, while normalized operating income jumped 4.2% to $74 million. Normalized operating margin expanded 30 bps to 4.8%, reflecting improved operating performance and disciplined cost management. Normalized EBITDA was $135 million, down 0.7% from $136 million seen in the year-ago period. Our model anticipated an decrease of 23.9% in adjusted EBITDA for the same quarter.
NWL’s Segmental Details
Net sales in the Home & Commercial Solutions segment were $780 million, down 3.9% from the year-ago period. The decrease was due to a 6.9% decline in core sales, offset by favorable foreign exchange rates. We had expected sales of $778.7 million for the segment.
The Learning and Development segment recorded net sales of $554.3 million, up 3.8% from $572 million in the year-ago quarter. Core sales grew 2%, offset by favorable foreign exchange rates. We had expected net sales of $624 million for the segment.
The Outdoor and Recreation segment’s net sales were $175 million, down 3.8% in the year-ago quarter. Core sales fell 5.7%, offset by favorable foreign exchange. We had expected the segment's net sales to be $172 million.
Other Financial Details of Newell
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $201 million, long-term debt of $4.5 billion, outstanding debt of $5 billion and shareholders’ equity of $2.3 billion.
NWL also used $233 million in cash for operating activities during first-quarter 2026.
Newell Lifts 2026 Outlook
Newell updated its outlook for 2026, raising expectations for net sales, core sales and normalized earnings per share. The company now sees full-year net sales flat to up 2% and core sales down 1% to up 1%, while maintaining its normalized operating margin view of 8.6% to 9.2%. It raised its normalized earnings per share (EPS) outlook to 56-60 cents, versus 54-60 cents anticipated earlier. It had earlier guided net sales in the range of down 1% to up 1% and core sales to decline 2% to flat. NWL recorded net sales of $7.20 billion and EPS of 57 cents in 2025.
For the second quarter, management expects net sales to be flat to up 2% and core sales flat to up 2%, with a normalized operating margin of 9.6% to 10.2% and normalized EPS of 16-19 cents. NWL recorded net sales of $1.94 billion and EPS of 24 cents in the year-earlier quarter.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales indicates growth of 9.3% from the prior-year level. FRPT delivered a trailing four-quarter earnings surprise of 50%, on average.
United Natural Foods (UNFI - Free Report) , which is the leading distributor of natural, organic and specialty food and non-food products, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for United Natural Foods’ current financial-year earnings is expected to rise 254.9% from the year-ago reported figure. UNFI delivered a trailing four-quarter earnings surprise of 51.9%, on average.
B&G Foods (BGS - Free Report) , which has a diversified portfolio of brands, including B&G, B&M, Cream of Wheat, Las Palmas and more, currently carries a Zacks Rank of 2. BGS delivered a negative average earnings surprise of 19.5% in the trailing four quarters.
The Zacks Consensus Estimate for BGS’ current financial-year earnings indicates growth of 5.9% from the year-ago number.
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Newell Brands' Q1 Loss Narrower Than Expected, Lower Core Sales Hurt
Key Takeaways
Newell Brands Inc. (NWL - Free Report) posted first-quarter 2026 reported normalized loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 9 cents. The company recorded a loss per share of a penny in the year-ago quarter. Net sales of $1.55 billion dipped 1.1% year over year but topped the Zacks Consensus Estimate of $1.51 billion.
Results came in ahead of management’s expectations, aided by improving consumer demand and favorable pricing dynamics. Core sales fell 3.5% year over year, but surpassed management’s expectations on better-than-anticipated category performance and consumer demand, with a net pricing benefit from customer programs, better claims experience and deduction management.
Management noted improving point-of-sale and share trends as investment in innovation and advertising supported demand despite a challenging macro backdrop. The company said it expects to return to top-line growth in the second quarter, as its strategic actions are gaining traction.
Newell shares have gained around 9% in premarket trading after the company posted quarterly results and raised its outlook. In the past six months, the company’s shares have rallied 37.3% against the industry’s 2.2% decline.
Newell Brands Inc. Price, Consensus and EPS Surprise
Newell Brands Inc. price-consensus-eps-surprise-chart | Newell Brands Inc. Quote
Newell’s Margin Analysis
Gross margin increased 100 basis points (bps) year over year to 33.1%, as pricing and gross productivity more than offset soft volumes, inflation and tariff costs. Normalized gross margin improved 70 bps to 33.2%, signaling better underlying profitability.
Operating income rose 61.9% to $34 million from $21 million, while normalized operating income jumped 4.2% to $74 million. Normalized operating margin expanded 30 bps to 4.8%, reflecting improved operating performance and disciplined cost management. Normalized EBITDA was $135 million, down 0.7% from $136 million seen in the year-ago period. Our model anticipated an decrease of 23.9% in adjusted EBITDA for the same quarter.
NWL’s Segmental Details
Net sales in the Home & Commercial Solutions segment were $780 million, down 3.9% from the year-ago period. The decrease was due to a 6.9% decline in core sales, offset by favorable foreign exchange rates. We had expected sales of $778.7 million for the segment.
The Learning and Development segment recorded net sales of $554.3 million, up 3.8% from $572 million in the year-ago quarter. Core sales grew 2%, offset by favorable foreign exchange rates. We had expected net sales of $624 million for the segment.
The Outdoor and Recreation segment’s net sales were $175 million, down 3.8% in the year-ago quarter. Core sales fell 5.7%, offset by favorable foreign exchange. We had expected the segment's net sales to be $172 million.
Other Financial Details of Newell
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $201 million, long-term debt of $4.5 billion, outstanding debt of $5 billion and shareholders’ equity of $2.3 billion.
NWL also used $233 million in cash for operating activities during first-quarter 2026.
Newell Lifts 2026 Outlook
Newell updated its outlook for 2026, raising expectations for net sales, core sales and normalized earnings per share. The company now sees full-year net sales flat to up 2% and core sales down 1% to up 1%, while maintaining its normalized operating margin view of 8.6% to 9.2%. It raised its normalized earnings per share (EPS) outlook to 56-60 cents, versus 54-60 cents anticipated earlier. It had earlier guided net sales in the range of down 1% to up 1% and core sales to decline 2% to flat. NWL recorded net sales of $7.20 billion and EPS of 57 cents in 2025.
For the second quarter, management expects net sales to be flat to up 2% and core sales flat to up 2%, with a normalized operating margin of 9.6% to 10.2% and normalized EPS of 16-19 cents. NWL recorded net sales of $1.94 billion and EPS of 24 cents in the year-earlier quarter.
3 Stocks Looking Good
Freshpet, Inc. (FRPT - Free Report) , which is a pet food company, 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 Freshpet’s current financial-year sales indicates growth of 9.3% from the prior-year level. FRPT delivered a trailing four-quarter earnings surprise of 50%, on average.
United Natural Foods (UNFI - Free Report) , which is the leading distributor of natural, organic and specialty food and non-food products, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for United Natural Foods’ current financial-year earnings is expected to rise 254.9% from the year-ago reported figure. UNFI delivered a trailing four-quarter earnings surprise of 51.9%, on average.
B&G Foods (BGS - Free Report) , which has a diversified portfolio of brands, including B&G, B&M, Cream of Wheat, Las Palmas and more, currently carries a Zacks Rank of 2. BGS delivered a negative average earnings surprise of 19.5% in the trailing four quarters.
The Zacks Consensus Estimate for BGS’ current financial-year earnings indicates growth of 5.9% from the year-ago number.