ATLANTA - Newell Brands (NASDAQ:NWL) shares surged 6.63% as the company reported first quarter 2024 results that exceeded analyst expectations.
The company, known for its consumer and commercial products, posted an adjusted earnings per share (EPS) of $0.00, which was $0.07 higher than the consensus estimate of -$0.07. Revenue for the quarter was also above expectations, coming in at $1.65 billion against the consensus estimate of $1.64 billion.
The positive market response follows Newell's announcement of improved sequential sales and significant expansion in gross and operating margins compared to the previous year. The company's operating cash flow also saw a substantial increase from the prior year. Despite a net sales decline of 8.4% compared to the same period last year, the company's strategic initiatives appear to be paying off, with Newell affirming its outlook for the full year 2024.
Chris Peterson, President and CEO, attributed the strong quarter to the company's new strategy, which has led to improved operational and financial priorities. "During the first quarter, core sales performance improved sequentially, normalized operating margin nearly doubled versus last year, and we meaningfully increased operating cash flow," said Peterson. The company's focus on innovation, brand building, and go-to-market excellence in its most profitable brands and markets is expected to continue driving performance.
The company's reported gross margin for the quarter increased to 30.5%, up from 26.7% in the prior year, while normalized gross margin rose to 31.2% from 27.1%. The reported operating margin also improved to 1.0% compared to a negative 2.0% in the prior year period, with normalized operating margin increasing to 4.6% from 2.4%.
Looking ahead, Newell Brands has initiated its outlook for the second quarter of 2024 and reaffirmed its full-year outlook. For the second quarter, the company expects a net sales decline between 9% and 7%, with a core sales decline between 6% and 4%. The normalized operating margin is projected to be between 9.1% and 9.6%, and adjusted EPS is forecasted to be between $0.18 and $0.21.
For the full year, the company anticipates a net sales decline between 8% and 5%, with a core sales decline between 6% and 3%. The normalized operating margin is expected to be between 7.8% and 8.2%, and adjusted EPS between $0.52 and $0.62. The company also expects full-year operating cash flow to be between $400 million and $500 million.
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