Analysis NWL
Newell sales recover, but inflation keeps profit outlook in check
The maker of Sharpie and Rubbermaid raised its sales forecast. Higher inflation keeps the midpoint of its adjusted earnings outlook unchanged, while a brand write-down drove a reported loss.
Newell Brands, the maker of Sharpie pens, Rubbermaid products and other household goods, raised its annual sales forecast after revenue grew for a second consecutive quarter. Higher costs, however, are limiting how much of that improvement reaches its earnings outlook.
Third-quarter 2026 sales rose 3.7% from a year earlier to $1.87 billion. The company's core sales measure increased 3.3%. That measure removes currency movements and specified business changes, including acquisitions, divestitures and certain market exits, to make sales more comparable.
Newell now expects full-year sales growth of 2% to 3%, compared with its previous forecast of 1% to 2%. Yet the midpoint of its forecast for adjusted earnings per share stays at 75 cents. The new range is 74 to 76 cents, narrowed from 73 to 77 cents.
The recovery is helping, but costs are rising too
Chief Financial Officer Mark Erceg said inflation exceeded the company's expectations. Higher projected sales and additional cost controls give Newell confidence it can maintain the midpoint of its adjusted earnings outlook, rather than raise it.
There was an improvement in the underlying quarterly result. Operating profit on Newell's adjusted measure, which it calls normalized, rose to $184 million from $162 million. Its adjusted operating margin increased to 9.8% from 8.9%, meaning it kept more operating profit from each dollar of sales on that measure.
These adjusted figures exclude items such as restructuring costs and the brand write-down. They help explain Newell's view of its ongoing business, but they do not replace the reported result under standard U.S. accounting rules.
A brand write-down changes the reported picture
Newell reported a net loss of $81 million, compared with a profit of $21 million a year earlier. Reported operating profit fell to $27 million from $119 million.
A major reason was a $101 million impairment charge on a brand name. This is an accounting reduction in the recorded value of that asset, rather than a cash payment made in the quarter. Excluding that charge and other adjustments, Newell reported net income of $86 million, up from $70 million.
The write-down helps explain why reported earnings weakened even as the company's adjusted earnings improved.
The improvement was uneven across product groups. Core sales rose 6% in Home & Commercial Solutions and 2.3% in Learning & Development, while Outdoor & Recreation declined 6.4%.