NWL

Image source: The Motley Fool. Friday, July 31, 2026 at 7:30 a.m. ET SVP of Investor Relations and Chief Communications Officer - Joanne Freiberger President and Chief Executive Officer - Chris Peterson Chief Financial Officer - Mark Erceg Operator: Good morning, and welcome to Newell Brands Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. A live webcast of the call is available at ir.newellbrands.com. I will now turn the call over to Joanne Freiberger, SVP of Investor Relations and Chief Communications Officer. Ms. Freiberger, you may begin. Joanne Freiberger: Thank you, Michelle. Good morning, everyone, and welcome to Newell Brands Second Quarter 2026 Earnings Call. On the call with me today are Chris Peterson, our President and CEO; and Mark Erceg, our CFO. Before we begin, I'd like to inform you that during today's call, we will be making forward-looking statements, which involve risks and uncertainties. Actual results and outcomes may differ materially, and we undertake no obligation to update forward-looking statements. I refer you to the cautionary language and risk factors available in our earnings release, our Form 10-K, Form 10-Q and other SEC filings available on our Investor Relations website for a further discussion of the factors affecting forward-looking statements. Today's remarks will also refer to non-GAAP financial measures, including those referred to as normalized measures. We believe these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non-GAAP measures and reconciliations between GAAP and non-GAAP measures can be found in today's earnings release and the tables that were furnished to the SEC. Thank you. And with that, I'll turn the call over to Chris. Christopher Peterson: Thank you, Joanne. Good morning, everyone, and welcome to our second quarter earnings call. When we conducted our first enterprise-wide capability assessment 3 years ago, it was clear Newell Brands needed to rebuild the front-end commercial and operating capabilities required to compete effectively and grow consistently. That work included stronger consumer insights, a more disciplined innovation system, better brand management, improved category management, greater effectiveness of customer investments and a simpler and more powerful go-to-market model. Those new capabilities built over the past several years are now taking shape and coming together in a mutually reinforcing manner. For example, consumer-led innovation supported by higher levels of advertising and promotion and stronger retailer activation is improving consumer demand and brand performance. Our innovation pipeline is broader and stronger than it has been in years. Year-to-date, all 6 business units have launched Tier 1 or Tier 2 innovation with more to come in the second half. We are on track to deliver more than 25 Tier 1 or Tier 2 innovation launches for the full year. More importantly, the process is now more consumer-led, more disciplined and more closely integrated with our commercial plans. At the same time, stronger retailer relationships, better category management capabilities and improved service execution are translating into distribution gains. As discussed last quarter, we expected the company to return to top line growth in the second quarter, driven by stronger innovation, distribution gains and improved brand marketing. These rebuilt capabilities are now showing up in our second quarter results, which represent an important milestone in Newell's turnaround. We returned to year-over-year growth in both net sales and core sales for the first time in over 4 years, and results exceeded our expectations across all key financial metrics. Net sales increased 3% and core sales grew 2.3% with both results above the high end of our guidance range. The improvement was broad-based with 5 of our 6 business units delivering year-over-year core sales growth. In addition, 7 of our top 10 brands and 5 of our top 10 countries delivered year-over-year sales growth. From a geographic standpoint, it was particularly nice to see the U.S., our largest market, leading the way, delivering approximately 5% net sales growth during the second quarter, which was the first time our domestic business has grown since COVID. Total points of distribution across our U.S. business increased mid-single digits versus last year in the second quarter, providing tangible proof that retailers are responding to the stronger innovation, category plans and execution we are bringing to the marketplace. Based on existing customer commitments and activity already underway, we expect distribution to remain a contributor to growth during the second half of the year. While distribution gains were strong in the U.S., perhaps even more importantly, point-of-sale trends were favorable, which means consumers responded well to our new innovations. Specifically, 6 of our top 10 brands delivered year-over-year POS growth in the second quarter, while 8 of our top 10 improved their growth trajectory sequentially. We also continued to gain U.S. market share behind several priority brands, including Graco, Sharpie, Expo and Coleman to name a few. These results provide further evidence that stronger innovation, higher levels of advertising and promotion and improved retail execution are translating into better consumer demand. From a segment perspective, Learning and Development was the strongest part of the portfolio, delivering nearly 5% core sales growth in the second quarter, led by continued strength in Baby and a return to growth in Writing. Baby delivered double-digit sales growth supported by strong consumer demand, increased distribution and new product innovation. Graco continued to build marketplace momentum with U.S. POS increasing at a strong double-digit rate in the second quarter and market share growing 2.7 points year-to-date. The strength was broad-based across major retail channels and reflected strong continued consumer demand for our rotating car seat platform, including the EasyTurn family of products. NUK also delivered double-digit U.S. POS growth and gained market share, supported by stronger innovation and particularly good momentum in e-commerce. Writing returned to core sales growth in the second quarter, supported by distribution gains, innovation and stronger Back-to-School execution. While the Back-to-School season is still early, the initial read has been encouraging with improved retailer execution, new distribution and strong POS growth across several priority brands. We have seen particularly good momentum behind Sharpie. We continue to build on platforms such as Sharpie S-Gel and Sharpie Creative Markers through new colors, forms and use cases while advancing a strong pipeline across the broader Writing portfolio. Home and Commercial also improved meaningfully. Kitchen and Home Fragrance returned to core sales growth in the second quarter, while commercial remained below prior year, but improved significantly versus the first quarter. Kitchen delivered its first quarter of core sales growth since early 2023, reflecting improved execution and encouraging consumer response across several priority brands. Ball's Canning business is performing strongly, supported by innovation, improved merchandising execution and share gains across the measured channels, while Rubbermaid continues to benefit from strong consumer response to the Brilliance Glass platform. In home fragrance, owned channels delivered a second consecutive quarter of growth and comparable retail stores returned to growth for the first time in more than a decade. These are encouraging signs, and we remain focused on strengthening the consumer proposition and improving execution across the business. In Commercial, the business delivered a meaningful year-over-year improvement in its core sales growth rate during the second quarter. We are focused on strengthening execution and advancing innovation behind durable platforms such as Rubbermaid Commercial Products and BRUTE while building on targeted distribution wins with key customers. Outdoor & Recreation returned to core sales growth during the important second quarter outdoor season, delivering nearly 4% growth with the U.S. leading the improvement. Coleman Snap & Go is a strong example of the consumer-led innovation we are bringing to market, addressing a real consumer need by making large capacity coolers easier to store, transport and use. We are also advancing innovation across our Contigo and Bubba beverage platforms with a focus on distinctive design and stronger consumer relevance. Our higher levels of brand support are increasingly being paired with more precise and engaging marketing. We are focused on building relevance around our strongest brands and innovations through programs that reach consumers in the right channels and create stronger retail activation. Coleman provides a strong example of how our marketing capabilities are becoming more visible. During the quarter, the team moved quickly to capitalize on a viral consumer conversation around a fictional Lazy River product, turning it into a highly relevant brand moment. The activation generated more than 90 million earned media impressions, nearly 48 million social impressions and 2.8 million consumer engagements largely through organic activity. It also attracted nearly 30,000 new consumer subscribers to our database. This is the kind of modern, culturally relevant marketing capability we are building across Newell, one that strengthens consumer engagement and helps keep our brands part of the conversation. In just a few minutes, I will turn the call over to Mark, who will walk you through our second quarter results and share our updated financial outlook. Before doing that, I want to provide some brief perspective on the macro environment. So far, the consumer and category environment has held up better than originally expected. Coming into the year, we assumed the categories in which we compete would decline about 2%. Category growth was down about approximately 1% in the first quarter and was essentially flat in the second quarter with the U.S. performing better than EMEA. Average selling prices across the market increased modestly in the second quarter, reflecting broad-based pricing actions by industry participants, whereas at Newell, our approach has been selective and targeted, focused on specific products and categories where appropriate. Even with the better first half category performance, we remain somewhat cautious about the second half and are now assuming the categories in which we compete will decline about 1% for the full year. We expect Newell to grow faster than this, driven by the improved capabilities we have built over the past several years. On the cost side, we've seen significant volatility in the external environment with input cost inflation significantly higher than what we expected at the start of the year and the tariff environment, which includes those issued under IEEPA, Section 122, Section 232 and Section 301 changing numerous times. In aggregate, current year input cost inflation, inclusive of all tariff impacts is a meaningful headwind for the year, which we are more than offsetting with strong fuel productivity savings and restructuring actions. This is allowing us to bring compelling new innovations across our leading brand portfolio to market at prices that represent strong consumer value. Finally, I want to thank the entire Newell team for their commitment, agility and resilience. The progress we delivered in the second quarter reflects the hard work of thousands of employees around the world who are bringing our strategy to life every day. Q2 was an important proof point that Newell's strategy is translating into improved performance. The broad-based nature of our top line growth gives us confidence in the trajectory of the business. Based on second quarter performance and our expectations for the balance of the year, we are raising our full year outlook across all key financial metrics as we look to build on recent momentum through disciplined execution, profitable growth and strong cash generation while continuing to earn the confidence of consumers, customers and shareholders. With that, I'll turn the call over to Mark. Mark Erceg: Thanks, Chris. Good morning, everyone. Second quarter 2026 net sales increased 3% to approximately $2 billion, while core sales increased 2.3%. Favorable foreign exchange generally accounted for the difference between net and core sales. Normalized gross and operating margin as reported and versus the prior year period was 40.8% compared with 35.6% and 16.2% versus 10.7%, respectively. The large increase in both normalized gross and operating margin was primarily due to the recording of a receivable for nearly $100 million of recoveries related to IEEPA tariffs expensed in 2025. Excluding this onetime benefit, both normalized gross margin and normalized operating margin would have been up slightly year-over-year. Separately, $26 million of recoveries related to IEEPA tariffs incurred before they were nullified and expensed during the first quarter of 2026 were recorded in the second quarter. Within the second quarter, current year IEEPA tariff recoveries when coupled with stronger sales and higher levels of gross productivity, slightly more than offset approximately $23 million of non-IEEPA current year tariff expense recognized during the second quarter and more than $60 million of