Newell Brands Posts Growth and a Paper Loss at the Same Time, Thanks to a $101 Million Write-Down

Newell Brands, the company behind Rubbermaid, Sharpie, Coleman, and Yankee Candle, reported third-quarter net sales of $1.87 billion, up 3.7% year over year, with core sales rising 3.3% across the board. CEO Chris Peterson called the growth “broad-based,” and the company said seven of its top 10 brands grew during the quarter, even if it did not say which three did not.

The headline number is messier than the underlying business, though. A $101 million non-cash impairment on an indefinite-lived tradename dragged GAAP operating income down to just $27 million and pushed the company to a net loss of $81 million, or 19 cents a share, compared with a profit a year ago. Strip out the one-time charge, and the picture flips: normalized operating margin rose to 9.8% from 8.9%, and normalized earnings per share grew to 20 cents from 17 cents. Home & Commercial Solutions, the segment that includes kitchen and home fragrance products, led the way with 6% core sales growth, while Outdoor & Recreation sales fell 6.4%.

Newell Brands also raised its full-year sales guidance, now expecting net sales growth of 2% to 3%, up from a prior range of 1% to 2%. CFO Mark Erceg flagged the priority for what comes next: “Deleveraging remains a top priority.”

Source: Newell Brands

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →