Newell Brands Inc. (NASDAQ: NWL) saw its stock price climb approximately 9% to $4.445 on Friday afternoon, with trading volume reaching nearly 9.4 million shares. The rally followed the company's upward revision of its 2026 sales and adjusted earnings forecasts, even as first-quarter underlying sales showed a decline.
The Atlanta-based consumer goods giant, known for brands such as Sharpie and Rubbermaid, reported net sales of $1.549 billion for the quarter ended March 31, a 1.1% decrease from the prior year. However, gross margin improved to 33.1% from 32.1%, and operating margin edged up to 2.2% from 1.3%. These gains were attributed to pricing actions and productivity improvements, partially offset by weaker volume, inflation, and tariff costs.
Chief Executive Officer Chris Peterson described the quarter as 'ahead of plan' and expressed confidence in a return to top-line growth in the second quarter. Chief Financial Officer Mark Erceg noted that the company felt 'comfortable raising' its full-year guidance following the first-quarter performance.
Newell now projects 2026 net sales to be flat or increase by up to 2%, compared with its earlier forecast of a 1% decline to a 1% increase. Core sales, which exclude the effects of acquisitions, divestitures, store openings and closings, market exits, and currency fluctuations, are now expected to range from a 1% drop to a 1% rise, improved from the prior outlook of a 2% decline to flat. The normalized earnings per share target was also raised to a range of 56 to 60 cents, from 54 to 60 cents.
For the second quarter, Newell anticipates net sales and core sales to be flat or up to 2% higher, with normalized EPS between 16 cents and 19 cents. The company maintained its full-year operating cash flow guidance of $350 million to $400 million.
Segment performance showed mixed results. The Learning & Development segment, which includes writing and baby products, posted a 2.0% increase in core sales. In contrast, Home & Commercial Solutions saw a 6.9% decline, and Outdoor & Recreation fell 5.7%.
The broader consumer goods landscape remains challenging. Colgate-Palmolive recently flagged an additional $300 million in raw material and logistics costs, Clorox trimmed its annual profit outlook, and Procter & Gamble projected a $1 billion after-tax impact on fiscal 2027 profit from higher oil prices. Newell itself faces headwinds including soft consumer demand, tight retailer inventory management, rising transportation and raw material costs, tariffs, and debt refinancing risks.
Operating cash outflow widened to $233 million from $213 million a year earlier, driven largely by an increase in inventories. At quarter-end, debt stood at $5.0 billion, while cash reserves were $201 million. Tariffs remain a significant variable; Newell has not factored in any refund on the $120 million it paid in 2025 under IEEPA tariffs, which could provide a potential upside if recovered.