Newell Brands Stock Plummeted 29% Today: Revised Sales Forecast And CEO’s Comment On Tariff Costs Draw Investor Attention

The company forecast annual normalised earnings per share to come between $0.56 and $0.60, compared with the previous expectation of $0.66 to $0.70.

• CEO Chris Peterson said that both core and net sales declined 7% in the third quarter, adding that this was “below our expectations.”
• Newell now expects annual net sales to decline 4.5% to 5%, compared with the prior forecast of 2% to 3% drop.
• The company forecast annual normalised earnings per share to come between $0.56 and $0.60, compared with the previous expectation of $0.66 to $0.70.

Newell Brands (NWL) CEO Chris Peterson stated on Friday that the company now expects to incur $180 million in incremental cash tariff costs this year, up from its previous estimate of $155 million, made just two months ago.

“These trade disruptions have affected short-term consumer and retailer behavior,” Peterson said during a post-earnings call.

“We sold incremental distribution and promotions in tariff-advantaged categories, and we took pricing actions where necessary to offset the tariff costs. While our team executed our plan well, it was not sufficient to offset the macro headwinds in the third quarter,” he added.

Shares of the company tumbled nearly 29% in afternoon trading following the earnings report. 

Retail sentiment on Newell Brands remained unchanged in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

Macroeconomic Factors

Peterson said that both core and net sales declined 7% in the third quarter. He added that this was “below our expectations.”

This was in “due in large part to three discrete macroeconomic-related factors, namely lower retailer inventory levels, a slowdown in a couple of key international markets like Brazil, and lower consumer demand as we priced for tariffs more aggressively than competition in several categories,” Peterson said.

The company noted that these three factors reduced third-quarter sales by four to five points, which, along with two to three points of category compression, more than offset incremental tariff-advantaged business wins and a strong innovation program. 

Newell’s Q3 Results

The company’s quarterly net sales totaled $1.81 billion, compared with Wall Street expectations of $1.89 billion, according to data from Fiscal AI. Its adjusted earnings per share were $0.17 compared with estimates of $0.18.

Newell now expects annual net sales to decline 4.5% to 5%, compared with the prior forecast of 2% to 3% drop. It has forecast annual normalized earnings per share to come between $0.56 and $0.60, compared with the previous expectation of $0.66 to $0.70.

Shares of Newell Brands have declined by over 61% in the last 12 months.

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