inflationary pressures. During the second quarter, A&P investment increased by $9 million to support the strongest innovation program in 10, if not more years, which brought A&P spending as a percentage of sales up by 30 basis points to 5.7%. In addition, approximately $30 million of restructuring and other savings, including benefits from the previously announced productivity plan, offset wage inflation and higher variable compensation expense, allowing second quarter normalized overhead as a percentage of sales to drop by 60 basis points versus a year ago to 18.8%. Net interest expense was $87 million compared with $82 million in the prior year period, and the effective tax rate was 26.5% versus 19.3% last year. All of this taken together yielded $0.42 of normalized diluted earnings per share versus $0.24 in the prior year period. Now one might ask how $0.42 compares to our original Q2 guidance range of $0.16 to $0.19 if the nearly $100 million of onetime recoveries related to IEEPA tariffs expensed in 2025, which equates to $0.17 per share, is excluded. In that case, $0.42 minus $0.17 yields $0.25 per share. Going one step further, if we also back out approximately $26 million or $0.04 per share of recoveries related to IEEPA tariffs incurred during the first quarter of 2026 before they were nullified that were also recorded in the second quarter, we would have still exceeded the high end of our EPS guidance range. Turning to cash flow. Operating cash flow was an outflow of $204 million during the first half of 2026 compared with an outflow of $271 million in the prior year period, an improvement of $67 million. Year-to-date operating cash flow benefited from lower incentive compensation payments and better working capital management as our cash conversion cycle improved by 15 days year-over-year, driven primarily by higher days payable outstanding. We also implemented a new automated cash application and deduction management system that is accelerating cash application, improving deduction resolution and strengthening receivables management. Please note that because the cash related to the tariff recoveries accounting entry recorded in the second quarter has not been collected yet, nothing has been reflected in year-to-date OCF results. We received the first portion of the cash recovery in July, and we expect to recover a substantial portion of these funds before the end of the calendar year, but the timing of the remaining collections is subject to the government's process and remains difficult to predict. Trailing 12-month normalized EBITDA was approximately $1 billion, which produced a net leverage ratio of 4.8x compared with 5.4x at the end of the first quarter and 5.5x a year ago. Before sharing our updated outlook for the year and third quarter, let's spend a few minutes talking about tariffs, overall inflationary impacts and how we are accelerating productivity efforts to try and mitigate as much as possible the need for broad-based pricing actions. As it relates to tariffs and excluding any IEEPA refunds and including everything we currently know about the existing tariff regime, along with our internal assumptions regarding the new Section 301 forced labor tariffs and potential additional tariffs related to structural excess capacity, we expect $127 million of net P&L tariff headwind for 2026, which will be $12 million higher than what we experienced during 2025. On the inflation front, we went into 2026 expecting around $100 million of inflationary impacts. As we sit here today, we now expect that number to be closer to $200 million with about $50 million of that increase presenting itself since our last earnings call. We have been dealing with these significant challenges by leaning aggressively into our FUEL productivity program, overhead reduction efforts and AI enablement initiatives. So any pricing actions we take can be as small and as targeted as possible. That said, we want to be very clear about something. Specifically, when we look at our underlying run rate tariff costs and underlying inflationary impacts, the pricing actions we have taken don't come anywhere close to offsetting the cumulative cost impacts we have seen across our direct purchase pools, labor markets and third-party services. With that understanding and based on our second quarter performance and our latest expectations for the balance of the year, including category growth assumptions and current year tariff and inflationary impacts, we are raising our full year outlook across all key financial metrics. We now expect full year net sales growth of 1% to 2% and core sales growth ranging from flat to 1%. Normalized operating margin is expected to be between 10% and 10.4% and assuming a full year effective tax rate of around 20%, normalized diluted earnings per share are expected to be between $0.73 and $0.77. You will recall that the previous normalized EPS range was $0.56 to $0.60. This means that $0.17 or 100% of the onetime recovery related to IEEPA tariffs expensed in 2025 has simply been added to the low and high ends of our prior estimate. The in-year 2026 portion of the IEEPA tariff refund we recorded in the second quarter is being used alongside our aggressive productivity and cost control efforts to offset the significant inflationary pressures we have been experiencing. We believe this negates the need for broad-based pricing actions, which we believe is prudent for 2 reasons. First, you will recall that last year, we took major pricing actions on April 1, May 1 and July 28 to protect our structural economics. And while we were successful in doing so, it did cause us to lose some positive sales momentum. Second, we continue to believe that a meaningful portion of the inflation we are facing will roll over and normalize at some point, so we don't want to lean into pricing actions we may choose to subsequently unwind. Moving to cash. We are also raising our operating cash flow outlook to approximately $400 million, which assumes we will receive substantially all of the IEEPA tariff recovery by year-end and also reflects the updated inflation outlook. As previously indicated, Newell expects to generate an incremental $60 million of cash by the end of the year, which will be recognized as cash from investing activities from liquidating the life insurance assets associated with specialized nonqualified defined U.S. benefit plans for certain participating former senior executives. Capital expenditures were $84 million during the first half of 2026 compared with $118 million last year. So we remain on pace to invest about $200 million, which is about $50 million lower than our past 3-year average now that a number of major IT and supply chain initiatives have been successfully completed. From a leverage standpoint, we now plan to finish the year comfortably below 4.5x. For the third quarter, we expect both net sales and core sales to increase between 2% and 3%. At the midpoint, this means we expect to see sequential increases in core sales performance versus Q2. Normalized operating margin is expected to be between 9.5% and 10.2%, and normalized diluted earnings per share are expected to range from $0.18 to $0.20, with an effective Q3 tax rate of about 10%. In closing, Newell Brands returned to sales growth in the second quarter with results exceeding expectations across all key financial metrics as a reconstituted innovation program supported by considerably higher A&P levels is driving meaningful and, we believe, durable distribution gains. Chris touched on this earlier, but it bears repeating. The capability-based turnaround initiated 3 years ago is beginning to take hold. This is evidenced by the fact that 5 of our 6 business units delivered year-over-year core sales growth and 7 of our top 10 brands and half of our top 10 countries, led by the U.S. at approximately 5%, delivered year-over-year net sales growth in the second quarter. Moreover, the team continues to display amazing resourcefulness and agility in dealing with and operating in a very complex and fluid cost environment, which we believe will allow us, over time, to fully monetize Newell's portfolio of leading brands. We acknowledge there's still a long way to go, but this is a big first step. Chris and I, along with the rest of the executive leadership team, very much recognize and appreciate the hard work and dedication of the Newell Brands team, and we want to say thank you, we're just getting started. Operator, please open the call for questions. Lauren Lieberman: Great. I want to do a slightly annoying thing and pick on the one thing that didn't really inflect, which was Commercial. So you've gone through a lot of the really positive things on the call, but I want to talk a bit about the Commercial business. Just line of sight into that business improving? Kind of what it takes? Is it innovation? Is it market growth and level of business investment? But curious a bit just to -- on that Commercial division. Christopher Peterson: Yes. Thanks for the question. You're right. The Commercial business improved sequentially but was still negative in the quarter, as you rightly point out. I think we are optimistic in the Commercial business going forward, starting with Q3, that trends are going to continue to sequentially improve. That business, we're focused on bringing new innovation. We are currently launching a revamped BRUTE trash can that is a superior trash can versus what we had previously. We've also launched the line of BRUTE farm products that is getting strong pickup across rural channels. And in that business, which includes the Spontex business in Europe, we launched a very strong innovation on the Spontex brand with the Flex and Go, which is a superior performing sponge product that's about -- positioned from a pricing standpoint, about 100% higher than the base product. All of those initiatives are getting strong consumer and retailer reaction. We think that we're on the right track there. It's just going to take a little bit longer than the other segments to inflect from a positive standpoint. But we believe you're going to see that business inflect in the near term, possibly in the third quarter. Lauren Lieberman: Okay. Fantastic. And then just on -- and I apologize if I missed this because I was looking at a couple of things at once this morning. But just thoughts on Back-to-School season? Sell-in, I'm guessing, is going well, but how much that's falling kind of into 3Q versus 2Q? We've seen some news stories about how much consumers are intending to spend on Back-to-School. So just got any thoughts on Back-to-School season. That would be great too. Christopher Peterson: Yes. Obviously, it's a critical time for Back-to-School. I'd just make a couple of comments. First, we feel very good about the sell-in of Back-to-School. Our fill rates were very strong in terms of the setup of Back-to-School. We also took a slightly different approach this year. Last year, a lot of the stores, we wound up getting set up later than the private label brands last year. And so we got off to a slower start from a POS standpoint at the beginning of the season last year and then we caught up in the middle and end of the session. This year, we didn't want to do that. So we put a concerted effort with merchandising activity to get our brands set up at the very start of the season, and that appears to be working in a strong way. We've got -- the first 3 weeks of POS data, which is effectively the first 3 weeks of July, we get real time. So far in the U.S. business in the first 3 weeks, we have gained market share in each of those 3-week periods, and our POS is tracking right in line with our forecast. It's very early. The first 3 weeks are not the biggest weeks. The biggest weeks are still ahead of us, but we're off to a much stronger start from a consumer offtake trend this year versus last year. And we're excited to see that we're gaining share. The brands that are gaining share out of the gate are Sharpie, Elmer's, Prismacolor, to name a few, where we think we're very well set up going into the season. The -- from a shipment timing standpoint, I don't think there was a huge change in shipment timing between Q2, Q3 that was different than what we expected. I think the shipment timing sort of went according to our plan. And so that was not a factor that drove either Q2 or Q3. And you see that in our guidance where we delivered 2.3% core sales growth, and we're guiding Q3 to be 2% to 3%, which is, as Mark said, at the midpoint, even a little bit higher than Q2. Filippo Falorni: I was wondering if you can give a little bit more color on the shelf space gains in North America? How much contribution you realized there in the quarter? And obviously, if you look at your reported results in organic, North America, very strong. I'm curious internationally also, like what drove the weakness there in the quarter? And could you see more of the shelf space that you realize in North America also in the international business? Christopher Peterson: Yes. So the shelf space gains really are driven by the capabilities that we've put in place. It's the strong new product innovation, the category growth stories, the higher A&P and the stronger service execution that we're delivering to retailers. All of that has come together in a way that allowed us to win line reviews last year as we went into this year's reset season. And as I mentioned in the prepared