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Core Sales Trends: Is Newell's Transformation Finally Working?
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Key Takeaways
Newell's core sales fell 3.5% in Q1 but improved sequentially and beat management's expectations.
Six of Newell's top 10 brands gained share, while six delivered year-over-year POS growth in Q1.
Newell plans 25 major innovations in 2026 and expects core sales growth to return in Q2.
Newell Brands Inc.’s (NWL - Free Report) turnaround strategy appears to be gaining traction, supported by improving consumer demand, stronger point-of-sale trends and market share gains across several key brands. Although core sales remained negative in the first quarter, management’s commentary suggests that the company’s renewed focus on innovation, advertising investments and retail execution is beginning to translate into better business performance, raising the question of whether Newell is approaching a sustainable growth inflection point.
The numbers suggest meaningful progress. First-quarter core sales declined 3.5% year over year, but the result exceeded management’s expectations and marked a sequential improvement from prior quarters. Six of Newell’s top 10 brands gained market share during the quarter, while six brands also posted year-over-year point-of-sale growth for the first time in more than four years. The Learning & Development segment returned to growth, driven by a 4.9% increase in the Baby business. Additionally, the company benefited from a $25 million net pricing advantage tied to improved customer program management, helping normalize operating margin and expand it by 30 basis points to 4.8%.
A key driver behind the improving sales trajectory is Newell’s strengthened innovation pipeline. The company plans to launch 25 Tier 1 and Tier 2 innovations in 2026, up from 18 in the previous year, with products spanning all business segments. Management noted strong early consumer response to innovations such as Graco’s new car seats and Coleman’s Snap 'N Go cooler. Coupled with higher advertising and promotional spending, these initiatives are supporting stronger retailer relationships, distribution gains and shelf placement opportunities, which should provide additional sales momentum throughout the year.
Despite encouraging signs, challenges remain. Commodity inflation, particularly higher resin and transportation costs, continues to pressure profitability, while consumer spending trends remain uneven across income groups. Nevertheless, Newell’s reduced exposure to China sourcing, expanded domestic manufacturing capabilities and disciplined cost-management efforts position the company well to navigate these headwinds. With management now expecting a return to core sales growth in the second quarter and raising its full-year sales outlook, the turnaround story appears increasingly credible, though sustained execution will be critical to proving that the recovery is durable.
Newell’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have rallied 43.8% in the past three months, outperforming both the industry and the broader Consumer Staples sector, which rose 0.1% and 2.9%, respectively.
NWL Stock's Past Three-Month Performance
Image Source: Zacks Investment Research
Is NWL a Value Play Stock?
Newell currently trades at a forward 12-month P/E ratio of 8.59X, which is notably lower than the industry multiple of 17.84X and the sector average of 16.47X. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 8.3% and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 28.9%, on average.
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
The consensus estimate for United Natural’s current fiscal-year earnings implies growth of 254.9% from the year-ago figures.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA has a Zacks Rank of 2. Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.
View the Zacks #1 Rank List
Image: Bigstock
Core Sales Trends: Is Newell's Transformation Finally Working?
Key Takeaways
Newell Brands Inc.’s (NWL - Free Report) turnaround strategy appears to be gaining traction, supported by improving consumer demand, stronger point-of-sale trends and market share gains across several key brands. Although core sales remained negative in the first quarter, management’s commentary suggests that the company’s renewed focus on innovation, advertising investments and retail execution is beginning to translate into better business performance, raising the question of whether Newell is approaching a sustainable growth inflection point.
The numbers suggest meaningful progress. First-quarter core sales declined 3.5% year over year, but the result exceeded management’s expectations and marked a sequential improvement from prior quarters. Six of Newell’s top 10 brands gained market share during the quarter, while six brands also posted year-over-year point-of-sale growth for the first time in more than four years. The Learning & Development segment returned to growth, driven by a 4.9% increase in the Baby business. Additionally, the company benefited from a $25 million net pricing advantage tied to improved customer program management, helping normalize operating margin and expand it by 30 basis points to 4.8%.
A key driver behind the improving sales trajectory is Newell’s strengthened innovation pipeline. The company plans to launch 25 Tier 1 and Tier 2 innovations in 2026, up from 18 in the previous year, with products spanning all business segments. Management noted strong early consumer response to innovations such as Graco’s new car seats and Coleman’s Snap 'N Go cooler. Coupled with higher advertising and promotional spending, these initiatives are supporting stronger retailer relationships, distribution gains and shelf placement opportunities, which should provide additional sales momentum throughout the year.
Despite encouraging signs, challenges remain. Commodity inflation, particularly higher resin and transportation costs, continues to pressure profitability, while consumer spending trends remain uneven across income groups. Nevertheless, Newell’s reduced exposure to China sourcing, expanded domestic manufacturing capabilities and disciplined cost-management efforts position the company well to navigate these headwinds. With management now expecting a return to core sales growth in the second quarter and raising its full-year sales outlook, the turnaround story appears increasingly credible, though sustained execution will be critical to proving that the recovery is durable.
Newell’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have rallied 43.8% in the past three months, outperforming both the industry and the broader Consumer Staples sector, which rose 0.1% and 2.9%, respectively.
NWL Stock's Past Three-Month Performance
Image Source: Zacks Investment Research
Is NWL a Value Play Stock?
Newell currently trades at a forward 12-month P/E ratio of 8.59X, which is notably lower than the industry multiple of 17.84X and the sector average of 16.47X. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
NWL P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 8.3% and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 28.9%, on average.
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
The consensus estimate for United Natural’s current fiscal-year earnings implies growth of 254.9% from the year-ago figures.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA has a Zacks Rank of 2. Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.