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Newell Brands Makes Changes in Its Management

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Price movement

Newell Brands (NWL) fell by 0.20% to close at $53.57 per share during the fifth week of August 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.20%, 0.90%, and 23.1%, respectively, on the same day.

NWL is now trading 0.53% below its 20-day moving average, 5.1% above its 50-day moving average, and 19.4% above its 200-day moving average.

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Related ETF and peers

The Vanguard Large-Cap ETF (VV) invests 0.12% of its holdings in Newell Brands. The ETF tracks a market-cap-weighted index that covers 85% of the market capitalization of the US equity market. The YTD price movement of VV was 8.1% on September 2.

The market caps of Newell Brands’ competitors are as follows:

  • Fortune Brands Home & Security (FBHS): $9.8 billion
  • Avery Dennison (AVY): $7.0 billion
  • Tupperware Brand (TUP): $3.3 billion

Latest news on Newell Brands

Tom Sanford has been appointed Vice President of Communications. Sanford will be responsible for enterprise-level internal and external communications worldwide, a division that includes employee, community, and media relations.

In a press release on August 30, 2016, Newell Brands reported that “Chief Executive Officer Michael Polk will present at the Barclays Global Consumer Staples Conference. The presentation will begin at 1:30 p.m. ET on Tuesday, September 6, 2016.”

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Performance of Newell Brands in 2Q16

Newell Brands reported 2Q16 net sales of $3.9 billion, which represents a rise of 143.8% over its net sales of $1.6 billion in 2Q15. Sales from its Writing and Baby and Parenting segments rose by 15.8% and 12.4%, respectively. Sales from its Home Solutions, Tools, and Commercial Products segments fell by 1.1%, 3.8%, and 7.9%, respectively, between 2Q15 and 2Q16.

NWL reported a loss related to the extinguishment of its debt-credit facility of $1.2 million in 2Q16. The company’s gross profit margin and operating income fell by 28.6% and 35.9%, respectively, between 2Q15 and 2Q16.

Its net income and EPS (earnings per share) fell to $135.2 million and $0.30, respectively, in 2Q16, as compared to $148.5 million and $0.55, respectively, in 2Q15. It reported non-GAAP (generally accepted accounting principles) normalized EPS of $0.78 in 2Q16—a rise of 21.9% over 2Q15.

NWL reported cash and cash equivalents and inventories of $627.3 million and $2.9 billion, respectively, in 2Q16, as compared to $238.7 million and $935.6 million, respectively, in 2Q15. Its current ratio rose to 1.6x, and its long-term debt-to-equity ratio fell to 1.1x in 2Q16, as compared to 1.1x and 1.2x, respectively, in 2Q15.

Projections

The company recently reported that “core sales exclude the impact of foreign currency, all acquisitions (other than the Jarden acquisition) until their first anniversary and all planned and completed divestitures (which includes the deconsolidation of Venezuela). Core sales include the negative impact of planned product line exits.”

The company has reaffirmed the following projections for 2016:

  • core sales growth in the range of 3.0%–4.0%
  • normalized EPS in the range of $2.75–$2.90
  • an effective tax rate in the range of 29%–30%

Next, we’ll discuss PepsiCo (PEP).

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