comments, our level of distribution in the U.S. market is up mid-single digits, and we're seeing that really across a lot of our categories. Because the new product innovation is spread across all 6 business units, and every one of our business units has Tier 1 or 2 innovation. We're seeing distribution gains. It's not every retailer in every category, but in aggregate, our level of distribution is going up. I will say that we're also excited that our consumer offtake has also turned positive in the second quarter. So it's not that this was pipeline shipments. This is really being driven by consumer demand, which is up versus a year ago, and our POS trends are leading the way on this. And so we're excited about that. And we think we've got continued distribution gains that we've secured that are going to come as we move into the back half of the year. On the international business, you're right, the international business was down in the second quarter in total. There were some unique things that happened in the international business, particularly Europe has been a little bit softer with the Middle East spillover in that market, and some consumer pull back in terms of consumer demand. In Latin America, we've had very strong consumer demand, but there were some shipment timing challenge in that business. I do expect that you're going to see international turn more positive and improve sequentially as we go into the third quarter. And so we're confident that the international business is going to come back as we go into the back half of the year here. Mark Erceg: And if I could just add one thing. You may recall that the international business had grown for 6 straight quarters up to the third quarter of last year. And then due to some second and third derivative effects of the tariffs, we saw some very large markets like Brazil stepped down meaningfully. Chris just alluded to it. But as we think about Q3 and going forward, we're confident that the international business is going to come back online. And now that the U.S. business, our largest business, just demonstrated the ability to grow, we're actually really excited about having both of the lead horses pulling in the same direction at the same time. And that turnaround in international is reflective of the same capability build-out that we've been affecting across the domestic markets. Madison Callinan: This is Madison Callinan on for Brian. Congrats on the strong results. Commercial has been weak, but what are the other brands in the top 10 that are still declining in POS? Is there a common reason for any of them? And when are those expected to return to growth? In all, is modest core sales growth now the expectation from here? Christopher Peterson: Yes. So as we mentioned, 7 of the top 10 brands drove core sales growth in the quarter. Of the brands that didn't grow in the quarter, some of it is related to timing of innovation on the brands. So as an example, we grew in Writing, as I mentioned, because Sharpie had a very strong result. We're growing on Elmer's. We're growing on Prismacolor, but Paper Mate, which is one of our top 10 brands, was down in the quarter. We have strong innovation coming on Paper Mate. Because of the timing of that innovation and the timing then of the reset on that brand, that turnaround on that specific brand is a little bit on different timing than the business in total. And so that's typically what you see in the top 10 brands is that because the innovation is set to launch at different timing throughout the year, you can get -- it's unusual to see all top 10 brands growing at the same time, is the way I would answer that. And so what we're trying to do is employ the same playbook from a consumer insights, superior innovation, strong category insights, great retail execution across all of the top 25 brands in the company, which represent 90% of our sales and profit, so that we get the majority of them growing and we grow in total as a company, recognizing that it would be highly unusual for every single one of those brands to be growing in the same quarterly period. But we believe if we can get the majority growing, which we have done in the second quarter, that the company in total can grow sustainably, and that's what we're excited about as we look forward. Mark Erceg: And just to add a little more color. For the brands that are growing, both Graco and Sharpie grew core sales in the second quarter by double digits. Brands like Oster and Coleman were up high single digits. Yankee Candle was up mid-single digits. So the businesses that have leaned further into the capability rebuild are demonstrating meaningful growth. And so we're very confident that the strategy we've been affecting, which is broadening out, will allow us to continue to provide our shareholders with a solid business model that is sustainable. Peter Grom: So I wanted to get some perspective just on the category. You noted a very strong first half, but you sounded a bit more cautious on kind of the path from here. And I'm curious, is that just -- are you simply trying to be conservative? Or is there something you're seeing more real time that's informing that view? Christopher Peterson: Yes. No, I think it's a little bit more just being -- wanting to be a little bit cautious on the category growth. So as I mentioned, we went into the year with an assumption that the category was going to be down 2%. And really, the reason why we did that was because the last couple of years, it had been running at that pace. We wound up down 1 in the first quarter and effectively flat in Q2. And what we're seeing, from a category dynamic standpoint, is that the high-income consumer is still driving significant growth in the general merchandise category, call it mid-single-digit growth. And that's what's leading sort of the growth side. The middle-income consumer is relatively flat to down sort of low single digits. The thing that's interesting in the second quarter is that the low-income consumer, which had been running down more, is now annualizing that. So they seem to be stabilizing and their year-over-year decline is reducing, which is why the category, if you follow me, is -- seems to be doing a little better at roughly flat. As we've gone into the -- as we planned the business for the back half of the year, given all of the moving parts in -- with gas prices, with commodity cost inflation, with -- et cetera, we didn't want to get above our skis on that. There is a case where if the category continues to be flat in the back half of the year, I would expect that we would be -- we would do better than what's embedded in our guidance range as a result of that. We just felt like it was prudent not to get too far ahead of ourselves on the category growth assumption. Peter Grom: That makes a ton of sense. And then I guess just on the pricing discussion, it sounds like you're not choosing to lean into price for a variety of different reasons and kind of using refunds as more of the offset to the impact. And obviously, inflation remains volatile. So curious how we should think about that playbook should inflation persist? And then I guess, related -- I mean, do you have any visibility on how your peers are handling the situation? Christopher Peterson: Yes. So we've taken 2 pricing actions since last week reported earnings that I think we've talked a little bit about. We've priced for resin-oriented products that represent about -- a little bit less than 10% of our total business. And largely, those resin-specific products are in the Commercial business and in the Outdoor & Rec, the Coleman cooler business, which are very resin dependent. Those price increases have now gone into effect on both of those brands. It appears that the industry has moved up because the price spike that we had earlier, and resins was just too high for people to move past. And so we don't believe that we are competitively out of step with what the market has done. With regard to the majority of the business where we have not taken pricing, you're right that what we're doing is we're using the top line growth momentum, coupled with better fuel productivity savings and the in-year part of the tariff refund to effectively offset what is a significantly higher inflationary environment than what we had planned going into the year and also what we had thought 3 months ago when we reported last quarter. Part of that is because we also think that some of this inflation might be peak inflation. We're already starting to see resin prices roll down a little bit. And so as Mark said appropriately in his remarks, what we don't want to do is price for peak inflation and then have to take the pricing back. We're trying to sort of navigate through this in a way that's compelling. I do think that our fuel productivity program is a huge competitive advantage, and we are hitting it out of the park. We're running way ahead of plan in terms of productivity savings that the fuel team is delivering this year. And I think that's going to position us from a consumer value standpoint in a much more competitive way versus our competitive set. So we're pretty optimistic that the combination of our tariff-advantaged manufacturing footprint that we've talked about, coupled with this fuel productivity program, is going to position our brands now to have superior innovation, but also at compelling consumer values, which we think is going to lead to continued market share gains and top line growth. Olivia Tong Cheang: Great. Now that you've secured the refunds, can you talk about the deployment of those funds and reinvestment opportunities going forward? And what's been embedded into the outlook and how you think about not only this year, but past the -- into the next 12 months? And then I don't know if you said it, but was there any benefit to this quarter from the pull forward of Prime Day into Q2 and -- and then I have a follow-up. Mark Erceg: I'll take the first question and then Chris can comment on the second. So we were very clear in making sure that the entirety of the 2025 tariff refund values were passed through 1 for 1 into our current year guidance, and that's what you saw, right? Because it was $100 million, which was $76 million after tax, which was $0.17, and that's what we took up the low and the high end of our guidance range by. There were some additional in-period refund amounts that we spoke to, and there was $26 million that, related to the IEEPA tariffs that were in Q1 of '26 that we obviously got effectively refunded to us. But those are all in year in period items, just like the fact that the inflationary environment went from $100 million at the start of the year to $200 million, and we had to contend with all of that. The other thing I would point out is that on an underlying basis, our tariff exposure year-over-year, last year was about $115 million on a P&L basis. This year, it's $127 million, if you just strip out all of the noise, right? So the tariffs themselves still are a pressure point in the current year. We've dealt with that by doing a number of things. Chris alluded to the fuel productivity program, which is kind of our secret weapon. That team continues to do amazing things. I mean they have been literally taking out mid-single-digit COGS as a percent of sales each and every year for the past several years. We have 47 sites now that are active in the PEAK program. That's up from 39 at the end of last year. So effectively, what that means is over 90% of our targeted sites are enrolled in the program. So that's the exciting thing. And then you might say, well, gee, if 90% of them are already enrolled, have you already got all those -- the juice out from the squeeze? And the answer is no, because of those 47 sites, 16 are in the foundation stage, 9 are at base camp, 15 are at Climb 1 and only 7 are at Climb 2, right? So as you move along the continuum, you get more and more efficient, more and more savings is derived. And so this is going to be something that is a capability set that we have uniquely developed here at Newell, which is operating at world-class levels, which is going to allow us to continue to do exceptionally well. And then I guess the last thing I would say just so that there's no confusion at all. If you look at the $0.42 we delivered in the second quarter, if you back out the $0.17 that related to the 2025 portion of the IEEPA tariff refund, that would bring you from $0.42 minus $0.17 down to $0.25. And then if you took out the first quarter piece, which is again out of period, that's another $0.04, that would take you from $0.25 basically down to $0.21, and we guided to $0.16 to $0.19. And the reason we were able to beat and exceed was because of the fuel productivity program, because of the incremental sales gains. So we feel really good about where we are, and we guided to a Q3 that at the midpoint, has sequential growth. We talked about the fact that this is broadening out and it should be across both the U.S. and the international markets. And then if you do one final thing and look at our op margin guidance for the full year, which was 10% to 10.4%, if you strip out the elements of the refund related to 2025, which are all the out-of-period elements, right? Our guide would basically have us at 8.6% to 9%, right, on an op margin basis, with the midpoint being 8.8%, which basically means that's about a 50 basis point improvement from 25, right? So our algorithm, our