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$NWL 1Q15 10-Q: Current senior debt credit ratings: Moody’s Investors Service was Baa3, S&P was BBB- and Fitch Ratings were BBB . Moody’s Investors Service and Fitch Ratings forecasted outlook to be stable while S&P forecasted outlook to be positive.
$NWL said it is reinstating its Stock Repurchase Program that it voluntarily suspended in 4Q15, related to Jarden transaction. Under current authorization, which is effective through end of 2017, about $256MM of original $500MM is available for repurchase. $NWL is on track to achieve its leverage ratio target of 3.0 to 3.5 times in 2018.
$NWL, a consumer goods company, entered into a definitive agreement to acquire Chesapeake Bay Candle for $75MM. Based in Rockville, Chesapeake Bay Candle has an annual net sales of approx. $55MM. The acquisition will be reported as part of Newell Brands’ Live segment and funded from cash on hand at the time of closing, probably in 4Q17.
$NWL updated its 2017 normalized EPS guidance for expected effects of Hurricane Harvey on its U.S. manufactured resin businesses, including increasing inflationary pressure through 3Q. $NWL cut normalized EPS forecast to $2.95-3.05 from $3.00-3.20. $NWL still sees sales of $14.8-15.0Bil, sales growth of 11.5-13%, and core sales growth of 2.5-4%.
$NWL said e-commerce, which represents about 10% of its global sales, grew double-digits in 1H17. The company said it anticipates double-digit growth in the online platform in 3Q17 and 4Q17 as well. As part of its investments into the online business, $NWL expects to have 500 dedicated e-commerce employees by the end of 2017.
$NWL's total sales growth in 2Q17 was primarily driven by a 13.8% increase in Live segment sales to $1.3Bil. Meanwhile, Learn segment sales grew 10.9%; Work segment sales grew 14.1%; and Play segment sales increased 14.2%. This was slightly offset by Other segment, which declined 50%.
$NWL raised its FY17 net sales guidance to $14.8-15Bil, from the previous range of $14.52-14.72Bil, to reflect the timing of divestitures and the impact of foreign currency. Meanwhile, it reaffirmed its FY17 guidance for core sales growth of 2.5-4% and normalized diluted EPS of $3.00-3.20.
Consumer goods company $NWL reported 5.1% growth in net sales in 2Q17 to $4.1Bil, helped by the inclusion of the Jarden business for the full quarter. Net income grew to $223MM, or $0.46 per share, compared to $135.2MM, or $0.30 per share a year ago, benefiting from core sales growth and cost synergies. Meanwhile, normalized EPS grew to $0.87.
$NWL has agreed to sell its Winter Sports businesses to Kohlberg & Company, L.L.C. Gross proceeds from the divestiture are expected to be $240MM. The transaction is expected to close late in 2Q17 or early in 3Q17. $NWL has also signed a definitive agreement to sell its Zoot & Squadra apparel brands in a separate transaction.
$NWL expects headwinds in 2Q17 connected to retailer transitions. In 1Q17, $NWL was able to overcome this headwind through diversity of portfolio and channels, share gains in modest-growing categories and momentum in e-commerce. Market share growth in 1Q17 was driven by strong new products and good sales execution.
$NWL expects to see operating margin improvement in all its business segments going forward. The Other segment is likely to see some challenges due to commodity dynamics but the Live, Learn, Work and Play segments will see benefits from synergies. Some of the segments will see good margin progression based on sourcing and procurement benefits.
For FY 17, $NWL now sees net sales grow 9.5-11% to $14.52-14.72Bil, with core sales rising 2.5-4.0%, generating a normalized earnings of $3.00 to $3.20 per share. The new guidance is due to the timing of acquisitions and divestitures, and forex. Newell still sees the FY tax rate of about 23%.
In 1Q17, $NWL's Live segment generated net sales of $1.1Bil, up 231.5%. The Learn segment net sales soared 47.9% to $569MM, while Work segment net sales jumped 128.5% to $614MM. Net sales of the Play segment expanded ten-fold to $614MM from $61MM a year ago. Other segment generated net sales of $388MM, up 39.4%.
Net sales of $NWL soared 148% to $3.3Bil in 1Q17, as the Rubbermaid maker's net income expanded almost sixteen-fold to $638.5MM from last year's $40.5MM. Earnings jumped to $1.31 per diluted share from $0.15 a share, lifted by increased operating profits and a $784MM gain on the sale of the Tools business.
$NWL agreed to sell its Pine Mountain fire starters and fire logs business as well as its Diamond matches, fire starters, lighters, toothpicks, clothespins and clotheslines business to Royal Oak Enterprises. $NWL will retain Diamond branded plastic cutlery products. The transaction is expected to close in 2Q17.