Newell Brands — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the third quarter were $1.9 billion, an increase of 3.7% year-over-year, driven by core sales growth of 3.3% and favorable foreign exchange.
• Gross margin increased to 34.7% from 34.1% in the prior year period; normalized gross margin rose to 35.2% from 34.5%.
• Operating margin decreased to 1.4% from 6.6% due to a $101 million non-cash impairment charge related to an indefinite-lived tradename; normalized operating margin increased to 9.8% from 8.9%.
• Reported net loss was $81 million compared to net income of $21 million in the prior year; normalized net income was $86 million compared to $70 million.
• Diluted loss per share was $0.19 compared to $0.05 in the prior year; normalized diluted EPS was $0.20 compared to $0.17.
• Normalized EBITDA increased to $248 million from $225 million.
• Year-to-date operating cash flow was $93 million compared to $103 million in the prior year.
• Debt outstanding was $4.8 billion at the end of the third quarter, with cash and cash equivalents of $249 million.

Guidance and Future Outlook:

• Raised full-year 2026 net sales outlook to 2% to 3% (previously 1% to 2%) and core sales outlook to 1% to 2% (previously flat to 1%).
• Maintained full-year normalized operating margin outlook at 10.0% to 10.4% and normalized EPS outlook at $0.74 to $0.76.
• Revised full-year operating cash flow outlook to approximately $150 million, primarily due to the accounting treatment of the termination of non-qualified defined benefit plans and lower receivables factoring proceeds.
• Initiated fourth quarter 2026 outlook for net sales and core sales at 1% to 3% growth.
• Management expects to deliver positive sales growth in both the fourth quarter and full year 2026.

Business Segments and Product Lines:

• Home & Commercial Solutions: Net sales of $1.01 billion, up 3.7% with core sales growth of 6.0%; operating loss was $37 million (normalized operating income was $86 million).
• Learning & Development: Net sales of $692 million, up 1.6% with core sales growth of 2.3%; operating income was $137 million (normalized operating income was $157 million).
• Outdoor & Recreation: Net sales of $169 million, down 7.7% with core sales decline of 6.4%; operating loss was $14 million (normalized operating loss was $10 million).

Market and Competitive Landscape:

• Growth was broad-based, with both U.S. and International markets delivering growth, along with four of six businesses and seven of the top 10 brands.
• Inflation exceeded expectations but was offset by higher net sales and gross productivity.
• The company faces headwinds from soft global demand, retailers' inventory rebalancing, and elevated interest rates.

Risks and Challenges:

• Substantial indebtedness and current leverage profile, including risks related to refinancing upcoming bond maturities and potential credit rating changes.
• Macroeconomic impacts including tariffs, geopolitical conflicts, and currency fluctuations.
• Dependence on retail and consumer demand strength in various global markets.
• Potential for additional impairment charges if asset values decline.
• Supply chain disruptions and operational challenges related to geopolitical conditions.

Management Commentary and Tone:

• CEO Chris Peterson stated that top-line growth accelerated sequentially, marking the second consecutive quarter of year-over-year sales growth, driven by investments in consumer understanding, brand building, innovation, and marketing.
• CFO Mark Erceg highlighted that stronger sales and world-class productivity efforts allowed normalized margins to expand significantly despite inflation, maintaining confidence in the midpoints of the normalized operating margin and EPS outlooks.
• Management emphasized that deleveraging remains a top priority, with an anticipation to reduce total debt and factoring by a couple hundred million dollars in 2026.

Other Key Points:

• Entered into a new $800 million asset-based revolving credit facility, extending the maturity to 2031.
• Issued $600 million of 6.250% senior notes due 2031, using proceeds to redeem 6.375% senior notes due 2027 and repay a portion of the new facility.
• Announced the termination of non-qualified defined benefit plans, expected to generate a net cash benefit of approximately $60 million, though classified as operating cash outflows and investing cash inflows.
• The third quarter included a $101 million non-cash impairment charge related to an indefinite-lived tradename within the Home & Commercial Solutions segment.