financial algorithm that we've laid out, we continue to deliver against that consistently despite massive volatility in the marketplace. And once all this starts to normalize, I think you're going to see really good things start to happen. Christopher Peterson: Just the 2 other questions that you asked, Amazon Prime Day, which moved from an execution standpoint from July last year to June this year, did have an impact on POS results, but did not have an impact -- material impact on shipments because we typically ship the inventory to Amazon in advance of the execution. So there was not a material change in our shipment patterns as a result of the Prime Day move, just to clean that one up. And then I think on your other question on what does this mean going forward as we think for next year, obviously, we're not in a position to guide for 2027 at this point. But I think the reason why we wanted to call out specifically the $100 million or the $0.17 a share that was related to '25 as being out of period is we think that, that portion of the tariff refund is not repeatable as we go into '27. We think all of the stuff that has happened in year this year, we do think it of as a base that we're going to grow from as we go into next year. Olivia Tong Cheang: Great. That's super helpful. Just following up a bit on promotion and price mix. You said pricing won't be able to offset inflation this year, totally understandable. But sort of looking at a different way. There's a lot of newness, but you also have a pretty tough consumer backdrop. And given that Back-to-School and holiday in the second half, can you talk about your level of confidence that you can hold the pricing and promo plans, especially given the level of competition that's out there right now? Christopher Peterson: Yes. I think we feel pretty good about that. And again, it's because we're not taking broad-based pricing. The 2 areas where we've taken pricing that represent, as I mentioned, less than 10% of our business. We've seen the whole industry move up. Interestingly, in some of our other businesses, we've seen competition price, and we have not, because we've got the U.S. manufacturing footprint and we've got this fuel productivity program that we've talked about. And so I think we're pretty well set up and well positioned from a consumer value standpoint heading into the Back-to-School and heading into the holiday season. By the way, we are -- I should mention, we are monitoring the inflation environment. Inflation has moved, as Mark said, from -- when we came into this year, $100 million headwind to a $200 million headwind, which is a big increase. We're pretty excited that we've been able to offset that without having to take significant pricing, but that's affecting not just us, it's affecting the whole industry. We are monitoring that. And if the situation continues or gets worse, we may choose to enact future pricing. But as we sit here today, we don't have anything imminent that we think we need to do to deliver the plan and the guide, assuming that the current macro environment sort of holds where it is. Andrea Teixeira: I want to pick up from Chris with what you just said about pricing. Do you see conversely any pressure to potentially having to give back some of the tariff benefit? Or, if you will? I mean, obviously, Mark has just pointed out that you're still higher year-over-year. But just to see some affordability improvement, we have heard some of your key customers taking some promo ahead of even the manufacturers themselves. I mean that was more, I think, on the grocery side. But just thinking ahead if -- as you're looking to this innovation, obviously, you have this 21 -- 29, sorry, Tier 1, Tier 2 innovations, should we be thinking the innovation is coming in at a higher price level and higher margin? And if you have to reinvest in some of the initial price points, that would be great. Christopher Peterson: Yes. So let me start with the innovation point. So we are, as you know, from the strategy that we put in place 3 years ago, where we decided that we were going to completely revamp the way we do new product innovation, we put in the tiering system, we moved to consumer-led innovation and completely rebuilt the consumer insights function to make the innovation much stronger. One of the choices we also made was to focus that innovation more at the middle and higher price points within the category. And I would say the majority of the innovation that we're launching is focused at the mid-tier with some pockets at the upper tier. And the reason why we chose to do that and not focus on the opening price point is that we felt like if we were going to bring innovation and invest in innovation, we wanted to get paid for it. It turned out to be a good choice for more than we thought at the time. When we made that choice, we did it thinking that innovation should drive category growth. And in order to drive category growth, you really needed to focus on the mid-tier and the sort of the lower part of the premium tier. What we're seeing in the market today is that the mid and the premium tier parts of the market are actually growing faster than the opening price point part of the market. And the reason for that is because the high-income consumer is the one driving all of the growth in general merchandise. And so we think we're doubly benefited from that. Just because the innovation is coming at the mid-price point or the lower end of the upper part of the tier does not mean that it can't be a great consumer value. We are focused on making sure that the innovation is a great consumer value, which is why we're focused on all of the productivity savings to be able to offset the inflationary impact. I don't believe that we're going to need to price that innovation down because we're seeing very strong consumer response to it so far. The other thing I would say is as we launch that innovation, it is giving us a mix benefit on the top line as well as sort of another thing that's happening within the P&L. And then on your point relative to the tariff refunds, I think I mentioned in the prepared comments that if you look at the new tariff cost this year from the new tariff regime plus the tariff refunds, plus the inflation all in and say what was the total input cost picture for Newell this year, inclusive of all tariff refunds even from the prior year from Q1, et cetera, it is still a headwind this year. And so it's not like we're in a situation where we have some sort of input costs going down. Input costs are going up because the inflationary impact is more than the tariff help. And so we think we're being prudent in terms of how we're planning that, and we think we're actually likely -- because we're not planning to take broad-based pricing likely to be well positioned, as I mentioned earlier, in the back half of the year. Operator: Thank you. This concludes today's conference call. Thank you for your participation. A replay of today's call will be available later today on the company's website at ir.newellbrands.com. You may now disconnect. Have a great day. Before you buy stock in Newell Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Newell Brands wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Newell Brands (NWL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Newell Brands (NWL) came out with quarterly earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +121.05%. A quarter ago, it was expected that this consumer products company would post a loss of $0.09 per share when it actually produced a loss of $0.05, delivering a surprise of +44.44%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Newell Brands, which belongs to the Zacks Consumer Products - Staples industry, posted revenues of $1.99 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.28%. This compares to year-ago revenues of $1.94 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Newell Brands shares have added about 38.2% since the beginning of the year versus the S&P 500's gain of 8.7%. While Newell Brands has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Newell Brands was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.19 on $1.83 billion in revenues for the coming quarter and $0.57 on $7.27 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consumer Products - Staples is currently in the bottom 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, National Vision (EYE), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This discount optical retailer and eye care provider is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of -5.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. National Vision's revenues are expected to be $492.1 million, up 1.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newell Brands Inc. (NWL) : Free Stock Analysis Report National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Newell Brands (NWL) reported $1.99 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 3.1%. EPS of $0.42 for the same period compares to $0.24 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $1.97 billion, representing a surprise of +1.28%. The company delivered an EPS surprise of +121.05%, with the consensus EPS estimate being $0.19. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Newell Brands performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net sales- Learning and Development: $851 million versus the four-analyst average estimate of $828.12 million. The reported number represents a year-over-year change of +5.2%. Net sales- Outdoor and Recreation: $240 million versus $240.27 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +2.6% change. Net sales- Home and Commercial Solutions: $903 million versus the four-analyst average estimate of $900.6 million. The reported number represents a year-over-year change of +1.2%. Normalized Operating Income (Loss)- Corporate: $-67 million compared to the $-55.02 million average estimate based on two analysts. Normalized Operating Income (Loss)- Outdoor and Recreation: $9 million versus $15.92 million estimated by two analysts on average. Normalized Operating Income (Loss)- Learning & Development: $314 million versus the two-analyst average estimate of $204.43 million. Normalized Operating Income (Loss)- Home and Commercial Solutions: $68 million versus the two-analyst average estimate of $40.2 million. View all Key Company Metrics for Newell Brands here>>> Shares of Newell Brands have returned -11.8% over the past month versus the Zacks S&P 500 composite's -0.5% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newell Brands Inc. (NWL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Newell Brands Inc. NWL reported second-quarter 2026 results, with both top and bottom lines improving from the prior-year period. Both metrics exceeded the Zacks Consensus Estimate. The company posted normalized earnings of 42 cents per share, up 75% from 24 cents a year ago. The figure surpassed the Zacks Consensus Estimate of 19 cents by 31.6%. Newell Brands Inc. price-consensus-eps-surprise-chart | Newell Brands Inc. Quote Net sales increased 3% year over year to $1,994 million from $1,935 million, exceeding the Zacks Consensus Estimate of $1,969 million. The quarter benefited from broad-based sales growth across the portfolio, improved manufacturing efficiencies, tariff-related recoveries and continued cost discipline. These gains more than offset higher commodity and freight costs. Core sales increased 2.3%, marking the company's first year-over-year increase in both reported and core sales in more than four years. Normalized gross profit increased to $813 million from $688 million in the prior-year period, while normalized gross margin expanded to 40.8% from 35.6%. Margin improvement was driven by approximately $100 million in pretax recoveries associated with IEEPA tariffs recognized in 2025, approximately $26 million related to IEEPA tariffs recognized in the first quarter of 2026, stronger sales and productivity initiatives, which more than compensated for inflationary cost pressures. Normalized selling, general and administrative expenses reached $489 million, increasing 1.9% year over year from $480 million. Normalized EBITDA increased 45% to $406 million from $280 million. Normalized operating income climbed 55.8% year over year to $324 million from $208 million, while normalized operating margin expanded to 16.2% from 10.7%. Improved gross profitability more than offset higher advertising and promotional investments during the quarter. Home & Commercial Solutions generated sales of $903 million, up 1.2% from $892 million. The figure exceeded the Zacks Consensus Estimate of $901 million. Core sales declined 0.4% as strength in the Kitchen and Home Fragrance businesses was more than offset by weaker Commercial demand. Normalized operating income increased to $68 million from $44 million in the prior-year period, surpassing the Zacks Consensus Estimate of $40.2 million. Normalized operating margin expanded to 7.5% from 4.9%. Learning & Development sales advanced 5.2% year over year to $851 million from $809 million, exceeding the Zacks Consensus Estimate of $828 million. Growth was supported by solid performance in the Baby and Writing businesses. Core sales increased 4.9%. Normalized operating income surged to $314 million from $207 million, ahead of the Zacks Consensus Estimate of $204 million. Normalized operating margin improved to 36.9% from 