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Newell Brands Reaffirms Its Fiscal 2016 Projections

Gabriel Kane - Author
By

Nov. 20 2020, Updated 1:40 p.m. ET

Price movement

Newell Brands (NWL) has a market cap of $25.9 billion. It rose by 0.88% to close at $54.04 per share on September 6, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.24%, 0.90%, and 24.1%, respectively, on the same day. NWL is trading 0.35% above its 20-day moving average, 5.8% above its 50-day moving average, and 20.3% 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 8.4% on September 6.

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

  • Fortune Brands Home & Security (FBHS) — $9.7 billion
  • Avery Dennison (AVY) — $7.0 billion
  • Tupperware Brand (TUP) — $3.3 billion

Performance of Newell Brands in 2Q16

Newell Brands reported 2Q16 net sales of $3.9 billion, 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, compared with $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.

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NWL reported cash and cash equivalents and inventories of $627.3 million and $2.9 billion, respectively, in 2Q16, compared with $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, compared with 1.1x and 1.2x, respectively, in 2Q15.

Projections

The company reaffirmed the following projections for fiscal 2016 at the Barclays Global Consumer Staples Conference:

  • 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%

For an ongoing analysis of this sector, visit Market Realist’s Consumer Discretionary page.

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