Yahoo Finance Newell Brands Inc (NWL) Q1 2024 Earnings Call Transcript Highlights: Strategic Shifts Yielding ...
Core Sales: Declined 4.7%, an improvement from a 9.3% decline in the previous quarter.
Normalized Gross Margin: Increased by 410 basis points year-over-year to 31.2%.
Normalized Operating Margin: Expanded by 220 basis points year-over-year to 4.6%.
Normalized EBITDA: Grew over 30%.
Operating Cash Flow: Improved significantly, generating $32 million compared to a use of $77 million in the same quarter last year.
Net Sales: Contracted 8% year-over-year to $1.7 billion.
Leverage Ratio: Reduced to 5.4x from 6.3x.
Advertising and Promotion Spend: Increased both in absolute terms and as a percentage of sales.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you provide an update on the Outdoor & Recreation division, particularly regarding portfolio work and its impact on core sales? A: Christopher H. Peterson - President, CEO & Director: The Outdoor & Recreation business is the portfolio's laggard but is undergoing significant changes, including a shift in focus for the Coleman business to broader outdoor activities and for the beverage business to hydration. The leadership team has been entirely revamped, and new innovations are expected in 2025. Despite current challenges, the long-term consumer trend towards outdoor activities is favorable.
Q: Given the past pattern of guidance reductions, what makes you more confident in the current year's outlook? A: Christopher H. Peterson - President, CEO & Director: The new strategy unveiled last year marks a significant shift, leading to improvements in gross margin, operating margin, and cash flow, with core sales also showing improvement. The external environment aligns with our expectations, supporting our maintained outlook for the year.
Q: Can you discuss the performance and outlook for the three businesses that have returned to growth? A: Christopher H. Peterson - President, CEO & Director: The Writing, Baby, and Commercial businesses are showing positive trends. The Writing business is expected to gain market share driven by strong innovation and marketing, particularly with new products like Sharpie Creative Markers and Paper Mate InkJoy Gel Bright! pens. The Baby business is also positioned for growth with a strong innovation funnel and new distribution channels.
Q: How do you view the current cost environment, especially with potential reinflation in commodities? A: Mark J. Erceg - CFO: The company anticipates low single-digit inflation across the year, balanced by significant cost takeout efforts from the supply chain organization, which has doubled the rate of cost takeout compared to previous years.
Q: What is your strategy regarding pricing, particularly in the U.S., given the current economic environment? A: Christopher H. Peterson - President, CEO & Director: There are no major new pricing actions planned in the U.S. this year, as the company aims to offset low single-digit inflation with productivity gains. Pricing actions are more focused on international markets to counteract foreign exchange headwinds.
Q: Looking back on the past year since the new strategy was implemented, how do you assess the progress made? A: Christopher H. Peterson - President, CEO & Director: The foundational changes, including a new strategy, operating model, and organization structure, have been established. Early results from these strategic choices are promising, and there is optimism for continued improvement and success in the coming years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