25.6%. Outdoor & Recreation sales increased 2.6% year over year to $240 million from $234 million, in line with the Zacks Consensus Estimate. Core sales grew 3.7%. Normalized operating income declined to $9 million from $13 million and missed the Zacks Consensus Estimate of $15.9 million. Normalized operating margin narrowed to 3.8% from 5.6%. The Corporate segment reported a normalized operating loss of $67 million compared with $56 million in the year-ago period. The reported figure was wider than the Zacks Consensus Estimate of $55 million. North America reported sales growth of 4.4%, while core sales increased 4.9% during the quarter. International reported sales edged up 0.3%, although core sales declined 2.7% after adjusting for foreign currency movements, divestitures and other items. NWL ended the quarter with cash and cash equivalents of $209 million compared with $219 million a year earlier. Long-term debt totaled $4,536 million, while net debt stood at $4,797 million. Shareholders' equity was $2,451 million at quarter-end. For the third quarter of 2026, Newell expects net sales and core sales to grow 2-3%. Normalized operating margin is projected to be between 9.5% and 10.2%, while normalized earnings are expected to be in the range of 18-20 cents per share. For fiscal 2026, the company now expects net sales growth of 1-2% compared with its previous outlook of flat to 2%. Core sales are projected to range from flat to up 1% compared with the earlier expectation of a 1% decline to 1% growth. Normalized operating margin is now expected to be between 10% and 10.4% compared with the previous guidance of 8.6%-9.2%. The company also raised its normalized earnings outlook to 73-77 cents per share from the earlier forecast of 56-60 cents. In addition, it increased its operating cash flow projection to approximately $400 million, assuming that substantially all IEEPA tariff recoveries are received before year-end while incorporating the latest inflation assumptions. In the past six months, this Zacks Rank #2 (Buy) company’s shares have rallied 18.4% against the industry’s 2.1% decline. Image Source: Zacks Investment Research Some other top-ranked stocks have been discussed below: WD-40 Company WDFC engages in the provision of maintenance products and homecare and cleaning products in North America, Central and South America, Asia, Australia, Europe, India, the Middle East, and Africa. At present, WDFC carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks Consensus Estimate for WDFC’s current fiscal-year sales earnings suggests growth of 9.9% and 7.2%, respectively, from the year-ago reported figures. WDFC reported a trailing four-quarter average earnings surprise of 18.3%. BBB Foods Inc. TBBB provides spot products comprising food and non-food products, such as clothing, electronics, household goods, and others. At present, TBBB carries a Zacks Rank of 2. The Zacks Consensus Estimate for TBBB’s current fiscal-year sales earnings implies growth of 44.6% and 52.7%, respectively, from the year-ago reported figures. TBBB delivered a trailing four-quarter negative earnings surprise of 98.9%, on average. Ryohin Keikaku Co., Ltd. RYKKY engages in the retail of household goods and food items in Japan and internationally. RYKKY currently carries a Zacks Rank #2. The Zacks Consensus Estimate for RYKKY's current fiscal-year sales and earnings implies growth of 6.9% and 8.3%, respectively, from the year-ago actuals. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newell Brands Inc. (NWL) : Free Stock Analysis Report WD-40 Company (WDFC) : Free Stock Analysis Report BBB Foods Inc. (TBBB) : Free Stock Analysis Report Ryohin Keikaku Co. Ltd. (RYKKY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Newell Brands Inc. NWL is expected to register a year-over-year increase in the top line when it reports second-quarter 2026 results on July 31, 2026, before the opening bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $2 billion, indicating a rise of 1.7% from the figure reported in the year-ago quarter.The consensus estimate for the bottom line is pegged at 19 cents per share, which indicates a decline of 20.8% from the year-ago quarter. The consensus mark has been stable in the past 30 days. In the last reported quarter, the Atlanta, GA-based company’s earnings surpassed the Zacks Consensus Estimate by 44.4%. Its bottom line beat the consensus estimate by 9.7%, on average, in the trailing four quarters. Newell’s top-line performance is likely to have reflected gains from front-end commercial capabilities, mainly innovation and new business development, coupled with a more streamlined organizational structure. On the operational front, productivity initiatives, restructuring actions and supply-chain efficiencies are expected to have provided partial offsets to cost pressures.Newell is focused on disciplined pricing and revenue management by improving customer program efficiency, optimizing promotional spending and implementing targeted pricing actions. It also continues to drive productivity through restructuring initiatives, supply-chain optimization and disciplined cost management to offset inflationary pressures and support margin expansion.Newell has been strengthening its growth strategy by expanding its pipeline of consumer-focused innovations across its portfolio. The company plans to introduce more high-impact product launches in 2026, supported by greater advertising and retail activation, to drive consumer demand, improve market share and create additional distribution opportunities. Such endeavors are likely to have aided its top line in the to-be-reported quarter. On its last earnings call, management had expected both net sales and core sales to be flat to up 2% each for the second quarter. Our model expects sales growth of 1.2% year over year and a core sales rise of 0.6% for the second quarter. We anticipate core sales growth of 0.5% each for the Home & Commercial Solutions and Learning and Development segments, and 1% for the Outdoor and Recreation segment in the to-be-reported quarter.On the flip side, Newell continues to witness a volatile operating backdrop, along with soft consumer demand, elevated tariffs and commodity cost inflation. Higher raw material and freight expenses are likely to have acted as a major headwind in the quarter under review. Rising resin prices and elevated transportation costs with higher oil prices are likely to have increased operating costs and pressured margins. Management, in its last earnings call, had envisioned normalized operating margin of 9.6-10.2% and normalized earnings per share (EPS) of 16-19 cents for the second quarter. We expect normalized operating margin of 9.7%, and normalized EPS of 18 cents for the quarter under review. Newell Brands Inc. price-eps-surprise | Newell Brands Inc. Quote Our proven model conclusively predicts an earnings beat for Newell this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.Newell currently has an Earnings ESP of +5.36% and a Zacks Rank of 2. You can uncover the best stocks before they are reported with our Earnings ESP Filter. From a valuation perspective, Newell offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 8.41x, which is below the five-year high of 15.23x and the Consumer Products - Staples industry’s average of 18.23x, the stock offers compelling value for investors seeking exposure to the sector.The recent market movements show that NWL’s shares have gained 17.8% in the past six months against the industry's 0.6% drop. Here are some other companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.Fomento Económico Mexicano, S.A.B. de C.V. FMX has an Earnings ESP of +37.42% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is expected to register bottom and top-line increases when it reports second-quarter 2026 numbers. The Zacks Consensus Estimate for FMX’s quarterly bottom line has dipped 10.9% in the past 30 days to 82 cents per share. The consensus mark for earnings indicates an improvement of 95.2% from the figure reported in the year-ago quarter. The consensus estimate for quarterly revenues is pegged at $12.9 billion, which indicates a rise of 19.3% from the figure reported in the year-ago quarter. FMX has delivered a negative earnings surprise of 17%, on average, in the trailing four quarters.Monster Beverage Corporation MNST currently has an Earnings ESP of +2.61% and a Zacks Rank of 3. The company is likely to register a bottom and top-line growth when it reports second-quarter 2026 numbers. The Zacks Consensus Estimate for Monster Beverage’s quarterly revenues is pegged at $2.4 billion, indicating an increase of 14.5% from the figure reported in the prior-year quarter. The consensus estimate for MNST’s quarterly earnings of 59 cents per share implies a rise of 13.5% from the year-ago quarter’s level. MNST has a trailing four-quarter earnings surprise of 9.6%, on average.Coty COTY has an Earnings ESP of +0.03% and a Zacks Rank of 3 at present. The company is expected to register a top-line decline when it reports fourth-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for COTY’s quarterly bottom line has remained unchanged in the past 30 days at a loss of a cent per share. The consensus mark for earnings indicates an improvement of 80% from the figure reported in the year-ago quarter. The consensus estimate for quarterly revenues is pegged at $1.2 billion, which indicates a drop of 4.8% from the figure reported in the year-ago quarter. COTY has delivered a negative earnings surprise of 214.1%, on average, in the trailing four quarters. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newell Brands Inc. (NWL) : Free Stock Analysis Report Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report Monster Beverage Corporation (MNST) : Free Stock Analysis Report Coty (COTY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Newell Brands (NWL) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 31. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This consumer products company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of -20.8%. Revenues are expected to be $1.97 billion, up 1.7% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.02% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Newell Brands, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +5.36%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination indicates that Newell Brands will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Newell Brands would post a loss of$0.09 per share when it actually produced a loss of -$0.05, delivering a surprise of +44.44%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Newell Brands appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newell Brands Inc. (NWL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

WD-40 (WDFC) came out with quarterly earnings of $2.33 per share, beating the Zacks Consensus Estimate of $1.58 per share. This compares to earnings of $1.54 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +47.47%. A quarter ago, it was expected that this maintenance and cleaning product company would post earnings of $1.39 per share when it actually produced earnings of $1.5, delivering a surprise of +7.91%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. WD-40, which belongs to the Zacks Consumer Products - Staples industry, posted revenues of $195.12 million for the quarter ended May 2026, surpassing the Zacks Consensus Estimate by 13.57%. This compares to year-ago revenues of $156.91 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. WD-40 shares have added about 25.2% since the beginning of the year versus the S&P 500's gain of 9.3%. While WD-40 has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for WD-40 was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.62 on $173.1 million in revenues for the coming quarter and $5.99 on $655 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consumer Products - Staples is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Newell Brands (NWL), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on July 31. This consumer products company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of -20.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Newell Brands' revenues are expected to be $1.96 billion, up 1.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WD-40 Company (WDFC) : Free Stock Analysis Report Newell Brands Inc. (NWL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

