Newell Brands Reports Decline in Net Sales, Improvements in Gross Profit and Operating Income in Q3 2024

Newell Brands Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, revealing a decline in net sales but improvements in gross profit and operating income compared to the previous year. For the third quarter, net sales totaled $1,947 million, down 5% from $2,048 million in Q3 2023. Year-to-date, net sales were $5,633 million, a decrease of 7% from $6,057 million in the same period last year. The decline in revenue was attributed to soft global demand, distribution losses, and product line exits, particularly in the Home and Commercial Solutions (H&CS) segment.

Despite the drop in sales, gross profit for Q3 2024 increased to $679 million, up 9% from $621 million in Q3 2023, resulting in a gross margin improvement to 34.9% from 30.3%. The operating loss for the quarter was $(121) million, an improvement from $(159) million in the prior year. For the nine-month period, the company reported operating income of $58 million, a significant turnaround from an operating loss of $(75) million in the same period of 2023.

Newell Brands recorded a net loss of $(198) million for Q3 2024, a reduction from $(218) million in Q3 2023. The nine-month net loss was $(162) million, down from $(302) million in the prior year. The basic loss per share improved to $(0.48) for Q3 2024 from $(0.53) in Q3 2023.

The company faced challenges from macroeconomic factors, including inflationary pressures and elevated interest rates, which are expected to continue impacting operating results. In response, Newell Brands has initiated several strategic restructuring plans, including Project Phoenix and a new organizational realignment plan aimed at enhancing commercial capabilities and reducing costs. The restructuring efforts are projected to incur charges between $75 million to $90 million, with $32 million recorded in the first nine months of 2024.

Additionally, Newell Brands recorded a non-cash impairment charge of $260 million in Q3 2024 for indefinite-lived tradenames in the H&CS and Learning and Development segments, driven by downward revisions of forecasted cash flows. The company also reported a decrease in total assets to $11,773 million as of September 30, 2024, down from $12,163 million at the end of 2023, while total current liabilities increased to $3,402 million from $2,897 million.

Cash and cash equivalents rose to $494 million as of September 30, 2024, compared to $332 million at the end of 2023. However, net cash provided by operating activities decreased significantly to $346 million for the nine months ended September 30, 2024, down from $679 million in the same period of 2023. The company continues to navigate a challenging market environment while implementing strategic initiatives to enhance operational efficiency and profitability.