Newell Brands Shares Fall

Newell Brands

The share price for Newell Brands has fallen by almost 20%. This follows the announcement that the company is halving its global factory footprint by 2019.

By speeding up the company’ transformation strategy, Newell Brands hopes to increase its margins and growth potential. This will include a 50% reduction in its international factories and warehouses and consolidation of 80% global sales into two platforms by the end of 2019.

In 2016, Newell Brands acquired Jarden Corp, adding household brands such as Yankee Candle and Mr Coffee machines to its portfolio which includes Sharpie Pens and Rubbermaid.

Annual revenue, which stood at $14 billion in 2016 is predicted to be around $11 billion following this restructure. Three of Newell’s twelve board members have resigned, including Jarden CEO Martin Franklin.

Speaking of the restructure, Newell Brands CEO, Michael Polk says:

 “We are committed to achieving our transformation objectives and are taking decisive action with speed to adapt our agenda to the unprecedented volatility in our retailer landscape.”

He added: “We believe that exiting non-strategic assets, reducing complexity and focusing on our key consumer-focused brands will make us more effective at unlocking value and responding to the fast-changing retail environment.”

Q3 2017 Disappointing Results

Back in November 2017, Newell Brands reported disappointing Q3 results. At the time, Polk commented:

“Newell Brands third quarter results were below expectations as our transformation progress was overshadowed by weak late-quarter sales related to retailer inventory rebalancing, primarily in response to decelerating U.S. market growth through the Back-to-School period. While markets across a number of categories were weaker than expected, we delivered solid point-of-sale growth of +3.5 percent and share improvement of +65 basis points in the U.S., driven by good results in the mass channel and strong double-digit growth in e-commerce.”

“We continued to realize cost synergies as planned, with an incremental $86 million in the quarter. While those benefits, coupled with a lower than normal tax rate, were partially offset by weaker than expected sales, cost inflation and the absence of about $50 million of pre-tax earnings associated with divestitures, we still delivered double-digit earnings per share growth for the quarter.”

Preliminary results for 2017 are expected to see sales growth down by 1.5-2% to 0.8%.

Related Articles You May Also Like

Handwriting Adds a Personal Note to Business

Bong Envelopes Buys InterMail

EOPA 2018 Awards Shortlist

Michelle Roper-Shaw