A month has gone by since the last earnings report for Grocery Outlet Holding Corp. (GO). Shares have added about 22.8% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Grocery Outlet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers. Grocery Outlet Holding Corp. reported first-quarter 2026 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. While net sales increased year over year, earnings declined from the year-ago period. Results reflected improving traffic trends and progress in restoring the company’s opportunistic product mix, though comparable-store sales remained soft amid continued pressure on customer basket sizes. Adjusted EBITDA came in at the high end of management’s guidance range, and management reaffirmed the fiscal 2026 outlook despite ongoing margin and basket-size pressures. Grocery Outlet delivered adjusted earnings of 5 cents a share for the first quarter of fiscal 2026, beating the Zacks Consensus Estimate of 2 cents by 150%. The figure declined from adjusted earnings of 13 cents reported in the year-ago quarter.Net sales increased 3.6% year over year to $1,166.4 million and edged past the consensus mark of $1,153 million by 1.2%. The increase was primarily driven by contributions from new store openings, partially offset by lower comparable-store sales.Comparable-store sales declined 1% in the quarter compared to growth of 0.3% in the prior-year period. The drop stemmed from a 3.1% decrease in average transaction size, partly offset by a 2.1% increase in the number of transactions. Management noted that traffic trends improved sequentially throughout the quarter, with weekly traffic growth in March ranging between 2% and 5%.Management highlighted meaningful progress in increasing the mix of opportunistic products, which rose by nearly 2 percentage points since the start of the year. Grocery Outlet stated that these higher-value branded deals continue to resonate strongly with customers and support traffic recovery. Gross profit increased modestly to $345.2 million from $342.4 million in the year-ago quarter. However, gross margin contracted 80 basis points year over year to 29.6%. Management attributed 50 basis points of the decline to inventory markdowns and write-offs to store closures under the Optimization Plan, along with promotional investments aimed at driving traffic and restoring value perception, partly offset by improvements in inventory management.Selling, general and administrative expenses rose 4.8% year over year to $347 million. As a percentage of net sales, SG&A expenses increased 40 basis points to 29.8%, primarily due to higher professional fees, commissions and growth-related expenses, partly offset by lower incentive compensation.Adjusted EBITDA declined 16.9% year over year to $43.1 million. Adjusted EBITDA margin contracted 90 basis points to 3.7% of net sales.The company posted an operating loss of $178 million, including a non-cash goodwill impairment charge of $158 million and restructuring charges of $18.2 million related to store optimization actions. Net loss came in at $180.3 million, or $1.83 per share, compared with a net loss of $23.3 million, or 24 cents per share, in the prior-year quarter. Grocery Outlet opened seven new stores and closed 28 stores during the quarter, including 27 closures related to its Optimization Plan, ending the period with 549 stores across 16 states.Under the Optimization Plan, Grocery Outlet is closing 36 financially underperforming stores to improve long-term profitability, cash flow generation and store-fleet productivity. The company completed 27 of these closures during the first quarter and closed the remaining nine stores in April.Management also continues to take a more disciplined approach to new store growth, focusing on stronger site selection, core markets and higher return thresholds. For fiscal 2026, Grocery Outlet continues to expect 30-33 net new store openings, excluding closures tied to the Optimization Plan. Grocery Outlet ended the quarter with cash and cash equivalents of $59 million compared with $69.6 million at fiscal 2025-end. Long-term debt totaled $474.3 million, while stockholders’ equity stood at $807.1 million.The company generated $52.6 million in operating cash flow during the quarter compared with $58.9 million in the prior-year period. Capital expenditures, net of tenant improvement allowances, were $53.9 million.Management reiterated that it expects fiscal 2026 capital expenditures of about $170 million, net of tenant improvement allowances. Management reaffirmed its fiscal 2026 outlook, signaling confidence in the year’s execution priorities despite a choppy consumer environment. The company continues to expect net sales of $4.60-$4.72 billion, with comparable store sales ranging from flat to down 2%.For profitability, Grocery Outlet still anticipates a gross margin of 29.7%-30% and adjusted EBITDA of $220-$235 million. The company also maintained adjusted earnings per share guidance of 45-55 cents a share.For the second quarter, management expects comparable-store sales to decline between 1.5% and 2%, including an estimated 50-basis-point headwind from the Easter calendar shift. Gross margin is projected between 29.8% and 30%, while adjusted EBITDA is expected between $55 million and $58 million. Adjusted earnings per share are anticipated in the range of 11-13 cents. In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -23.61% due to these changes. Currently, Grocery Outlet has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of B on the value side, putting it in the second quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Grocery Outlet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Grocery Outlet is part of the Zacks Consumer Products - Staples industry. Over the past month, Newell Brands (NWL), a stock from the same industry, has gained 17%. The company reported its results for the quarter ended March 2026 more than a month ago. Newell Brands reported revenues of $1.55 billion in the last reported quarter, representing a year-over-year change of -1.1%. EPS of -$0.05 for the same period compares with -$0.01 a year ago. Newell Brands is expected to post earnings of $0.19 per share for the current quarter, representing a year-over-year change of -20.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%. Newell Brands has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report Newell Brands Inc. (NWL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Friday, May 1, 2026 at 7:30 a.m. ET Chief Executive Officer — Christopher Peterson Chief Financial Officer — Mark Erceg Christopher Peterson: Thank you, Joanne. Good morning, everyone, and welcome to our first quarter earnings call. We had a strong start to the year with Q1 results ahead of expectations across all key financial metrics. All 3 segments delivered core sales growth above plan, with the Learning & Development segment returning to core sales growth. Core sales at minus 3.5% improved both sequentially and versus a year ago for 2 primary reasons. First, we experienced better-than-expected consumer demand for our products driven by improving point-of-sale and market share trends, which we believe is directly related to our focus on innovation and higher levels of advertising and promotion support. Stronger consumer demand was most pronounced across the U.S. brand portfolio, where 6 of our top 10 brands gained market share in the first quarter. In addition, for the first time in over 4 years, 6 of our top 10 brands delivered year-over-year point-of-sale growth and 7 top 10 brands improved their sequential trajectory versus the fourth quarter. These notable proof points provide clear evidence that our new innovation strategy and heightened levels of A&P investments are having the desired effect, namely allowing Newell to once again engage and delight consumers with high-quality products that deliver real solutions and benefits with strong consumer value. As we discussed at CAGNY, 2026 is the first year since we initiated our turnaround strategy that we have a robust consumer-relevant innovation pipeline supported by competitive A&P levels and strong retail activation plans. During the course of the year, we plan to launch 25 Tier 1 and Tier 2 innovations, up from 18 last year, and those innovations span every one of our businesses. Importantly, we are now bringing to market fully vetted consumer-preferred ideas that are designed to improve value, expand usage occasions and give retailers more reasons to support our brands. Those efforts are translating into better point-of-sale results, improved share trends and stronger distribution opportunities. The second reason, first quarter core sales came in better than expected was a net pricing benefit related to customer programs due to better claims experience and improved deduction management. Our focus on improving the return on investment of our customer spending and improving operational discipline and spend management is paying off. These 2 items, which led to top line overdelivery, drove normalized operating margin above our outlook even after increasing A&P investment compared to prior year. Normalized earnings per share came in $0.03 better than the upper end of our guidance range due to higher-than-expected core sales, better-than-expected normalized operating margin and a lower-than-expected first quarter effective tax rate. From a segment perspective, Learning & Development was the strongest part of the portfolio in the quarter. The segment returned to core sales growth led by Baby, which grew 4.9% in the first quarter, supported by strong consumer demand, positive POS trends, innovation and share gains. Both Home & Commercial and Outdoor & Recreation exceeded plan and improved sequentially. Based on these solid first quarter results, we remain confident that Newell's strategy is working. At the same time, the external environment remains dynamic, particularly as it relates to petro-based cost inputs and tariffs. So let's spend some time on each of those 2 important areas. Currently, we see an additional approximately $50 million of commodity and transportation inflation versus our original plan with higher resin costs accounting for about 60% of the total increase. That said, unfortunately, resin is now a much smaller part of Newell's overall cost structure. For perspective, direct resin purchases represent roughly 5% of 2025's total cost of goods sold, which is down materially from about double that level historically. And our sourcing and supply chain teams manage our resin exposure through established contract structures rather than spot market purchases. This provides better visibility, reduces exposure to short-term spot market volatility and creates some lag time in how costs flow through the P&L, which gives the business more time to respond. Moving to tariffs. The framework has shifted materially since our last call. IEEPA tariffs were invalidated. New tariffs under Section 122 were put in place at a temporary 10% replacement rate. Existing tariffs under Section 232 were revised and new Section 301 investigations are now underway for potential new tariffs. The tariff environment clearly remains very fluid with a few important things to note. First, our initial outlook assumed a higher tariff baseline. So the current tariff regime is actually a help versus our going-in expectations. In fact, we believe tariff help will offset about 50% of the previously mentioned incremental commodity hurt with the remainder being offset by higher levels of productivity savings and targeted price and promotion adjustments where necessary. Second, the best-in-class sourcing, manufacturing and trade capabilities we have built over the past several years have positioned us well on a relative basis versus competition. For example, we have reduced China-sourced finished goods from a peak of roughly 35% of global cost of goods sold to under 10% and our remaining China exposure, principally in Baby gear, is an industry-wide challenge, not one unique to Newell. In addition, our highly automated domestic manufacturing footprint creates what we believe is a structural tariff cost advantage across 19 product categories. Third, and before moving on, I want to recognize Newell's Trade Expertise Center, TEC, as we call it, is a highly professionalized centralized capability that brings together trade compliance, policy intelligence, analytics and operational execution to ensure Newell stays compliant, keeps goods moving seamlessly across borders and responds quickly and efficiently as trade policy changes. To close out this section, please note that we will actively pursue tariff refunds related to approximately $120 million of IEEPA tariffs paid in 2025 and neither our Q1 actuals nor our outlook include any benefit from these potential refunds. Having touched on first quarter performance and what we are seeing and expect relative to commodity cost and tariff impacts, I want to turn to the overall Consumer & Category Environment and how we see our top line growth prospects for the balance of the year. Consumer spending in the categories in which Newell competes came in slightly better than we expected in the first quarter at down 1%. We continue to see category growth from high-income consumer cohort being slightly more than offset by declines from low-income consumers. Additionally, it appears the tax refund stimulus boost is largely offsetting higher fuel and energy costs so far. Importantly, consumers are still responding when the value proposition is clear. When innovation solves a need, trusted brands are well supported, price and value are appropriately balanced and retail execution is strong. Coming into the year, we assumed our categories in aggregate would decline about 2 percentage points. However, based on what we saw in the first quarter, we're now assuming a 1.5% category decline for the full year. This slight improvement in underlying consumer and category dynamics when coupled with better-than-expected first quarter results and what we know about the strength of our innovation, marketing and distribution plans for the balance of the year puts us in a position to predict a return to top line growth in the second quarter. Additionally, given the stronger-than-expected first quarter results and our second quarter outlook for core sales growth, we are also raising our full year outlook for net sales, core sales and normalized earnings per share. Before closing, I want to thank all of the Newell employees for their dedication to the turnaround effort and their agility and resilience in dealing with a dynamic operating environment. With that, I'll turn the call over to Mark to walk through the financials and outlook in more detail. Mark Erceg: Thanks, Chris. Good morning, everyone. First quarter 2026 net and core sales declined versus a year ago by 1.1% and 3.5%, respectively, with 2.7 points of favorable foreign exchange and 0.3 points of exits and other impacts accounting for the difference between net and core. Normalized gross margin in the first quarter expanded by 70 basis points to 33.2%. Gross productivity and favorable net pricing actions more than offset cost inflation, tariff costs and lower volume. Normalized overhead dollars were slightly lower year-over-year as we continue to execute against the previously announced global productivity plan. During Q1, we recorded $6 million of restructuring charges, bringing cumulative charges under the plan to $46 million. We continue to expect total restructuring and restructuring-related charges associated with the plan of approximately $75 million to $90 million, the rest of which should be largely incurred by the end of 2026. As expected, A&P as a percentage of sales was just north of 5%, which was about 30 basis points higher than a year ago as we continue to invest behind the strongest innovation program Newell has fielded since at least the Jarden acquisition. All of this brought Newell's normalized operating margin in at 4.8%, which was 30 basis points above a year ago and ahead of our expectations. As Chris indicated, we did record approximately $25 million of net pricing benefit, which flowed through the balance of our first quarter P&L due to a refinement of estimates related to customer programs, reflecting better claims experience and improved deduction management. This benefit contributed about 160 basis points to core sales growth and about 110 basis points to our gross margin rate for the quarter. In English, this means that the work we have been doing to generate a better return on our annual invoice to net investment in the U.S. of roughly $1 billion is starting to pay off. That work began several years ago with Ovid, which consolidated 23 separate U.S.-based legal entities into one go-to-market organization. It has subsequently continued with the implementation of a customer trade fund management system and improved deduction management software. Going forward, we will continue to strive to improve the return characteristics of our customer programs, which may actually result in more trade fund dollars being invested, but in a more efficient and optimal manner than in the past. Net interest expense of $84 million represented an increase of $12 million from the prior year, and we reported a 0 normalized effective tax rate on the quarter. The combination of all these factors resulted in a normalized $0.05 loss on diluted earnings per share, which was ahead of the guidance we provided during our last earnings call. From a cash standpoint, operating cash was an outflow of $233 million versus an operating cash outflow of $213 million in the year ago period. Please note that Q1 historically is always the smallest quarter of the year due to seasonality, so this cash performance is not unusual or unexpected. Our net leverage ratio for the quarter was approximately 5.4x based on net debt of $4.8 billion and trailing 12-month normalized EBITDA of $881 million. This compares to approximately 5.3x in Q1 of 2025 when we had $4.7 billion of net debt and $884 million trailing 12-month normalized EBITDA. Having covered first quarter results and before providing our full year and second quarter outlook, let's take a few minutes to discuss commodity costs and tariff impacts in a bit more detail. Following the start of Operation Epic Fury, oil, using WTI as the benchmark, increased from a pre-conflict average of about $60 to $65 a barrel to a peak of $113 before retrenching slightly. This directly impacts Newell in 2 ways. As indicated earlier, resin purchases represented about 5% of 2025 total company cost of goods sold and the price of polyethylene and polypropylene are directly tied to the price of oil. Using polyethylene as an example, because it represents more than 50% of our total resin use, the average price we paid during the first quarter was very comparable to the prior year. However, for the balance of the year, we are currently assuming the cost per pound will be up about 40% versus a year ago and about 40% higher than what we paid during the first quarter of 2026. The second way the price of oil directly impacts Newell is inbound and outbound freight, which represents about 3% of 2025 total company cost of goods sold. In this case, the average price of a gallon of diesel during the first quarter of 2026 was about $4, which was up a modest 3% versus a year ago. That has changed rapidly, of course, and we are now assuming diesel will average about $5 per gallon for the balance of the year with the price peaking during Q2 before gradually tapering off throughout the second half of the year. Because resin is an input component that gets converted into finished goods and is subsequently inventoriable, the incremental P&L impact is expected to be weighted more towards the back half of the year, whereas since diesel and bunker fuel is essentially expensed as incurred, often in the form of a fuel surcharge, they have a more immediate effect on the P&L. To boil all this down and based on the assumptions we are currently using, commodities and transportation are now expected to add about $50 million of incremental cost to 2026 versus our original budget. But that is likely to change. So from a sensitivity standpoint, we can offer you the following. All else being equal, every $5 move in the per barrel price of oil up or down equates to about $5 million of either incremental cost, which we would develop plans to offset or benefit, which we could choose to reinvest or drop to the bottom line. It is also worth noting that there is some good news because while commodity costs have risen meaningfully, we expect about half of this negative impact to be directly offset by lower tariff costs. Recall that during 2025, we incurred $115 million or $0.23 per share of new tariff-related P&L charges, $0.02 in the second quarter, $0.11 in the third and $0.10 in the fourth. At the start of 2026, we expected to incur $146 million or $0.30 per share of comparable tariff-related P&L charges. Those charges were forecasted to present themselves as follows: $0.065 in each of the first and second quarters, $0.09 in the third quarter and $0.08 in the fourth quarter. As we stand here today, with all the changes we are aware of and with the key assumption that when the current 10% Section 122 tariffs expire, they are replaced by some combination of new tariffs that on average carry a 15% effective rate, we now expect to incur $120 million or $0.24 per share of P&L tariff-related costs, which is $26 million or $0.06 per share better than originally expected. To help complete your models, our estimated 2026 P&L tariff impact is $0.10 in Q1, $0.07 in Q2, $0.05 in Q3 and $0.03 in Q4, all of which is off by $0.01 due to rounding. Finally, to wrap this section up, please note 3 things. First, I just stated that the Q1 2026 P&L impact from these tariffs was $0.10, and our original estimate was $0.065. Q1's tariff impact ended up higher than expected, but that was primarily a function of sales coming in stronger than planned for certain tariff-impacted categories. In other words, we sold more inventory than anticipated in these categories, which brought forward tariff costs that have been held in inventory at the end of last year. Second, with respect to the potential IEEPA tariff refund we are entitled to, we are accounting for this under a loss recovery model. Under that framework, a receivable can only be recorded when recovery is both probable and reasonably estimable. As of March 31, we did not record a receivable given remaining uncertainties, including the appeals process and implementation of the refund process itself. Thus, our current earnings and operating cash flow outlook does not include any impact from potential IEEPA tariff refunds, including refunds related to approximately $120 million of IEEPA tariffs paid in 2025. Third, while there is a gap between the incremental commodity hurt we expect to incur and the incremental tariff help we now anticipate, plans are in place to make up the balance through a combination of gross productivity, disciplined cost management actions and where necessary, select and targeted net pricing actions. Turning to our outlook and based on our first quarter overdelivery and projected sales growth over the balance of the year, we are raising our full year estimates for net sales, core sales and normalized earnings per share. Specifically, net sales are now expected to be between flat and positive 2% compared with our previous expectation of negative 1% to positive 1% and core sales are now expected to be between negative 1% and positive 1% compared with our prior expectation of negative 2% to flat. The outlook for normalized operating margin remains unchanged at 8.6% to 9.2%. We continue to expect an effective tax rate in the high teens and the bottom end of our normalized diluted earnings per share range has been increased by $0.02, bringing the range to $0.56 to $0.60 versus $0.54 to $0.60. From a cash standpoint, as previously disclosed, Newell Brands decided to terminate its U.S. nonqualified defined benefit plans. These were specialized nonqualified plans for certain participating former senior executives and are separate from our broad-based employee benefit programs. As part of the process, we are liquidating the associated life insurance assets. And as a result, Newell expects to generate an incremental $60 million of cash by the end of the year, which will be recognized as cash from investing activities. Given this additional cash infusion, we have been leaning in on inventory purchases to bring in more inventory at what we believe will ultimately be lower tariff rates and to ensure adequacy of supply as business trends improve. Consistent with this, while we are leveraging our operating cash -- we are leaving our operating cash flow range for the full year at $350 million to $400 million, we now expect to be towards the lower end of that range. CapEx is still being planned against a $200 million budget for 2026 versus a historical run rate of about $250 million, now that several large ERP integrations and supply chain projects have been successfully completed, and we continue to have plans to reduce our year-end leverage ratio by about half a turn. For the second quarter of 2026, we expect both net and core sales to be flat to up 2% behind consumer-relevant innovation, net distribution gains and higher levels of A&P support. Normalized operating margin is projected to be between 9.6% and 10.2% and normalized diluted earnings per share is projected to be in the range of $0.16 to $0.19. Please note that second quarter normalized operating margin and normalized earnings per share include approximately $25 million of incremental year-over-year tariff costs, considerably higher diesel costs and an expected year-over-year increase in advertising and promotional support, both in absolute dollars and as a percentage of sales. In closing, first quarter results were better than planned across all key metrics, with all 3 segments delivering core sales above our expectations. While we continue to face a dynamic cost and tariff environment, the capabilities we have built and the agility and dedication of the Newell team gives us the confidence to raise our full year outlook for net sales, core sales and normalized EPS while maintaining our operating margin outlook as we continue to prioritize cash generation and deleveraging as we seek to fully unlock the value of Newell's portfolio of leading brands for our shareholders. Operator, we'll now open the call to questions. Operator: [Operator Instructions] And our first question will come from Lauren Lieberman with Barclays. Lauren Lieberman: I just wanted to first talk about the decision of what you're seeing in terms of category growth and the more optimistic outlook. There's a question of whether or not tax refunds were maybe helping consumers a bit in the first quarter, and now we've got raised higher gas prices. So just, I guess, what you're seeing that gives you the confidence to raise that category growth outlook at this point in the year? Christopher Peterson: Yes. Thanks, Lauren. And what I would say is, as I mentioned in the prepared remarks, through year-to-date through the first quarter and actually what we've seen so far in April, the category growth that we've seen has been negative 1%. As you know, we planned the year going into it at minus 2%. We decided to move the plan for the year up to minus 1.5%. So it was like -- it was sort of 0.5 point. That doesn't really assume that the balance of the year moves off that minus 2% assumption. It's more about the experience through the first 4 months being at minus 1% there. So it was a factor in our decision to raise the core sales growth guidance. And I think you're right, from what we can tell, the tax refunds, much of which came into the market in March and April, do appear to be offsetting the consumer impact from gas and energy. I would say the bigger factor, though, that caused us to raise our core sales growth outlook was the underlying improvement in the business and additional distribution wins that we've received since we reported a couple of months ago. So we're continuing to win broader distribution gains. We're continuing to win more display presence. And that -- probably that real improvement, coupled with what we've seen year-to-date on category growth was the reason why we felt comfortable going forward with the raise in guidance. The other thing I would say on the core sales guidance range is we could have gone further in raising it, but we didn't want to get ahead of our skis given that the first quarter is generally our seasonally smallest quarter. So we think we've taken sort of a prudent approach of reflecting what we've seen, what we know from the consumer response to our innovation and distribution and wins and category growth year-to-date, but also not counting on the environment being significantly better for the balance of the year. Lauren Lieberman: Okay. So helpful. One just quick follow-up. Some of the new product activities that you had at the end of 2025, I'm thinking in particular around Yankee Candle, would you say that shelf sets and presence is now kind of on all those fronts as you expected? I think that was part of the disappointment in the second half of last year? Was it some of that just took longer to get into place? Would you say everything is now kind of as you'd originally expected just with a bit of a delay? Christopher Peterson: Yes. I think that's right. On Yankee Candle, I think we launched it last summer, and it took longer to get those shelves into a good place than what we thought. I think that has now resolved itself, and we feel like the shelf is in good shape on Home Fragrance. We had a very strong Q4 in the Home Fragrance business with core sales growth, which, as you know, is the biggest season there. We did -- we sold so much actually in Q4 that we didn't have as much to liquidate on sale in Q1 this year. So you'll see Q1 was sort of down a little bit in Home Fragrance, but that's largely because we weren't liquidating as much sale in product. The other thing I would say importantly, as we think about go forward, we've got -- as we mentioned on our last call and at CAGNY, a lot of the innovation that we're launching this year and a lot of the distribution wins that we expect this year are setting in the second quarter. And so we remain very much on track for those. And that also is giving us confidence to predict or to guide that the current quarter, Q2 is going to be the quarter that Newell returns to core sales growth. Operator: And the next question is going to come from Andrea Teixeira with JPMorgan. Andrea Teixeira: So I was just hoping to see if you can comment on the pricing strategy now that resins are higher. I understand that you had to invest some of, I believe, in the Rubbermaid containers, given that your competitors did not follow. And I was just hoping to see in your new range, what are you assuming for that? And then I understand, Chris, as you said now, the first quarter is a small quarter. But as you set up for back-to-school and now the back-to-school, I mean, now that the Writing business is back to growth and you're calling to a second quarter inflection. What are the drivers of that inflection? Is that still the momentum in Baby? Or is that any other -- like as you think about the categories, which categories are recovering and will drive that inflection, please? Christopher Peterson: Very good. So on pricing, we have not announced -- as we said on the last call, we did make pricing adjustments on the Rubbermaid Food Storage business and on the Baby business, the Baby business primarily because the tariff rate went down, Rubbermaid Food Storage to be more competitive about 5 or 6 months ago. And those have been in the market and those are performing well. Both of those businesses are accelerating. In fact, over the last 6 months, we're up several hundred basis points in market share on Baby, on the Graco business. We are -- we have had the strongest market share gains driven by innovation with things like the Graco 360 EasyTurn 2-in-1 rotating car seat as well as the SmartSense Swing and Bassinet that continue to drive that business forward in a very positive manner. As we look forward on pricing, I think as we tried to allude in the prepared remarks, while we have $50 million or so of incremental commodity cost headwind from resins and transportation costs primarily, we think that about half of that is going to be offset from tariff benefit. We also think that we're going to drive additional productivity actions across our supply chain and across our overhead base that are going to help mitigate that commodity cost effort as well. And then there is a remaining piece. And so we're in the process of looking at that across the portfolio to see which parts of the portfolio might we take pricing adjustments. What I would characterize going forward is it's likely that we will take some pricing actions. It could be through reducing our invoice to net spend in our promotional depth. It could be through list price increases. But I believe it will be very selective in the portfolio as opposed to broadscale pricing at this point because we just don't think we need that. On your second question on the inflection, I would say a couple of things on that. The first thing I would say is one of the things that I'm excited about is in the first quarter, our POS trends were actually stronger than our core sales growth. So when we look at the consumer offtake trend, the consumer offtake trend was a couple of points better than the core sales growth in Q1. And as I mentioned in the prepared remarks, we had 6 of our top 10 brands that drove market share growth in the quarter. So that bodes well for replenishment orders heading into the second quarter is the first thing. Second thing I would say is we've got a lot of our innovation that is in early stages of being launched, and we've seen very strong response to it. The Coleman Snap 'N Go cooler, we've raised our forecast on that innovation 5 times in the last 3 months in terms of the projection for that product. We continue to keep raising our projection on some of the Graco car seats, on Sharpie behind some of the new colors and tip sizes and other innovations. We also continue to secure additional distribution wins. And so when I look at the inflection in the second quarter, the businesses that I would expect to be the biggest contributors to that inflection are likely to be the Writing business, the Baby business, the Outdoor & Recreation business as well as the Kitchen business. And I think all 4 of those businesses are positioned with the innovation, distribution gains that we have to drive meaningful progress. Final point I would make is that the international business, which for largely shipment timing reasons, got off to a slower start in Q1. We do expect that business to be a stronger contributor in Q2 than it was in Q1. So those are kind of the things that give us confidence to guide that Q2 is going to be the inflection point. Mark Erceg: The other thing I think it's important is you might recall about a year ago at this time, we had basically believed that we were going to positively inflect at some point during the back half of last year as well. Then the tariff regime came in, and we were forced to take pricing on April 1, on May 1 and on July 28 because we had to move quickly in order to remediate the $115 million of P&L impacts coming in from those tariffs. Those prices obviously are now effectively in the base, and many of those haven't even fully annualized yet. So to Chris' point, this additional $50 million of commodity increases that we have to contend with, we think a very small sliver of that might have to be addressed by very targeted pricing actions. So we don't see, based on where commodities sit today and where tariffs sit today, us needing to make any major interventions that would then disrupt the positive share and POS trends that Chris just cited. Operator: And the next question will come from Olivia Tong with Raymond James. Olivia Tong Cheang: Great. One short-term question, and then I have a follow-up. But your Q2 EPS guide obviously implies a fair bit of cost inflation and margin challenges given the commodity and cost environment. Is that the only reason for the margin change? Or is there -- given the strength and confidence in your top line expectations, did you assume any additional spending in there? Or is that just the flow-through of cost inflation? And then I have a follow-up. Mark Erceg: Yes, it's a great question. So there's really 3 things I think I would speak to. One, we already addressed in part, which is to say that last year in Q2, we had $0.02 of tariff P&L impact. This year, we're predicting it to be $0.07. So that's a full $0.05. The other thing, obviously, is this commodity increase of $50 million. That $50 million, which, as we talked earlier, was probably about $30 million of resin and $20 million of diesel presents itself over the course of the balance of the year. These are very rough numbers, but about $10 million of that is probably going to impact us in Q2, $25 million in Q3 and $15 million in Q4 just roughly is one way to think about it. And then the other thing, of course, is we continue to invest behind A&P, and we expect A&P in Q2 to be up a fair bit. So we're continuing to invest behind the business because we've been rebooting the business over the last many years. We feel like we're really getting traction now across the innovation side of the house, across the retail execution side of the house, the distribution gains that Chris has cited, we think the POS trends are reflecting that. So that's -- those are primarily the 3 reasons why you see that on the EPS side as it relates to Q2. Christopher Peterson: Yes. The biggest driver, as Mark said, is the tariff thing because tariffs go from effectively a year-over-year headwind of $0.05 a share in Q2 to in the back half, a material improvement in Q3 and Q4 because of the timing of when tariffs were implemented and all the changes that have been made. So if you were to strip out just that tariff impact, I think you'd see a much stronger performance on the operating margin side and on the bottom line compared to the prior year. Mark Erceg: Yes, it's a $0.13 differential in the back half just on the tariff piece alone. Olivia Tong Cheang: Got it. That's helpful. And then we've talked a lot in the past about your domestic manufacturing. And just wanted to ask you a little bit more about your ability to flex that to the extent that competition gets into sourcing challenges or what have you, greater exposure to nondomestic manufacturing, et cetera. Can you talk about the changes that you've made over the last few years in standing up those -- your domestic facilities so that should there be more demand or constraints amongst competition that you can step up if that's the case? Christopher Peterson: Yes. It's a good question, and it's one that we've been working on. We've spent the last really 6 or 7 years automating a lot of our U.S. manufacturing footprint. So as I mentioned, we have 15 manufacturing plants in the U.S. and 2 that are USMCA compliant in Mexico. And all of those facilities, we've been embarking on automation. And when we've done the automation, and I think we gave an example in the Writing plant in Tennessee, where we've moved the line speed from 150 units a minute to 500, and we've gone from 6 or 7 workers that were hired on the line down to 1. But as we've done that automation, we did it sort of on a return on investment model that assumed a constant volume. But what it effectively did was gave us excess capacity in the U.S. factories. So today, in most of our U.S. manufacturing plants, we have the ability to scale up relatively quickly to compensate for supply disruption. And we do think -- we haven't baked that into our guidance, but we do think that there is a real possibility of supply disruption, particularly for those companies that are overly dependent on Asian sourcing because of supply constraints in some key materials that may manifest themselves there. And so we can react relatively quickly. I would say if we had an order that was a material upside order because a competitor ran into trouble. And we've seen a couple of those so far in select categories. We can probably ramp up within 3 months or so, generally speaking, across our U.S. manufacturing footprint. And so I do feel like that's a big opportunity for us as those present themselves. Operator: Thank you. This concludes today's conference call. Thank you for your participation. A replay of today's call will be available later today on the company's website at ir.newellbrands.com. You may now disconnect, and have a great day. Before you buy stock in Newell Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Newell Brands wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $463,900!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,294,401!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 1, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Newell (NWL) Q1 2026 Earnings Transcript was originally published by The Motley Fool